D2C Brands Eye Payment Gateways
These brands are seeing the value of advertising on these gateways as a means to grow customer acquisition
At a time when payment gateways in the country are eyeing a larger share of the digital payments pie, they appear to have found an ally in the form of direct-to-consumer (D2C) brands who are seeking to promote their products and services. These brands believe that payment platforms could be a good way to acquire new customers via advertising.
The payment apps have managed to collect a large captive user base post the pandemic and boast of high daily user engagement rates on the digital payments front. In fact, in recent times the big guns such as Paytm have become network participants of the government-sponsored ONDC, offering their apps to buyers to acquire products from across the country.
Early mover advantage sees Paytm ahead
In fact, Paytm appears to have the early-mover advantage at this juncture having already started making ad revenues into the mix, riding on the 85 million-plus monthly transacting users on its platform. As on date, arch rivals PhonePe claim 440 million overall customers though it is not clear as to how many of these actually buy products.
There have been reports of PhonePe shifting gears to capture this growing eCommerce market developing through the ONDC protocols which have, in recent times, seen the onboarding of state-level businesses such as Kudumbashree of Kerala. Products manufactured by women’s cooperatives in Kerala are now available to a larger audience through these buyer apps.
An innovation that targets Ads better
In fact, these payment platforms could be just the dose of innovation that the D2C brands could do with. Not only are they cheaper in terms of cost-per-conversion compared to the traditional social platforms such as Google and Facebook, being on them via the ONDC protocols means buyers can order with just a click on these apps with payment going directly to the seller.
Marketing experts say that the average cost per mile (per 1000 ad impressions) for payment apps work within the Rs.70 to Rs.150 range on a daily basis, with close to three-fifths of the total advertising spend arriving on these platforms through direct deals with the brands. This removes the commissions brands spend with media buying agencies.
A quick review of the Paytm app suggests that a large chunk of advertisers are D2C brands though it may still take some time for the marketing teams at these businesses to cotton-on to what essentially appears to be a more targeted effort at acquiring customers. Some of the brands that appear on these payment platforms also offer rewards and coupons to buyers whose response is almost instantaneous.
Per current data, most brands spend less than a tenth of their digital marketing budgets on the payment platforms, with a whopping 80% still going to Facebook and Google as well as the programmatic websites. However, these could change in the near future as more D2C brands get into direct contracts with the payment platforms.
