Flipkart, Snapdeal don’t want to lose out on revenues by selling cheaper goods; increase advertising rates

Advertising rates for products have been significantly increased by Flipkart and Snapdeal on their respective platforms. All the e-commerce companies are letting sellers on their marketplaces use the portal as an advertising platform for higher discoverability and attract new customers.

Snapdeal has just doubled the cost per click (CPA) for all the categories of products during its ‘Unibox Diwali Sale’ from October 2- 6. Flipkart, however, has increased its product listing ad (PLA) rates by up to 50% for several high value categories including lifestyle, home furnishing, mobiles and electronics during its 'Big Billion Day' sale, again from October 2nd-6th. Though, Amazon India has not changed its advertising rates during its ‘Great Indian Sale’ from October 1-5.

"During the Big Billion Day Sale there will be a huge increase in traffic, time spent by the consumer on the platform, and engagement. There will at least be 2x returns on investment only due to the increased traffic even if we don't take into account the other metrics. Even on television and other media the ad rates go up during certain times and advertisers are prepared for it," Sanjay Ramakrishnan, senior director, product marketing, at Flipkart told ET.

It has been confirmed by a Snapdeal spokeperson that the rates have been revised in accordance with the surge and traffic during the festive season.

Experts from media said that this development will create a bigger impact on small seller that manage their own advertising campaigns on ecommerce portals more than larger brands whose advertising campaigns are managed by media agencies.

"Media agencies purchase inventory in advance when rates are still low," said a senior media executive who requested not to be named.

Giants like Snapdeal and Flipkart have a manual system for advertising on their platform. Amazon, on the other hand, has an automatic system where sellers can set their budget and let the system bring in the most clicks within that budget.

Amazon has also introduced a payment system which is followed by the US giant in developed nations such as the US, the UK, Germany and Japan. The system allows sellers on its marketplace to advertise on its portal without advance payment.