Achhe din are almost upon us — this festival season will see India Inc
spending over Rs 2,000 crore on advertising, marketing and promotions,
which will be a five-year record, and a sharp contrast to the pessimism
of past few years. ET spoke to scores of companies, media planners and
advertising agencies, and they were unanimous in predicting a record
spike in advertising spends.
The heaviest ad spending will be concentrated in the Onam to Diwali (September-October) period.
Ecommerce companies such as Flipkart and Amazon will be major spenders. So will be big companies selling everything from smartphones and smart clothes, flat screen TVs and feature-rich refrigerators, and cars and cosmetics.
The heaviest ad spending will be concentrated in the Onam to Diwali (September-October) period.
Ecommerce companies such as Flipkart and Amazon will be major spenders. So will be big companies selling everything from smartphones and smart clothes, flat screen TVs and feature-rich refrigerators, and cars and cosmetics.
India
Inc to spend Rs 2,000 crore on ads during Onam-Diwali The big spenders,
apart from Amazon and Flipkart, will be Sony, Samsung, LG, Amazon,
Reliance Retail and auto majors. Companies and media buyers told ET ad
spends will be 20-50% higher than last year.
They attribute the sharp hike to change in sentiments following the change in government, an uptick in macroeconomic data and a general sense among business that things are going to get better.
"Even concerns over a bad monsoon are fading away, so we expect a cracker festive season this year," said Sony India Managing Director Kenichiro Hibi. The Japanese major will increase spend to Rs 200 crore this season compared with Rs 130 crore last year.
"Sentiments have changed with the change of government. Certain sectors such as ecommerce companies will increase spends by at least 40-50% this festive season because from chocolate to automobiles to homes — they now sell everything," said Ashish Bhasin, chairman & CEO South Asia Dentsu Aegis Network. Aegis plans and buys media space on behalf of companies.
Overall, advertising spends this festive season will be at least 15-20% higher than last year, said Basabdutta Chowdhury, CEO, Platinum Media, a media agency of the Madison Group. The growth last year was in single digits.
As per industry estimates, consumer electronics market leader Samsung is expected to increase ad spend by more than 30% to over Rs 300 crore.
Declining to share numbers, Samsung India Deputy Managing Director R Zutshi said the company will run localised promotions this year. Panasonic is spending Rs 85 crore — its highest ever in India, while homegrown Videocon will spend over Rs 150 crore, company officials said.
The festive season traditionally accounts for 40-45% of consumer durables sales. But past four years have seen growth flattening in the appliances category and just 10-15% growth in flat screen televisions.
Sales started reviving from April-May, making companies optimistic of a turnaround, said Panasonic India MD Manish Sharma.
Autos are no different. Data from the Society of Indian Automobile Manufacturers show sales of passenger vehicles grew for the third straight month in July, indicating a slow recovery in a market that's been depressed since 2010.
Top automakers Maruti Suzuki India, Hyundai Motor India and Tata Motors are going to increase ad spend to support new models hitting the road around festive season, said media planners.
But the real big spenders will be the newest kids on the block — ecommerce companies. Media planners say Amazon and Flipkart are expected to spend Rs 50-60 crore each on advertising, including creative and media. Both companies refused to share marketing spend, citing company policies.
Other new-economy players such as Infibeam and Shopclues told ET they will double their spending during festive season. Infibeam will spend almost Rs 25 crore; 60% on digital marketing and the balance on print and TV campaigns.
Shopclues co-founder and Chief Marketing Officer Radhika Ghai Aggarwal said the online marketplace will debut its advertisement campaign ahead of the festive season this year.
Brick-and-mortar retailers aren't going to be far behind. "In absolute terms, ad spends will be highest ever during Diwali as we have more brands to promote compared with last year. It should be roughly 8-9% of the total sales," said J Suresh, managing director of the Rs 1,800-crore Arvind Lifestyle Brands.
Arvind sells more than 28 owned or licensed fashion brands, including Calvin Klein, Nautica and US Polo Association.
Leading durables retailer Croma is planning to advance its festive campaign by a few days. "The three-day sale during the Independence Day week that went really well is a classic indication on how the festive season could pan out," said Ajit Joshi, MD & CEO at Infiniti Retail that owns Croma.
Some market observers say FMCG companies will take a little more time to hike their ad spends to levels expected in other sectors.
Otherwise, come September, prepare for an ad and marketing blitz and look for the best deals.
They attribute the sharp hike to change in sentiments following the change in government, an uptick in macroeconomic data and a general sense among business that things are going to get better.
"Even concerns over a bad monsoon are fading away, so we expect a cracker festive season this year," said Sony India Managing Director Kenichiro Hibi. The Japanese major will increase spend to Rs 200 crore this season compared with Rs 130 crore last year.
"Sentiments have changed with the change of government. Certain sectors such as ecommerce companies will increase spends by at least 40-50% this festive season because from chocolate to automobiles to homes — they now sell everything," said Ashish Bhasin, chairman & CEO South Asia Dentsu Aegis Network. Aegis plans and buys media space on behalf of companies.
Overall, advertising spends this festive season will be at least 15-20% higher than last year, said Basabdutta Chowdhury, CEO, Platinum Media, a media agency of the Madison Group. The growth last year was in single digits.
As per industry estimates, consumer electronics market leader Samsung is expected to increase ad spend by more than 30% to over Rs 300 crore.
Declining to share numbers, Samsung India Deputy Managing Director R Zutshi said the company will run localised promotions this year. Panasonic is spending Rs 85 crore — its highest ever in India, while homegrown Videocon will spend over Rs 150 crore, company officials said.
The festive season traditionally accounts for 40-45% of consumer durables sales. But past four years have seen growth flattening in the appliances category and just 10-15% growth in flat screen televisions.
Sales started reviving from April-May, making companies optimistic of a turnaround, said Panasonic India MD Manish Sharma.
Autos are no different. Data from the Society of Indian Automobile Manufacturers show sales of passenger vehicles grew for the third straight month in July, indicating a slow recovery in a market that's been depressed since 2010.
Top automakers Maruti Suzuki India, Hyundai Motor India and Tata Motors are going to increase ad spend to support new models hitting the road around festive season, said media planners.
But the real big spenders will be the newest kids on the block — ecommerce companies. Media planners say Amazon and Flipkart are expected to spend Rs 50-60 crore each on advertising, including creative and media. Both companies refused to share marketing spend, citing company policies.
Other new-economy players such as Infibeam and Shopclues told ET they will double their spending during festive season. Infibeam will spend almost Rs 25 crore; 60% on digital marketing and the balance on print and TV campaigns.
Shopclues co-founder and Chief Marketing Officer Radhika Ghai Aggarwal said the online marketplace will debut its advertisement campaign ahead of the festive season this year.
Brick-and-mortar retailers aren't going to be far behind. "In absolute terms, ad spends will be highest ever during Diwali as we have more brands to promote compared with last year. It should be roughly 8-9% of the total sales," said J Suresh, managing director of the Rs 1,800-crore Arvind Lifestyle Brands.
Arvind sells more than 28 owned or licensed fashion brands, including Calvin Klein, Nautica and US Polo Association.
Leading durables retailer Croma is planning to advance its festive campaign by a few days. "The three-day sale during the Independence Day week that went really well is a classic indication on how the festive season could pan out," said Ajit Joshi, MD & CEO at Infiniti Retail that owns Croma.
Some market observers say FMCG companies will take a little more time to hike their ad spends to levels expected in other sectors.
Otherwise, come September, prepare for an ad and marketing blitz and look for the best deals.
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