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Soap ad opera takes a wrong turn

26-June-2004
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Soap ad opera takes a wrong turn

Hit by a severe downtrading, fast-moving consumer goods (FMCG) companies have pared their adspends by 10-15 per cent in the past year.

As FMCG adspends account for a third, or Rs 3,000 crore, of the Rs 9,000 crore Indian advertising market, the cuts could add up to Rs 300-450 crore.

The advertising and promotional budget for the country’s biggest advertiser, Hindustan Lever Ltd, has come down from Rs 859 crore in 2002 to Rs 759 crore in 2003.

“There is far greater emphasis now on a 360 degree communication strategy which involves a lot of ground level brand activation,” a Hindustan Lever spokesperson says.

“Adspend is a function of new product launches. We haven’t launched a lot of new brands in the last few years and our focus is purely on the 30 power brands.”

Nestle’s advertising budget is frozen at last year’s level and the company is working on improving the efficiency of the money spent. Procter & Gamble’s adspend has gone up only marginally, mainly on the launch of Rejoice shampoo and a new variant of Pantene.

Though there is no definitive research on the subject and FMCG companies are unwilling to disclose figures, senior functionaries in media buying agencies admit that fewer orders are being placed by FMCG companies.

According to Anita Nayyar, managing director (north), Starcom, the FMCG category, which was the biggest spender on TV advertisements for a long time, has been displaced to the fourth spot, after automobiles, consumer durables and services.

Adds CVL Srinivas, managing director, Maxus, “FMCGs advertise primarily on TV, and their spending seems to have come down by nearly 15 per cent.”

According to TAM Media Research’s Adex, which takes 2001 spending as the base, FMCG spending in the print media declined by 11 per cent, though it increased 10 per cent on TV by the end of 2003.

The same research said consumer electronics spending in print media went up by 30 per cent and on TV by 40 per cent during the period.

But media planners and television channels insist price wars and the resultant margin squeeze have forced FMCG companies to streamline their promotional budgets.

According to Rajat Jain, vice-president, Sony Entertainment Television: “The major FMCG companies are not as active on TV as they were a year back. One reason could be that they are looking at other modes of communication.”

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