As marketers globally face budget constraints, the digital advertising landscape has been rapidly evolving. Spends on Search are being slashed as ad impressions declined. Ad dollars are now being shifted to conversion-focused platforms such as e-commerce and social media channels, paving the way for an exciting new era of dynamic advertising opportunities.  

The Flipkart ad business grew fast during the pandemic when millions of consumers shifted to e-commerce shopping. The company registered about 50 percent year-on-year growth in ad revenue at about Rs 3,300 crore in FY23, compared to a year ago, as per its financial reports. 

e4m caught up with Sandeep Karwa, Vice President, Flipkart Ads, to understand the company’s strategy, growth targets, innovative solutions, gaming integrations and plans to leverage AI and Olympics. 

Excerpts: 

Flipkart reported Rs 3,300 Cr of ad revenue in FY23, almost a 50 percent jump compared to a year ago. Could you elaborate on what unique features set it apart from other e-commerce advertising platforms?

I'll not go into specific numbers, but I think we've seen tremendous growth and interest from our brand partners and sellers. They are not just advertising with basic search-led ads but also exploring new formats and concepts across the shopping funnel. What sets Flipkart Ads apart is the complementarity between selling products and advertising. This leads to more incremental business, allowing brands to measure and optimize their spending more effectively. This trend is global, with retail media gaining rapid traction in places like China and the US. In India, we adapt and surpass these trends quickly, making retail media an exciting space. I'm fortunate to be part of this journey, creating innovative tools for our brand and seller partners.  

What metrics and analytics do you provide to advertisers to measure the performance of their campaigns, and how do you foresee Flipkart IRIS transforming campaign evaluation?

Flipkart IRIS is something very close to my heart. We launched it earlier this year to create a significant change in advertising, not just on Flipkart. IRIS helps brands figure out what products to build, their communication strategy, specifications, and even offline spending. In terms of campaign management, Flipkart provides tools for advertisers to measure their campaigns at various levels, from a holistic overview to detailed breakdowns by days, weeks, or months.  

Brands can see pre- and post-campaign performance, and we offer recommendations on where to allocate their budgets. Seasonality is an important factor we help brands understand and leverage. 

Iris is not just about ads; it offers brands intelligent data insights across the shopping funnel, from awareness to consideration to purchase. It helps brands see how their products perform at each stage and provides insights into consumer behavior, such as what alternative products consumers buy if they don't choose a particular brand. This data-driven approach allows brands to refine their strategies and products continuously. 

Which category of brands are aligned with you on IRIS? If you can share their numbers as well?

Over 2,000 brands of various sizes and shapes use IRIS. This includes legacy brands, large conglomerates, and newer D2C brands. Legacy brands use IRIS to understand consumer reactions to their products and communication, while newer brands use it to define their products, pricing, and communication strategies. IRIS enables brands to experiment and refine their strategies based on weekly data insights. This wide spectrum of users shows how versatile and valuable IRIS is for different brands. 

Could you share a case study where your solution worked out very well?

Rather than a specific brand, I'll share some general mission statements. For example, an electronics brand wanted to test a new concept without focusing on sales. We created a 360 campaign, including on-platform and off-platform elements, to gauge consumer interest. Another FMCG client wanted to drive engagement using a sporting event, so we created an interactive game for them. We've also developed new ad formats like video and GIF-led banners and carousel banners with different landing pages.  

These innovations allow brands to test and refine their strategies while engaging consumers meaningfully. In the grocery and fashion segments, a fashion brand used short-format videos to drive consideration and engagement, leading to increased platform engagement. These examples show how brands are finding value in our innovative solutions. 

You also mentioned gaming integration. How is it doing, and how do you plan to expand it?

Gaming integration is very interesting. We have plans for the Olympics and other sports events, creating engaging games on the Flipkart app where brands can drive their message without being intrusive. For example, we have a cricket game where players see brand ads on hoardings within the game. This non-intrusive approach is engaging and effective. We are also exploring personalized games and gamified solutions where consumers can earn rewards or discounts. With the festive season and big billion days coming up, these innovations could become very exciting. 

What are your plans for the Olympics?

We are working with brands that have official rights and associations with the Olympics to integrate their communication into our platform. This aligns with our broader strategy of using e-commerce to drive brand awareness and engagement beyond just sales. E-commerce visibility impacts offline sales as well, and we aim to leverage this by creating comprehensive campaigns that resonate with consumers across all touchpoints. India's rapid technological adoption and young population provide a unique opportunity to drive brand engagement through e-commerce. 

How do you leverage machine learning and AI to optimize ad targeting and improve campaign performance?

AI is redefining personalization by processing large data sets to create more precise targeting. Targeted ads are not new, but AI reduces leakage and enhances accuracy. We can now customize ads based on individual preferences, such as creative formats and call-to-action messages.  

Although we are still exploring AI's full potential, we are making significant investments in this space to provide our brand and seller partners with advanced tools. For example, we are developing AI-driven tools to help sellers create banners and creatives without needing extensive resources. These tools will soon be launched, making it easier for sellers to advertise effectively on Flipkart. AI's potential to transform advertising is immense, and we are excited about the possibilities.

What trends do you foresee shaping the next-gen advertising strategies?

E-commerce advertising in India will continue to grow due to increased digital adoption by brands and consumers. The expansion of the digital ecosystem, including digital payments and media consumption, positions e-commerce platforms at the centre of this growth. This creates opportunities for meaningful brand engagement. 

Another trend is the shift towards full-funnel marketing on e-commerce platforms, encompassing awareness, consideration, and purchase stages. This opens up new opportunities for us. 

Innovation in ad formats and tools will also be crucial, with interactive ads, video ads, and advanced targeting capabilities continuously evolving. Data-driven marketing decisions will become more prevalent, and platforms that provide actionable insights will have an advantage. Overall, the future of e-commerce advertising in India is very promising, and we are excited to be leading this evolution. 

What are your expansion and growth plans?

We will continue to innovate on ad formats, exploring new swipe-based formats and enhancing personalization through device ID signals and consumer data. We are also expanding off-platform efforts, working with our logistics partners to monetize various aspects of our ecosystem. This includes offline reach and packaging. 

Our goal is to provide brands with diverse ways to tell their stories. The current growth trajectory is essential for Flipkart's larger profitability goals, and we aim to sustain and build on this growth quarter on quarter.

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