Ecomm ad-spends to drop in 2016?
Facing wary investors and a fickle market, will we see e-commerce players tighten the purse strings this year?

With the big three of Indian e-commerce companies, Amazon, Flipkart and Snapdeal, struggling with losses and valuation struggles (at least for Flipkart and Jabong), agency heads and analysts expect them to tighten the purse strings in 2016. This, of course, does not mean that they will not be spending ad money, but, in the words of one industry observer, we are not likely to see the same astronomic spends anymore.
A large part of revenues and investments received by the majority of the e-commerce players in India are spent on customer acquisition, which is achieved via discounts as well as massive marketing campaigns. To take an example, in its most recent revenue figures, Snapdeal revealed a loss of Rs 1,328 crore and a revenue of Rs 937 crore. The company’s losses are roughly 5 times what it reported last fiscal. The majority of the expenditure has been attributed to Advertising and Promotions, to the tune of just over Rs 1,000 crore (Source: Trak.in)
Flipkart, the largest e-retailer in the country, reported losses just shy of Rs 2,000 crore for the year ended March 2015, according to a filing with the Ministry of Corporate Affairs (MCA). International heavyweight, Amazon, reported net loss of Rs 1,724 crore for the year ended March 2015. Other e-commerce platforms are yet to break even though their losses are lesser, not surprising, considering the wide difference in investments and expenses.
This widening gap between loss and revenue is not going unnoticed. Recently, Flipkart saw two more investors mark down their valuation of the company. Over the past few months, a total of 4 investors have lowered the company’s valuation. This means that Flipkart, which peaked at $15 billion just an year ago is now valued at $10 billion. The valuation game is hitting other players too. Snapdeal, which is currently valued at around $6.5 billion post its fresh round of funding in February, was involved in long drawn negotiations with Alibaba, from which it sought investments and it was rumoured that one of the major stumbling blocks was that Alibaba did not agree with the high valuation of Snapdeal.
It is a similar case at Jabong, which has been going through a somewhat rough patch over the last few months. The founding team has mostly exited the company and it is being led by an interim CEO directly sent over by parent company Rocket Internet. Rocket Internet has been trying hard to find a buyer for Jabong, which not so long ago, was one of the strongest players in the online fashion retail space. The buzz is that buyers are not seeing eye-to-eye with Rocket Internet when it comes to how much should Jabong be valued at. The turn of events is surprising; Jabong was once considered, by Rocket Internet’s own admission, one of its top 6 most valuable properties globally. But, perhaps, this is a reflection of the high stakes in e-commerce ecosystem in the country.
How does this affect ad spending?
The general consensus seems to be that we will see a reduction in ad spends by the major e-commerce players to a more sensible amount rather than the blitz of big money campaigns that have been the staple over the past couple of years. Analysts we spoke to have also predicted that this would apply to discounts being offered during shopping season. To get an idea of the spends that e-commerce players engage in; Flipkart, Amazon and Snapdeal are collectively thought to have spent around Rs 1,500 crore on marketing during the 2015 festive season.
http://www.exchange4media.com/marketing/flipkart-amazon-snapdeal-collectively-splurge-rs.-100-120-crore-on-festive-sales_62017.html
However, the spending by the big 3 (or 4) might be expected to reduce, overall the e-commerce industry is still expected to be the biggest contributor to ad spends this year. The reason for this is that analysts expect the smaller, and newer, players to step up brand campaigns.
Housing.com is another internet company that spent in excess of Rs 150-200 crore on advertising in 2015. This year, it launched its first ever TV campaign and the company says it will splurge around $5-7 million on advertising this year.
http://www.exchange4media.com/advertising/housing.com-looks-at-marketing-spends-of-usd-5-7-million-in-2016-17_63990.html
CouponDunia is also looking to spend money this year as it looks to push its new identity and business direction. Talking to exchange4media recently, Ankita Tandon, COO at CouponDunia, informed us that the company would spend around Rs 12-15 crore in Q2 followed by a larger 360 degree campaign during the festive season.
http://www.exchange4media.com/digital/coupondunia-revamps-business-identity-to-focus-on-cashbacks_64230.html
Meanwhile, the likes of Amazon and Flipkart took advantage of the IPL to launch fresh campaigns but it will be interesting to see how long, and intensely, they continue the momentum.
GroupM TYNY report predicts that e-commerce will constitute 8.1 per cent of the ad revenue pie in 2016.
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E4M Our strategy is to target younger audiences through Sports: Rajiv Dubey, Dabur
The Head of Media at Dabur India spoke exclusively to exchange4media on the World Cup, associating with Indian Idol, the company’s digital spending and much more
With quirky campaigns, memes and moment marketing, timed with the ongoing World Cup and particularly the India-Pakistan matches, Dabur India has got considerable consumer attention for its popular brands – Red Paste, Cool King Hair Oil, Chyawanprash, Dabur Vita and the recently launched Bae Fresh Gel toothpaste.
The 140-year-old company is going big on key sporting events, World Television Premiere (WTP) movies and reality shows. It is now gearing up to become the title sponsor of popular talent show ‘Indian Idol’ on Sony TV for the first time, shared Rajiv Dubey, who leads the media strategy at Dabur.
