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Why is FlipKart wasting all their money like this??

By Snehil Khanor on 18 Comments / 6179 views

So I am looking to purchase a WhiteBorad online.. Lets goOgle it!

 

 

searchwhiteboards

 

 

 

The top most paid ad says “Buy Whiteboard online | Flipkart”.. Hmm.. FK sells WhiteBoards too.. cool.. Lets buy it from there then..

 

*Click*

 

AUHK! Its a long page.. but why are there so many books listed..maybe my board is somewhere in there..

 

*CTRL+F*

 

notfoundhmm.. now thats SAD!

 

Why-o-Why is FK spending on these ads when those visits wont get converted any way.. just to gain a visit count??

 

I understand they might be targeting the keywords “buy” and “online”.
But is it the right thing to do??

 

Where is the intelligence in marketing??

 

I’m not a marketing ninja.. nor am I an expert on how not to burn ur VC money ASAP. But just from the POV of the user.. what good it brings??

 

WHY??

 

Lemme know if you know..  and also share your views on what could have been a better solution??

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18 Comments

  1. and even the first organic link was of no help..

    Is even goOgle getting dumber??

  2. flipkart is doing this because junglee and homeshop18 and everyone else are doing this. Its all about incoming links, doesn’t matter if the product is not available, but at least a prospective customer is, and the one who is willing to shop online.

    So what if flipkart don’t have the product customer wants, he *might* end up buying something else. It is always in hypermarket you enter to buy something and end up buying much more other thing even if the product you wanted in first place was out of stock. I see a sense in madness.

  3. Interesting view by Snehil…it does make some sense that even if the ad is not relevant for flipkart…it may be intending to get more footfalls and that people will buy something at-least if not the intended one which dictated the search in the first place…

  4. But won’t 90% of those visitors bounceback?

    I am looking for a specific product.. whiteboard in this case.. I’m not gonna buy a damn book.

    and I can only assume that this must be a super expensive place to advertise at.. so if thesevisits are not turning into transactions.. then isnt it just the waste of money??

    shouldnt they save that cost and instead bid higher on some particular keywords related to the products they actually sell??

  5. but isnt this an expensive place to advertise for a *might*??
    And just because every one else is making mistakes.. is it absolutely necessary for them to do it too??

    Wouldn’t being intelligent and not to just follow what others are doing make them stand out of the crowd?? After all.. this is the game of last man standing..

  6. Right.

    Hi Snehil,

    To answer this query, there are two things you need to understand – your “assumption” that it is a super expensive place to advertise is wrong. And it might seem like a waste, but not really. Here’s why:

    1. First off, the cost of advertising in Google search will be upto Rs 10-12 per click – secondly, the Indian search volume for “Buy White Boards Online” is about 140 searches. (~approx Rs 1500-1600/month). Now the online marketing team at FlipKart are not fools.

    2. At this point, you will need to understand how these ads appear: Flipkart has not created any ads for “buying white boards online”. However, they have used a “dynamic keyword insertion” feature. Which means the ads will automatically take the keyword from your search term and show it in the ad.

    3. For a company that has a marketing budget of over a crore, it is not really a very high spend.  Wasting money on such types of ads can mean a few things:

      • The company gets an insight into what are the products in demand in the current market.

      • Also, I am pretty certain Flipkart is gaining good view through conversions. Which means, you might be a  person who won’t be buying anything else other than a white board. But there are enough people who would easily be a buyer once they land on the site.

      • Creating a  brand presence online is usually another reason. Which is very important. You and I might be very much aware about Flipkart, but there will always be people who have only heard about or been at Flipkart at the very first time by clicking through these untargeted ads.

    It is like this – you yourself said 90% of the visitors bounce back – but the 10% are ROI.
    Cheers. Looking forward for more contemplations with you.

  7. Actually YES.. If its actually just 10-12rs then I did make a wrong assumption.. Are you sure?? Because it just feels very cheap.. I mean it is the place which is bound to be clicked.. as PEOPLE OFTEN CONFUSES THEM WITH SEARCH RESULTS. So I figured it must be expensive..

    But still.. Whiteboard is just one example.. there must be 100 more such cases.. I remember I was once looking to buy Levi’s jeans online then also I saw FK’s ad up front..

    And not all of them would be just 140 searches / month..

    So I guess we can safely add two more Zeroes to the 1500-1600 per month figure.. which makes it 150000-1600000 Rs per month.. Which I think is a big deal even if the budget is in crores..

  8. I don’t buy it.

    1. So, Flipkart pays Google Rs. 10 for disappointing customers? Why would anyone advertise a non-existent product just because marketing is cheap?

