Flipkart Drags Western Digital & 19 Other Companies To Court Over Non-Payment of Online Ad Fees
As per reports emerging, it seems that Flipkart is taking their advertisement business pretty seriously; and they may drag several advertisers to Court over non-payment of advertisement fees.
Prominent among such defaulters include Western Digital, My-Popcorn and 20 other such advertisers who used Flipkart’s platform to display their ads, but haven’t yet paid the fees.
Last year, Flipkart has started offering their portal for in-house advertisements wherein sellers of their own platform and advertisers of various brands can display their ads on Flipkart.com. Even Snapdeal has started this new trend to open up a new stream of revenue. In fact, as per reports, both Snapdeal and Flipkart had hired large sales team to push for such advertisements.
However, it seems that Flipkart has completely mis-judged the payment collection process, as advertisers haven’t yet paid up the money which Flipkart owes.
Reportedly, these 20 odd defaulters owe Flipkart crores of rupees of advertisement fees.
Last month, Flipkart had allegedly filed a case at Delhi High Court against Western Digital for not paying dues pertaining to Rs 1 crore for digital ads.
But.. Why Defaulters Are Not Paying Up?
There are various methods and strategies involved in digital advertisements. For instance, Google, which earned more than Rs 4500 crore from India using their Adwords platform, ask advertisers to add their credit cards; and as soon as the ads appear, appropriate amount is deducted from the credit card.
With Facebook, they first display the ads, and then charge the appropriate amount from the attached credit card.
Amazon, another huge platform for digital advertisement, first charges a fixed amount as pre-paid charge, and then run the ads based on the amount spent.
However, with Flipkart, there was no such arrangement, which led to this confusion and chaos. Certainly big companies like Western Digital can afford to pay the amount, but in the absence of any automated process on Flipkart, they somehow missed the payment.
There has been no official response from any defaulter advertiser.
As per another report, Internet and Mobile Association of India (IAMAI) are developing a platform which will act as ‘payment mechanism system’ for the entire Digital industry. A special committee has been set up to include best practices of this sector.
We will keep you updated as more details come in..