Festive season ad spends to rise by 60%

22 Sep,2011

By A Correspondent

Despite a slowdown in economic growth during the first quarter of 2011-12, many companies plan to unveil new products during the upcoming festival season and back their marketing plans with aggressive advertising, discount offers and brand promotion, industry body Assocham said.

Several of them – especially fast moving consumer goods (FMCG) companies-have hiked their advertising and promotional budget by 60 per cent compared to previous year in an effort to perk up demand and shore up revenues followed by home and electronic appliances, real estate, textiles, gems and jewellery and luxury products, according to The Associated Chambers of Commerce and Industry of India (Assocham).

Nearly 150 corporates in ten major cities including Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Ahmedabad, Pune and Chandigarh were contacted between July and August. The chamber said companies selling home and electronic appliances, automobiles, textiles, gems and jewellery, luxury products and homes expect sales to go up by 30 to 40 per cent.

The festival season generally accounts for 40 to 45 per cent of annual ad spending by Indian companies, said Assocham secretary general Mr DS Rawat. “The trend is likely to continue this year as well in spite of disconnect between macro-economic trends and micro factors.”

Electronic appliances are on the top advertisers on TV for a 2011 followed by retail, auto and cellular services with a five per cent increase in ad spend as compared to festive 2010. Some of the brands that spent big on corporate advertising are Videocon, Whirlpool, LG, Britannia and Samsung.

Mr Rawat further said that the consumers’ spending intentions are turning into actual spending reality, which is translating into advertising activity rapidly returning to pre-downturn levels. The average increase on advertising spending on media has been 30 to 35 per cent on a year-on-year basis.

Festivals like Durga Puja, Dussehra, Diwali and harvest festivals in south India are also something that the people of the region look forward to.

The survey also adds that companies too take advantage of the festive fervour making planned efforts in campaigns aimed and the enhanced customer spend expected.

Ad spends in TV and press will be up by 45 per cent as compared to festive 2010. While FMCGs and corporate ad campaigns dominated TV, while print was a more mixed bag, with spends coming from auto mobile, durables, real estate and cellular services, according to Assocham.

Nearly 65 per cent of the marketing heads said that companies see in the festive season a perfect time to advertise their products. Even as the media cost has been reasonable, except for certain television prime time slots, companies want to work closely through consumer touch points in retail outlets. Moreover, televison and radio media are increasingly used to promote activities in a mall or a retail outlet, added the survey.

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