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Companies looking to increase advertising spend on early signs of demand revival: Report

The outlook seems optimistic as India nears the end of Lockdown 4.0 on May 31, and Lockdown 5 is expected to bring further ease in restrictions – especially for malls and retail

May 28, 2020 / 10:12 AM IST
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Representative Image

Brands are looking to resume advertisement expenditure as early signs of a revival become clearer.

Fast moving consumer goods (FMCG) companies, groceries and home care brands, electronics companies and smartphone makers and retailers are considering extending ad spends as demand in these sectors continues to be steady, The Economic Times reported.

The outlook seems optimistic as India nears the end of Lockdown 4.0 on May 31, and Lockdown 5 is expected to ease restrictions further – especially for malls and retail. Most advertising had paused during the lockdown period which began from March 25.

FMCGs are likely to focus spend in the packaged food, health and hygiene products categories where demand is high; while smartphone and electronics makers are likely to proceed with new product launches and offers. The imminent festival season is also expected to push ad spends further, it noted.

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A spokesperson for ITC told the paper that advertising is “expected to increase as things start normalising” and consumption demand improves. Spend has been increased for items such as biscuits, noodles, flour (atta), juices and hygiene products since April and will likely reach pre-COVID-19 levels soon, they added.

Besides ITC, Amul, Marico, Dabur and Godrej are also increasing ad spends, having introduced close to 40 new products over the past two months.

Among smartphone makers, Sony, Vivo, Xiaomi and LG have begun preparations for new launches on the expectation of revival from suppressed demand once lockdown restrictions ease; and Xiaomi in fact did not reduce marketing budget.

Shashi Sinha, CEO of IPG Mediabrands said they expect ad spends by 80 percent FMCGs to touch pre-COVID-19 levels as distribution woes ease. “Companies fear market share loss if they do not invest in advertising.”

It is critical to have a top of the mind recall and investing in advertising is more important now than earlier, as consumers are buying whatever they can find on the shelves, said

B Krishna Rao, category head at Parle Products seconded the notion: "We will spend aggressively on advertising which will help us stay relevant and take advantage of a situation when rivals could lower their marketing spends to save costs.”

Koshy George, Chief Marketing Officer at Marico said the company would undertake “selective advertisement and promotional spending on discretionary segments while reallocating budget from non-media to media channels in the near-term.”

E-commerce giants Amazon and Flipkart are also gearing up for a return of sales events and have restarted digital adverts.

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first published: May 28, 2020 10:11 am
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