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Swapan Seth's new book 'COOL' is out
The book is a reflection of the author's 'eclectic taste across categories'
Advertising professional and art collector Swapan Seth has announced the launch of his new book COOL. The book is described as "a ready reckoner to the hip and the happening, of the known and the very unknown."
The book is a reflection of the author's "eclectic taste across categories: from boltholes to exotic hideaways."
COOL has been published by Simon & Schuster India and is available on Amazon.
Seth is an ad veteran with a long and illustrious career in the industry. He became the youngest-ever Creative Director at Clarion at age 24. He was VP at 26 at Trikaya Grey. Two years later, he started his agency Equus.
He writes for publications such as The Economic Times, Hindustan Times and India Today. This is his second book and he has previously published THIS IS ALL I HAVE TO SAY.
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Disney Star signs 9 sponsors for Asia Cup PAK
Charged by Thums Up, Nerolac Paint+, Amazon Pay, Jindal Panther, My11Circle, MRF, Samsung Galaxy Z Flip5, Wild Stone and Thums Up come on board
e4m Staff Disney Star has signed nine broadcast and digital streaming sponsors for the upcoming Asia Cup.
Charged by Thums Up, Nerolac Paint+, Amazon Pay, Jindal Panther, My11Circle, MRF, Samsung Galaxy Z Flip5, Wild Stone and Thums Up have come on board for the upcoming tournament.
As reported earlier by exchange4media, Disney Star has sought Rs 26 crore for the co-presenting sponsorship on TV and Rs 30 crore for Disney+ Hotstar.
According to industry sources, the associate sponsorship on Star Sports has been priced at Rs 19.66 crore, whereas for the ‘powered by’ sponsorship on Disney+ Hotstar, the broadcaster is seeking Rs 18 crore.
As per the information available with exchange4media, Disney+ Hotstar has three sponsorship tiers-- co-presenting (Rs 30 crore), powered by (Rs 18 crore) and associate sponsorship (Rs 12 crore). The broadcaster is offering an estimated reach of 120-140 million for co-presenting sponsors, 90-100 million for powered by and 60-70 million for associate sponsorship.
A spot buy for 10 seconds has been priced at Rs 25 lakh for the India vs Pakistan matches, while for the non-India matches, the ad rate for 10 second is Rs 2.3 lakh. The India matches plus the final for ODIs has been priced at Rs 17 lakh per 10 seconds.
Asia Cup is scheduled to be held from 30 August, 2023, to September 17, 2023.
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Sorted 360 wins creative & social media mandate of Reliance Mall
The agency will manage offline and online campaigns for Reliance Mall
Sorted 360, an integrated creative and social media agency, has won the mandate to providing brand solutions for Reliance Malls across India.
“Sorted 360 is set to enhance Reliance Malls' market presence with their unparalleled creative prowess and strategic thinking,” read a press release.
“Sorted 360's commitment to pushing the boundaries of creative communication aligns perfectly with Reliance Malls' ethos. With a pan-India presence spanning across 19 cities and growing, Reliance Malls has consistently captivated customers by offering an array of Reliance brands and third-party fashion & lifestyle brands. The mall has established an unparalleled connection with its patrons through superior quality, a remarkable value proposition, and an unmatched shopping experience,” it read further.
"We are thrilled to welcome Sorted 360 as our trusted partner in advancing our brand presence across the nation," said the Head of Marketing at Relaice Malls. "Their proven expertise in retail, shopping center management, and innovative creative strategies make them the perfect fit for our vision."
"Partnering with Reliance Malls is a testament to our commitment to shaping extraordinary brand experiences," remarked Prerana Anatharam, Co-founder of Sorted 360. "We are excited to leverage our strategic and creative acumen to further elevate Reliance Malls as the epitome of convenience, choice, and excellence."
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KlugKlug onboards Hemang Mehta as Country Manager for Indias
Mehta was most recently Head of Agency Relationships at Network 18 Media & Investments
KlugKlug has appointed Hemang Mehta as its Country Manager for India.
Mehta will play a pivotal role in driving KlugKlug's growth and expansion within the Indian market and be responsible for Sales & GTM Strategy
Prior to that, he has also represented organisations like Exponential (now VDX.tv), India Today Digital and Rediff.com. His expertise spans various domains including digital media sales, mobile marketing, media planning, and buying, social media marketing, and more.
Hemang Mehta expressed his enthusiasm about joining KlugKlug, saying, "I am thrilled to be a part of KlugKlug, a forward-thinking platform that is reshaping the influencer marketing landscape. As much as I look forward to collaborating with the exuberant team at KlugKlug, I am super excited to interact with the brands to deliver powerful data-backed Influencer solutions that will guarantee business outcomes."
Commenting on the appointment, Kalyan Kumar, Co-Founder and CEO of KlugKlug, stated, "We are excited to welcome Hemang Mehta to our team as the Country Manager for India. His extensive experience in digital media sales and marketing will be instrumental in driving our efforts to provide influencer marketing solutions to our clients. We believe Hemang's leadership will be key in scaling our operations and expanding our reach within the Indian market."
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