Google and Facebook dominate online advertisement space in India and elsewhere. No one can even remotely close to the money they generate by selling advertising. While the likes of TikTok may change the status quo in the coming future, Amazon and Flipkart have cornered about 10% of overall money spent on online by brands in India.
Amazon is estimated to cross $100 million in advertising revenues in FY19. According to a Mint report, Flipkart projected to earn $200 million from advertising in the last fiscal. The growing scale of the duo in this segment has prompted Paytm to evangelise online advertising.
According to two sources, Paytm is launching a new product – Paytm Ads soon. “It has already started onboarding brands to buy advertising space on the web and mobile apps. The company is currently running a pilot with select brands including Redtape,” added sources on condition of anonymity.
Sources also outlined that Saloni Malhotra has been driving Paytm Ads. Entrackr has verified this through LinkedIn. As per her profile, she has been leading the new business for about five months. Her profile asserts that she has been building an Ad Sales network for Paytm in India with the strongest user base – the user who has the ability and authority to pay.
It’s not clear whether Paytm will only sell its own inventory or third parties inventory as well. It’s worth noting that Paytm has been generating revenue via selling ad inventories on Paytm Mall and Paytm. However, it wasn’t a formal business until recently. “It’s unlikely that the SoftBank-backed firm would start selling third-party ad inventories,” added sources.
Sources also emphasised that Paytm could try to build a full-featured network marketing platform akin to Alimama in the long haul. For the unaware, Alimama operates through a combination of search marketing, display marketing, promotion commission, as well as real-time bidding among other models.
Paytm has declined to offer any comments regarding this story.
Amazon and Flipkart have been selling advertising on organic leads as well as programmatic and direct sales. They don’t leverage agencies to sell ads on their platforms.
E-commerce majors Alibaba and Amazon have been generating significant revenue from advertising. According to research firm eMarketer, Amazon had posted $4.61 billion in digital advertising revenues in 2018. Meanwhile, Alibaba’s advertising platform Alimama generates over 60% of the company’s revenue.
Alimama helped the Jack-Ma founded company to earn $12.05 billion in ad sales in 2016. Paytm seems to be inspired by the humongous growth of Alimama in China and growing scale of Amazon and Flipkart locally.
Since online advertising market is poised to touch Rs 18,986 crore by 2020 as per Dentsu Aegis Network report, foray of Paytm is into space makes complete sense. Will Paytm be able to create a sizeable revenue from its promising advertising business? In fact, it could. Growth and scale of Paytm Ads will be an exciting business to watch out for.