FMCG TV ad volumes surge 6% in first half of 2023 on rural demand picks up

In the first half of 2023, the advertising volumes for Fast-Moving Consumer Goods (FMCG) on television rose six percent compared to the year ago period driven by demand uptick in the rural markets over the last few months.

Television advertising volumes for fast-moving consumer goods (FMCG) companies rose six percent in the first half of 2023 from the year-ago period, driven by demand uptick in the rural markets.

May had the highest share of ad volumes at 17.5 percent, followed by April at 17.1 percent. February saw the lowest share of ad volume at 15.6 percent, TAM AdEx’s half-yearly advertising report said.

“Whenever there is a revival in demand, the companies also start to spend on higher ad spends those result in the higher ad volume,” said Ajay Thakur, Research Analyst at Anand Rathi Institutional Equities. “Gross margins are also improving for FMCG companies, which help in drawing back the margins into higher ad spends.”

In the leading 10 categories, food and beverages dominated, taking up four spots. Toilet soaps climbed to the top position, securing a nine percent share, the report, which analysed ad trends in the FMCG sectors across digital, print, television and radio platforms, said.

Collectively, the foremost 10 categories constituted 45 percent of the ad volume during the first six months of this year.

Hindustan Unilever emerged as the leading advertiser, accounting for 23 percent of the ad volume. Dettol-maker Reckitt Benckiser (India) claimed six of the top 10 FMCG brand spots. Combined, the top 10 advertisers were responsible for a significant 68 percent of the ad volume in the first half of 2023, the report released late in August said.

“As the raw material prices remained stable companies are likely to pass on the raw material prices to increase volume growth and at the same time, they will also increase the ad spends to increase share of voice and regain the market share from other competitors and small players.” said Preeyam Toila, Senior Research Analyst at Axis Securities.

The second half of a year is most important for the whole consumer sector, including FMCG, because of the festival season, said Toila. “So, consumer companies are likely to increase ad spends which will increase ad volumes.” he added.

Festival season is when households tend to spend more on, clothes, travel and even big-ticket items.

Analysts said that among the FMCG categories some of them would see a higher revival.

“I believe personal care is one segment where there has been a revival after almost five-seven quarters. So that category can benefit more than other categories in terms of ad spend,” Thakur said.