FMCGs Top The List Of Advertisers in 2023 Even As Startup Spends Come Down Dramatically

The top 10 advertisers were really predictable. In order of ranking from the biggest advertiser, it included Hindustan Lever, Reckitt Benckiser, Reliance Industries, Amazon Online India, Godrej Consumer Products, Cadburys India, Procter & Gamble, Coca Cola India, Maruti Suzuki India and Dream 11. Six of the top 10 ADEX companies are FMCG players, and the list of 50 has as many as 20 FMCG players.

Market researcher NielsenIQ recently said that FMCG companies had two good growth years in 2023 and 2022 and it was a no-brainer that they would be the ones willing to splurge on advertising to attract more sales growth.

Godrej Consumer Products has moved up in rank from number 12 to number 5, having increased spending by over 50 per cent. Britannia has more or less doubled its spending though on a smaller base. Other advertisers who have increased spending by 50 per cent are Vimal Pan Masala, Nestle, Phone Pe and Amul.

Top 50 Advertisers Account For 30 % Of All Ad-Spending

The contribution of the Top 50 Advertisers to total ADEX is 30 per cent as it was last year. And so is the contribution of the Top 10 at 14 per cent.

Said Rajesh Lalwani, Founder and CEO of Scenario Consulting that focuses on technology and marketing areas, “We can see that we are back to basics where FMCG companies have taken the lead, a reversal from last year when internet and digital companies also had an important share of the pie with the VC funding that was available then.”

It is also significant that the top 10 advertisers' spending has grown by almost 20 per cent, compared to total ADEX (Advertising Expenditure) growth of just 10 per cent, demonstrating that large advertisers have greater confidence in advertising, having substantially benefited in the past by using it effectively. Interestingly, there was a big gap in spend between the top company Hindustan Unilever (Rs 4200 crores to Rs 4400 crores) and the second one Reckitt Benckiser at Rs 1300 to Rs 1500 crores.

Not surprisingly, the other important category that emerged was E-commerce with the likes of Reliance Industries and Amazon Online. And, overall, there were only 11 new entrants compared to 14 last year emphasising the role of traditional players.

Eight out of the top 10 are the same as last year. Perhaps, predictably, there is only one startup this year, compared to nine last year, as they have slashed their advertising spending, after being uncertain about future rounds of investments.

Eighteen players gained rank while 16 lost out in the pecking order, making the top advertisers list quite volatile.

Television and Digital segments continue to be the favourites of top advertisers accounting for 88 per cent of their total spending. “Looking at this year’s trend and looking ahead, I believe that advertisers will also look to capture consumers from Bharat – the Tier II and Tier III towns,”Summed up Lalwani,

Going Forward: Digital Remains King

Going forward, the report predicted that Indian advertising spending growth for the year 2024 will be affected by global uncertainty including a spate of elections, three continuing wars, etc., as “we live in a connected world”, to be muted and likely around 12.2 per cent.

The forecasters felt advertising revenues to remain muted in the first half of the year and to bounce upwards in the second half, post-elections.

Digital ad spending will continue to be the key driver in advertising expenditure, accounting for 42 per cent of ADEX. However, the growth rate, which was 35 per cent in 2022 and slowed down to 15 per cent last calendar year, will continue to be in the 17 per cent range in 2024. This is because “advertisers around the world have begun to question the veracity of the data provided by the publishers themselves in the absence of a third party” which can cross-check and vouch for the reach achieved by digital adverts.

However, with all TVs currently being sold in the country being Smart TVs, the report forecasts that CTV and OTT penetration and viewership will dramatically increase and this is why the report believes it will continue to account for the biggest chunk of advertising revenues.

Despite the onslaught of Digital and the proliferation of digital media platforms, television is expected to remain a strong contender growing by 8 per cent or so to account for the second biggest chunk of advertising revenues at 32 per cent of the advertising pie.

Print in India continues to surprise the rest of the world. It is expected to grow by 7 per cent in 2024 against an expected degrowth in Print of -4 per cent in Global ADEX.

The print medium is expected to gain a big boost with the upcoming Parliamentary elections in April-May 20254 as it is a favourite of politicians and political parties. Moreover, space for political campaigns is sold at a substantial premium over rates charged to normal brands.

The report expects that with this projected growth, Print will hold its market share of 19 per cent. If that projection comes true, 2024 will be the first year after a gap of 13 years when the Print market share will remain steady over 2 years. All these 13 years Print Share has marginally declined, year on year.