Ad Spends By FMCG Majors Unaffected By Economic Slowdown

By SiliconIndia   |   Monday, 28 October 2013, 12:13 Hrs
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Bangalore: Many people cannot live without FMCG products. They are completely relied on these products that could be either for washing, cleaning or any other purposes. These FMCG companies are known to invest most of their revenue on ads. The primary reason behind it is to increase their volume, reports Digbijay Mishra of Business Standard.

While the annual revenue of these FMCG companies has increased by 15-20 percent, they have started to invest 25-30 percent of it on advertisements and sales promotions.

If we take ITC into consideration, which is one of the biggest companies in the Indian FMCG space, spent 806.65 crore (8.07 billion) in 2012-13 on advertising. Even Dabur, spent 502.37 crore during the current year.

According to an official from Dabur, “The ongoing quarter has seen higher spends than the previous one. It is important to continue ad and promotional spends, as its one of the key segment for any FMCG company.”

Infact in the past, many companies has taken a toll in due to their high spendings on advertisement.

“The biggest of the companies have faced margin issue, owing to high ad spends, but this has to be continued. Else, one would lag in terms of presence in the segments it is targeting,” said an analyst at Sharekhan. He continued to say, “You have to supplement these exercises by a number of marketing activities and promotional events. It always had an impact on margins, but this is one of the important ways to bring the eluding volume growth back.”

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