Monday, February 18, 2013

India Inc sees a spurt in Oct-Dec ad spends

CHENNAI: After a year's relief, advertising by FMCG companies is back, and with a bang.

The advertising spends of FMCG and retail companies have gone up significantly in the December 2012 quarter compared with the spends in December 2011 with some companies spending upto 80% more on advertising this fiscal. Godrej Consumer Products for instance, which spent about Rs 58 crore on advertising in the December 2011 quarter dished out roughly Rs 107 in December 2012 and Colgate-Palmolive (India) gave about Rs 99 crore for advertising in 2012 compared with Rs 68.94 it had set apart last year, data from CMIE showed.

"Companies went slow on advertising last year due to the lull in the economy and when they re-enter after a break, it has to be strong," said Harish Bijoor, an independent brand consultant. Globally, companies went slow on ad spends last year but Indian companies are now showing greater confidence in advertising," he said.

Increased competition too has reflected in the ad spend. "Companies that have entered new categories have spent a lot to outshout existing brands, and established brands are fighting back with a lot of ads," said Ramanujam Sridhar, CEO of BrandComm, a brand communications consultancy. "New categories in cosmetics like whiteners for instance have emerged and there are a lot more players now with similar products," Sridhar said.

Also, newer categories of companies have taken to advertising. "We see a lot more of education institutions, e-commerce firms and food retail outlets advertising today," Bijoor said.

With the stability in the economy, especially in the FMCG market, advertising over the next year will continue to eat a lot more into a company's budget than it did, and there is going to be "no let up" in spends over the year, Sridhar said.

Bijoor estimates that overall spends over the next year could grow about 17%.

And the media for advertising is set to change. "In 2012, a large chunk of spends of FMCG companies last year went to TV ads and they aren't yet spending as much as they should be on social media marketing, Bijoor said.

"A bulk of our advertising has always been on electronic media/television and this continues. While we have increased our presence on social media with our brands, television continues to account for a bulk of our advertising spends, said Lalit Malik, the CFO of Dabur India.

Social media marketing today is what radio was 15 years ago - people are still experimenting, but this is surely set to increase, Sridhar said.

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