Could Ecommerce Shake Up the World of Advertising?

The advertising market in India clocked 11.1 billion last year, of which digital advertising was around 31.6 per cent or 3.5 billion. Ecommerce advertising was 20 per cent of this. As online retail business grows, so will the emphasis on ecommerce advertising

- Ajai Kumar Dayal

RETAIL HAS TRADITIONALLY meant getting products from manufacturers and stocking, displaying and selling them in brick-and-mortar stores. The problem of transporting, storing and displaying products, hundreds and thousands of them, was overcome by online stores by merely listing and displaying them with images. They also eliminated one key problem that physical retailers faced, i.e understanding what to stock and how much, by using a much more accurate gauge of demand; customer clicks and views.

This radical change in the last two decades is making it increasingly difficult for physical stores to compete. Of course, along the way Amazon, as the torchbearer, had to come up with a plethora of solutions for their challenges; getting outside sellers to stock, list and sell their products, opening up their stocks and pricing to sellers, allowing sellers to provide their own promotional content on the store and solving the sellers’ logistics problems with their muscle. It worked perfectly.

When Amazon and customer systems were linked through APIs Application Programme Interfaces) with thousands of outside sellers now active, it created unprecedented demand of course, but it also generated massive volumes of data which became difficult even for their huge computing resources to handle. A massive computing and storage behemoth, Amazon Web Services, AWS) was created to meet Amazon's own needs, but also as an independent revenue stream and it garnered external business of 31 billion in the last year.