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HUL, for instance, recorded a 30 per cent spike in its advertisements and sales promotion expenses at Rs 1,626 Cr in the December quarter compared to the third quarter in FY23. Though it is yet to match it Q1 spends of Rs 1,742 Cr.
Dabur India, Godrej Consumers Products Ltd, Colgate-Palmolive and Marico hiked their ad spend by 36 per cent, 24 per cent, 20 per cent and 12 per cent in the third quarter year-on-year.
Even as operational challenges continue due to uneven monsoon resulting in lower agriculture yield, most of these firms have plans to increase AdEx further in the next few quarters riding on gradual recovery in rural demands and premiumization.
Businesses expect recovery of consumption in both urban and rural markets due to more disposable income following an increase in government expenditure in the interim budget and positive consumer sentiment ahead of general elections.
Ayodhya Ram Mandirconsecration ceremony, held on January 22, has already set the tone. FMCG brands were at forefront in Ayodhya with their extensive promotional activities on ground. Many of them spent heavily in print and TV to promote their brands. e4m was first to report this story.
Rajiv Dubey, Media Head, Dabur India, tells e4m, “Marketing spends are likely to go up further in the current quarter (Q4) and in the next quarter as well as demands have started to pick up.”
The first quarter of FY25 would also witness Lok Sabha elections (Apr-May) which is the biggest event of the year. This would be followed by the Women Premier League, Indian Premier League (Apr-May), T20 World Cup (June) and Olympics (July-Aug), strengthening the boost to ad spends, Dubey pointed out.
Even firms like Parle Products, for which the December quarter used to be a lean period due to skewed demand, has started advertising now. Mayank Shah, Category Head of the company shared, “Our Q4 spends would surely be more. The momentum will continue during all big events lined up.”
A significant portion of this ad spend will go to TV media, mainly sports and news channels and digital, advertisers said.
Shankar Prasad, Founder and CEO of Plum, “We will continue to spend more in both performance marketing and brand building. Brand building will be done mainly through Connected TV which is relevant for our category (beauty). It allows us better targeting, retargeting and segmentation of consumers.”
HUL is also set to ride the digital wave after realizing that its modern trade is doing well and continues to outpace general trade. The company appointed a Chief Digital Officer (Arun Neelakantan) on January 1 who will steer the next phase of HUL's digital transformation journey focused on enhancing consumer and customer experience through digitization, said Rohit Jawa, Managing director and CEO of the firm, in the earning calls.
Notably, FMCG sector commands nearly one third share in the country’s tidal advertising expenditure contributing nearly Rs 16,400 Cr, as per the Pitch Madison Annual Report 2023.
HUL (Rs 4,000 Cr), Godrej Consumer Products (Rs 500 Cr), ITC (Rs 500 Cr), Marico (Rs 250 Cr), Nestle (Rs 250 Cr) and Patanjali (Rs 250 Cr) were among the top spenders in the category in 2022.
Although the FMCG sector’s AdEx grew by 5 per cent in 2022 compared to a year before, it was among the slowest growing sectors when compared with other major categories such as ecommerce (20%), real estate (15%), fashion & jewellery (40%) triggering widespread concerns.
