Wednesday 9 December 2015

Why e-commerce firms advertise offline

The readers and the newspaper's managing director were were obviously referring to the jacket ads that crammed the newspaper on both the days. The overdose of ads -- almost between 8 and 10 pages at the front of the book -- had evidently irked many readers who were looking for news. The newspaper was flooded by ads from e-commerce companies such as Amazon, Snapdeal and Flipkart, the country's premier online marketplaces, which were publicising their special sales for the festival season.

Similar jacket ads from Amazon and Flipkart appeared in HT Media Ltd's English daily Hindustan Times as well. The ads are hardly a surprise since this is the peak season for sales for most product categories. HT Media Ltd publishes Mint and Hindustan Times. The latter competes in some markets with The Times of India, published by Bennett, Coleman and Co Ltd.

To be sure, e-commerce firms are splurging big time on promoting their festival sales across media and a significant chunk of that money seems to be going into print. While their exact expenditure on newspapers is not known, what is clear is that the sector will spend Rs 3,500 crore on advertising in 2015, according to estimates by the WPP-owned media agency GroupM, constituting 7% of the Rs 50,000-crore total advertising expenditure.

Television, too, has been part of the e-commerce firms' media plan from the beginning of the year. Revised estimates by the Pitch-Madison report on media said that e-commerce companies grew their expenditure by 70% in January-June 2015 and a lot of it went into television. Overall, between January and June, advertising expenditure on television increased by close to 21% (opposed to the original forecast of 10% growth), led by categories such as e-commerce, packaged consumer goods, consumer durables, and banking and financial services, and insurance.

Although Madison did not revise its 5% growth rate forecast for print, it expected it to grow at a marginally faster clip. Given the flurry of festival advertising in newspapers led by e-commerce that's a distinct possibility.

The question, however, is why do these pure-bred online firms advertise offline? For starters, for a high impact campaign, print is still a must in India. Newspapers, especially in vernacular, continue to be robust and show an increase in readership. C V L Srinivas, chief executive of GroupM, believes that print continues to play a big role in driving sales for e-commerce clients. In India, brands cannot rely solely on digital media to create high impact in a short span of time especially when reaching out to mass audiences. They need a certain amount of air cover from traditional media, he argues. Since the window of opportunity for such discounts is small as these are limited-period sales, print advertising is key. And the e-commerce brands vied for attention via jacket ads as they are fighting for the same share of wallet during Diwali sales.

But the bigger reason why shopping portals are massive users of offline advertising, especially print and television, has to do with how the consumer behaves on these two media platforms. According to Anupriya Acharya, group chief executive, Zenith Optimedia, a consumer is in a "lean-back" mode while reading a newspaper or watching television. That is because he has set aside a time for television or newspaper consumption. In a lean-back state, he is more attuned or amenable to brand awareness or brand messaging.

On the other hand, on digital media, a consumer is in a more "lean-forward" state. While on the laptop or mobile, he is more purposeful and active. He is either talking on the phone or checking mail, using an app or gaming. This state of mind does not lend itself well to product or brand awareness, Acharya claims. Little surprise, then, that even the online brands want to catch the consumer offline when he's open to emo ional connect through a television commercial or reading its fine print in a newspaper.

Incidentally, newspapers are also chosen for their credibility. Print ads are seen as being more credible since they appear in the pages of brands that have been built over the years. The printed word enjoys greater trust.

Besides, a newspaper, with its daily print cycle, stands for immediacy. The ad has appeared today, so you feel you have to buy today. What better vehicle than a newspaper then to advertise your short-duration sale. Last but not the least, newspapers also offer a better shopping environment. The sale ads of the e-commerce brands appear side by side with ads from other retailers promoting their brands.

Idi Srinivas Murthy, senior vice president of marketing at Jasper Infotech Pvt Ltd, which runs Snapdeal, says that while it bought packet ads in newspapers, it advertised the Snapdeal sale in digital media, too. Digital works best in conjunction with print. Digital properties were used to drive the message home in Tier-II and Tier-III markets that comprise the smaller towns as consumers here are very active users of smartphones, he claims. For these consumers, mobile is their window to the world.

The advertising blitzkrieg seems to be working for the shopping portals. Recently, Mint reported hat Flipkart claims to have sold one million products and clocked six million visits to its app in the first 10 hours of the second edition of the Big Billion Days sale. The sale attracted buyers in Bengaluru, Delhi and Chennai among the metros and Ludhiana, Lucknow and Bhopal among the non-metros.Snapdeal, too, said that it saw 17 times growth in GMV (gross merchandise value, or the cost of goods sold on the platform) during its Electronics Monday sale, which had discounts on smartphones, laptops, other electronics and home appliances.

For now, it looks like a win-win or all. And the newspapers are not complaining.

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