In India, FMCG ad spending will be boosting consumption demand as disposable incomes grow rapidly and the underdeveloped ad market expansion is catching up. In the next three years, India will become the fastest growing country, spending 14% a year on food and drinks advertising for fast-moving consumer goods (FMCG). The agency reports on 12 global markets including the United States and Great Britain, saying that all markets will rise consistently between 2% and 5% a year, according to the FMCG Food and Drink Survey. FMCG spending in India will benefit from a booming consumer demand with ready-to-use earnings growing rapidly, along with a catch-up in the underdeveloped market: publicity accounts for just 0.3 percent of India’s GDP.
“For different factors, FMCG growth will remain robust. First of all, despite the pandemic there is a steady increase in demand. Secondly, FMCG is also seeing a host of new product releases and an increase in categories with changing market demand. Finally, with the vast majority of the population in tier 2 and rural areas, the FMCG brands continue to increase their penetration,” said Jai Lala, CEO of Zenith India. With regard to media platforms, Zenith provokes a 7 % rise of its annual advertisement expense for digital networks by FMCG as well as food and drink (F&B) brands by 2023. The annual growth estimated for FMCG ad spending for the 12 markets included in this study is well ahead of that of 4 %. FMCG brands, however, still rely heavily on TV, spending 39% of their budgets on TV ads in 2020 compared to average 24% for the brand. With the exception of China, where FMCG brands have already adopted the main form of marketing advertisement, FMCG brands have spent 52% of their budget on television as against the average of 26%. Their principal objective is to raise awareness and hit brands, so that there are as many customers as possible at the point of purchase.
Consequently, FMCG brands follow digital audiences. In Zenith, digital ad spending is projected to grow from $12.3 billion by 2020 to $14.9 billion by 2023, and its market share is projected to increase from 46% to 49% by 2023. Following the FMCG pandemic in 2020, brands will aim at encouraging and expanding their e-commerce capabilities by enabling customers to engage in direct-to-consumer (DTC) or retail relationships. But the major challenge is to use digital platform to fully replace televisions – building large scale brand recognition and frequency management. Increasing subscription video on demand (SVOD) rates will make it much harder.
Out-of-home is the exception to mass media’s decreasing scope. With the return of traffic usual after the Covid-19 downturn, the spread of digital displays would make it more efficient to hit customers near the point of sale with targeted and appropriate advertising. FMCG advertising outside the home is projected to increase by 9 % per annum between 2020 and 2023, although its market share is marginally higher than its pre-pandemic share of 6.8 % in 2019, from 6.1 to 7.0 %.
