Digital Platforms go into Advertising Business for Sellers

Flipkart is turning into an ad agency with its ad platform for sellers to make use of their user traffic.

Times of India reports that Flipkart has introduced native advertising for companies to engage better with customers on its mobile platform, including for brands that do not sell through it, as India's largest online marketplace seeks to monetise its sizable user traffic. Through Flipkart's new 'brand story ad format', companies will be able to target specific customers browsing through products related to their own on the online marketplace — similar to what Snapdeal has just rolled out. Companies will also be able to use data from Flipkart for generating sales leads or run pre-product launch surveys.

"Unlike a Google, which is search and display-focussed, or Facebook, which is more social, we are very transaction-focussed with a strong purchase intent," said Ravi Garikipati, whom Flipkart hired in June as entrepreneur-in-residence to grow the online advertising business it launched this year. "Our brands will also get a holistic view on their return on investments on the marketing spends (and) about a user's awareness of the product, intent to buy, to the final purchase," Garikipati said. Flipkart started offering online advertising and brand consulting for its merchants early this year, diversifying into fee-based businesses to carve out new high-margin revenue streams and accelerate profitability.

In August, ET reported that Flipkart was firming plans to phase out the commissions it charges merchants and instead urge them to advertise on its platform, for a fee. Co-founder and group chief executive Sachin Bansal heads the advertising business. The company has since launched a product listing ads platform on its mobile app for sellers to be able to promote their products. Flipkart has more than 5,000 brands listed on its platform and 50,000 sellers, which it wants to double. "Over time, we want to be able to create our own publisher network since we have strong user profiles," said Garikipati.

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