History About Flipkart PLA
Not too long ago, Flipkart launched a native ad platform for its sellers called Flipkart PLA or Product Listing Ads. PLA.
After spending some time and money with the platform, its my conclusion that Flipkart PLA is far from a great solution to promote your products.
For those who are not familiar with Flipkart PLA, i’ll share a brief introduction.
As number of sellers on Flipkart grew large, new sellers coming on the platform faced a peculiar problem.
This problem was also faced by sellers who launched new products and also sellers with high number of SKU’s.
The problem is of product visibility on Flipkart.
Product visibility means how often and quickly can customers find your products on Flipkart.
Since Flipkart does not share data about how many views your products got, you sre essentialy flying blind.
To solve this problem, Flipkart introduced Product listing Ads, a simple an effective way to advertise your products to customers.
In the most basic sense, Flipkart PLA is a PPC platform. PPC means pay per click, that means advertiser pays money to Flipkart whenever a user clicks (or touches on mobile) a product regardless of whether they buy or not.
For those not familiar with PPC, let me give you a simple background.
PPC usually works on a bidding system. Advertisers who want to show ads essentially bid on how much they are willing to spend to get one click on their ad.
The advertisers who bids the highest wins the bid and his or her ads are shown.
The beauty of PPC advertising comes from 2 things.
1. Ability to generate traffic on demand.
2. Ability to optimize your ads/campaign to get better costs and better return on investment.
Flipkart PLA falls short on both these things for one simple reason.
Flipkart PLA has a fixed bid per category.
It does not sound like a big deal, but let me give you an analogy.
Imagine you go to a auction for rare painting.
Auctions are simple, you name your price and others name their price and person who bids highest wins.
Now suppose that the people conducting the auction say, “Hello everyone, we have decided to make few changes in how bids work. From now on, you can only bid the amount we decide. And everyone will have to bid the same amount.”
Baffled, you ask, “If everyone has the same bid, how do you decide who won?”
And you get the answer, “We decide the winner based on the data we have about you and the products we are auctioning.”
If you are confused, you should be.
Have you ever seen a government tender which says “All bids must be Rs X only”.
Dear Flipkart, that’s not how it works.
PPC vs Flipkart Ads
Let’s compare a typical PPC campaign and a Flipkart ads campaign.
In a regular PPC campaign, you would select few products, create ads around them and collect some data about which products your users are clicking on and buying.
After selecting the products which are performing well, you discard rest of the ads and focus your ad budget on good performing products.
Now the most important step:
You increase or decrease your bids based on your costs/traffic to increase your traffic and thus your sales and profits.
Now lets compare the same process with Flipkart PLA.
You select products and start a Flipkart Ad campaign.
After seeing which products are performing well, you discontinue ads for products that are performing poorly.
Now you wait. Unfortunately if:
You want to pay more money to get more visibility? Sorry not possible.
You profits are higher and if you want to spend more to get more sales? Nada.
You want to get more impressions by bidding higher? Not happening.
Essentially by fixing the CPX (cost per action) for your ads, Flipkart has defeated the beauty of PPC.
I raised the same concern to Flipkart Ads team recently and the response I got was:
Since I started using Flipkart PLA almost since the launch, I was sure that 2 things will happen.
1. In the beginning, sellers using PLA would get great visibility and profits.
2. As more and more sellers opt for PLA, no seller would profit too much from them.
Both the trends have come true.
This is an early campaign on Flipkart.
And now the stats look like this.
The drop in impressions in just a few months is dramatic. The worst part is that you can’t do anything about it.
What should have happened was as more sellers used PLA, the bids should have gone up and the sellers who spent the most money would have gotten the most visibility.
That’s how it happens in the real world.
The other big problem with Flipkart PLA
If fixed CPA was not enough, Flipkart did a double dose and made another product decision that is questionable.
And that no keyword based targeting.
Search is how most users find products on Flipkart and other e-com websites.
By understanding what words people use to find (any buy) your products, you can spend your ad money when people search for those keywords.
That is how AdWords works as well.
Now in Flipkart PLA, you can neither see nor target your ads based on keywords.
Since I sell cases, I will share an example.
Dressmyphone makes awesome cases, some of which are suitable for girls, some for boys and some both.
If someone on Flipkart searches for ‘Cases for girls’, I would like to advertise products which I think are suitable for girls.
Since Flipkart PLA won’t allow me to target keywords, I am sure many ads would be mis-targeted and totally ir-relevant to the searcher.
Flipkart Product Listing Ad (PLA) Isssue Tl;DR
In short, Flipkart PLA has 2 main issues.
1. Fixed CPX defeats the PPC concept.
2. No keyword targeting means you are flying blind.
Flipkart PLA looks like a great solution on the surface, but it falls short on many fronts.
Have you used Flipkart PLA. Share your experience (or regret) in the comments.