E-commerce adex soars as brands funnel budgets into high-ROI platforms during the festive season

New Delhi: With the festive season upon us, e-commerce advertising is poised to reach new heights.  However, with budgets shifting toward high-return placements, e-commerce ad rates are expected to rise, fueling fierce competition for premium spots.

Recent numbers show a surge in e-commerce sales during Rakshabandhan and the preceding sales period, with brands ramping up their e-commerce advertising spends to unprecedented levels. This trend is indicative of what we might expect in the festive season. 

A media planner told BestMediaInfo.com, “For instance, during Rakhee Weekend, some of our brands experienced a huge surge. They were able to meet their monthly sales targets in just three days.”

Giving an analogy of increased spending by brands on e-commerce during the festive period, a media strategist said, “Suppose a brand has a budget of Rs 100. Previously, it might have spent Rs 5 on e-commerce, but now that amount has increased to Rs 10-15 because of the significant upticks in return on investment (ROI) they’re seeing.”

With over 48% of the annual revenue across the e-commerce platforms, Lavie will be taking up all major placements across e-commerce portals, said Ayush Tainwala, CEO, Bagzone Lifestyles. 

“We invest approximately 23-26% of the overall budget during the festive month. Additionally, we hold approximately. We are expecting a hike of 3.2x to 3.6x in sales during the festive period,” he added.

Ad budgets will be reallocated towards high-ROI e-commerce placements, with ad rates expected to climb due to fierce competition for premium spots.

Prakhar Srivastava, Finance Controller at White Rivers Media, noted that with the start of the festive season, there will be a strong emphasis on high-ROI e-commerce placements. 

“Ad rates on e-commerce platforms are anticipated to increase in 2024 due to intense competition for premium placements. The absence of major events like the ICC World Cup will shift brand attention towards traditional festive promotions and digital advertising, resulting in a more balanced allocation across channels but with a marked focus on high-traffic e-commerce platforms,” he explained.

Last year, the festive season clashed with the World Cup, which saw inflated ad spending from brands. However, experts believe that there may not be a major impact on e-commerce platforms in terms of ad spending. Brands from categories including electronics, mobile or fashion, usually have a separate budget for e-commerce platforms, keeping in mind the expected traffic. 

While e-commerce advertising will surge during the festive season, some industry experts believe that overall ad rates on these platforms will not see a significant rise, except for key display inventories on the homepage or category pages, which could see an increase of 10-15%. They further noted that ad rates for most display and programmatic inventories typically bought on a cost-per-mille (CPM) basis, are expected to remain stable.

Roushan Anand, Vice-President, Havas Market India, stated that the biddable search campaigns and CPC (cost per click) for most of the categories are expected to jump by approximately 40% or even higher. 

“It depends on traffic and the brands' competition for the same audience, but this is not new as it’s a usual trend now. Effective CPC rates go higher during any sales days, compared to days when it is business as usual,” he commented.

Neha Singh, VP and Group Business Head at Enormous Brands, emphasised that a significant factor driving increased traffic on e-commerce platforms is the intensified marketing push by these platforms during the festive season.

She said, “E-retail growth and its surge in the past few years is a well-known fact. The sector is experiencing significant traction due to the sales pull strategies being deployed. With more consumers shopping online, these platforms are seeing a substantial increase in traffic. During festive seasons, this traffic surges even further, as platforms like Myntra, with their recent Rakhi campaign, and quick commerce players like Swiggy Instamart and Blinkit, also ran festive campaigns."

The e-commerce platforms would try to increase user engagement on the platforms in an attempt to increase the average time spent. According to experts, the inclusion of social commerce with platforms such as Mini TV and Prime Video, among others, brands have more avenues to chase an in-market audience within the platform.

According to Anand, e-commerce platforms, after the inclusion of Mini TV, Prime Video, and Fire TV, among others, are witnessing a rise in consumer engagement now and more ad space across the funnel. They are coming up with a good mix of ad packages to target consumers across channels within the network and may revise subscription fees as well.

Additionally, industry experts suggested that there would be a surge of targeted promotions, flash sales, and exclusive deals in popular categories. E-commerce platforms might leverage data to provide personalised experiences, enhancing ad effectiveness and boosting sales.

“Our data-driven approach forecasts an increase in visibility through targeted ads and optimised product listings, coupled with a rise in online sales driven by exclusive promotions. We anticipate a boost in customer engagement due to personalised marketing efforts, and our inventory management has been finely tuned to handle a projected surge in orders,” Vishal Chaturvedi, group chief revenue officer, The Body Shop India, stated.

Moreover, industry experts emphasised that discounts often become the highlight of the Indian festive season as e-commerce platforms gear up and brands ramp up their marketing to reach maximum potential customers as well as provide shoppers with discount offers. 

According to experts, brands consider product category alignment, directing budgets towards platforms that are industry leaders in their specific niche. For instance, makeup brands prioritise Nykaa, Purplle, and Amazon, while clothing brands concentrate on Myntra, and electronics brands emphasise Amazon.

As for the brands to actively participate during the festive season sales events on e-commerce platforms, experts stated that wireless (mobiles and accessories), electronics, home appliances, fashion & brands with gift packs are expected to advertise more. They further said that many smartphone brands schedule their new launches around this period, leading to a huge surge in the spends. 

However, brands have to compete against other brands to register sales. Industry experts emphasised that planning is extremely important to ensure that the brands choose the best placements to drive traffic. “As soon as the dialogue takes a festive turn across the nation, the biggest challenge is to stand out tall as a brand and reach your target group amidst the overwhelming number of promotions floating out simultaneously,” Mohit Goyal, co-founder and director, Swiss Beauty, stated.