With downtrading taking its toll on the advertising budgets of fast-moving consumer goods (FMCG) firms, below-the-line marketing companies are seeing an unprecedented boom in business. The turnover of the sector is expected to double from Rs 250 crore in 2003 to Rs 500 crore in 2004 and Rs 1,000 crore in 2005.
Unlike conventional advertising, below-the-line promotions try to give consumers a first-hand experience of products and services through roadshows, events and product samplings.
“Five years ago, this industry was growing at a rate of 40 per cent. But over the last two years, the growth has been close to 100 per cent, with large FMCG companies cutting down on advertising and increasing promotional spends,” said Pankaj Wadhwa, managing director, Kidstuff Promotions.
Kidstuff, which had registered a turnover of Rs 20 crore last year, specialises in conducting contact programmes with school children and housewives. The company is working with companies such as Hindustan Lever and Pepsi.
A Hindustan Lever spokesperson agreed that the company was putting greater emphasis on direct consumer contact than ever before. He said: “There is a far greater emphasis now on a 360-degree communication strategy, which involves a lot of ground-level branding.”
Some companies have already tasted success through their below-the-line campaigns. Sandeep Kapoor, managing director of Relioquick Marketing, which specialises in rural promotions for automobile companies like Hero Honda, Hyundai and Tata Motors, said enquiry generation and customer conversion rates in rural areas were on the rise.
“At village fairs and haats, there are about 50 enquiries a day for two wheelers and five a day for cars, and the conversion rate is about 40 per cent,” Kapoor said.
Naturally, some of these companies are being targeted by large advertising agencies for their niche expertise. “In the current scenario, it makes more sense to buy a below-the-line promotions company than an ad agency. Over the next five years, I foresee nearly 50 per cent of our revenues coming from promotions and related activities,” said Nirvik Singh, chairman (south Asia), Grey Global Group. According to Singh, Grey is currently in talks with a few below-the-line marketing firms.