    3. I think they can get insights into the products in demand even without fake advertising. I’m sure they have tools sophisticated enough to track trends and keywords.
    4. Sure, people might buy things other than a whiteboard. What would the conversion rate for such incidences be? 1% might be a very optimistic guess. So, to get one customer, Flipkart is ready to shell out Rs. 1000 and disappoint 99 other people?
    5. Brand presence, yes. But a bad first impression.

  9. Although u missed out 2nd point..  But I’ld still give your 5 points a big applause.. 😉

    And actually.. best way to gain insight would be to log into you google analytics and navigate to site search to see what users search on your site that you are not selling..

    DONT CRAP ON MY GOOGLE SEARCH RESULTS.. 😐

  10. Hi Nishant/Snehil,

    Feels great to connect with you guys.

    • Flipkart does not really give an inappropriate result. If you click on the Flipkart ad for White Board online – this is what you will get: https://i.imgur.com/c01u0.png. 

    • And yes, I searched for “Buy Levi’s Online” too. For Levi’s, Flipkart does show an ad – but it is a generic ad. As you can see here: https://i.imgur.com/HbM9w.png! Which is a brand building exercise (please note – there are no Flipkart ads for Levis, Levis jeans or of that sort)

    • The other points that I mentioned above stand true, because conversion rate of 1% is not an optimistic guess it is rather wrong. Nothing out of arrogance, my current job profile is to handle Facebook and Google advertisement online. And I have seen people purchase products in view through conversions – far away from what they had set off to buy.

    • @Snehil – It is true there might be hundred or perhaps 1000s of such cases – I am pretty certain the cost to company is not very high in that. They are able to build a great brand presence in the process and also bag a few transactions. 

    Best.

  11. As an after thought Snehil, no one is crapping on your GOOGLE SEARCH RESULTS. It is an advertisement, not the result. And it is the users liability if he happens to clicking on an ad and not finding it useful.

  12. No it was not a generic ad then.. I dodnt took a screenshot..

    But here’s a present screenshot which actually shows Jeans in the title(look at the right side)..
    And when I searched it 3 4 months back.. it was placed on top of search results..

    https://www.imagebam.com/image/334e4c197676846

    Although this link took me to results of “jean india” on site having 3 results.. but my whiteboard search took me to apage where there was “whiteboard” nowhere on the page

  13. but these are placed where the Click density is the most.. as it gets your eye.. Its not easy to avoid.. Infact there’s been a lot of cases outside india where people have sued google because of these.. and in one such case maybe in australia.. google was even fined.. because some one sued google that i was searching for something and google instead showed me something else in form of an ad above the actual search results.. I’ll try n find that article link.. it was in ET.

  14. Well, the whiteboard ad result would also take you to a page which has “whiteboard” related products. As I showed you: https://i.imgur.com/c01u0.png

    But its possible it was not the case when you clicked. I agree.

  15. yup.. I’ve posted above the whole screengrap + the CTRL+F view too..

  16. I don’t have intricate knowledge of online advertising or ecom, but, from what I’ve read 2% – 5% is the normal conversion rate for ecom sites. For disappointing customers, it should fall to below 1%. So, what is the average conversion rate? Some people even claim a double digit conversion rate!

    It’s not just about having a good brand presence. People should come to respect your brand. All these pesudo-karts floating around on the ecom scene – it does get them notice, but does it get them respect?

    If Rakhi Sawant were a company, I’d say she has an amazing brand presence. But is it worth it?

    Or maybe I’m just overrating the consumers 😀

  17. LOL for the Rakhi sawant analogy.. 😀

  18. I know this is like a really old post but I would like to share my knowledge here. What Flipkart is basically doing is using the Dynamic keyword insertion ( DKI ) option in Adwords ( Google’s advertising platform ). 

    With this option you can choose to show ads for what the user is searching for. In your case when you looked for white board Adwords will automatically churn up an ad for it and display it for you. Now you might be wondering why would anyone want to do this, especially in this case when Flipkart is not even selling any white boards!

    The reason is simple. To create ads for all the categories and products manually would be a long and elaborate task in Adword’s backend. Also this kind of ads positively affect the quality score of Flipkart’s ads in Adwords. What this does is it reduces the cost per click to a great extent and also cost per acquisition. The whole idea here is to ger as many customers as possible and make them aware of it. 

    Using this technique there is a very good chance they are targeting keywords/products which they are not even selling but they are saving a lot of time and money by using and therefore it sets off the negative impact of this technique. Lot of companies use this kind of technique to traffic to their website.

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