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india: India Inc likely to spend 20-25% more on advertising in the second half of 2023


Advertising and consumer promotion expenditure is expected to surge a record 20-25% year-on-year in the second half of 2023, spurred by factors such as the Cricket World Cup, a rainy summer that has led companies to postpone ad spends, and the festive season, said executives.

Spending is expected to be led by sectors such as ecommerce, fast-moving consumer goods (FMCG), travel and hospitality, apparel and fashion, fintech, banking, retail and automobiles, they said.

“We see a very big season for advertising starting September, much higher than the previous year,” said Sam Balsara, chairman of Madison World. “The World Cup will be played in India, on prime time, and it coincides with the Diwali season.”

Madison World represents the likes of Asian Paints, Raymond, Titan, TVS Motor and Marico.

Executives said launches that were postponed – either because of unseasonal rains or inflationary pressures – in January-June would make a comeback in the second half of the year.

Blitz on the pitch
“Cricket alone has three big events – Asia Cup, Australia’s tour of India and the World Cup. Over and above (this), new general entertainment shows and fresh seasons of reality shows are lined up in the second half of this year,” said Vinit Karnik, head (sports, e-sports and entertainment) at the WPP-backed GroupM South Asia.

“All of this in the festive season is very attractive for advertisers to reach out to their target consumers. The (second half) of the calendar year has huge potential and is expected to see significant growth in terms of ad spends,” said Karnik.

Since India is hosting the World Cup on its own for the first time, the event is drawing interest even from non-traditional advertisers.

Milind Pingle, chief executive of Allana Consumer Products that sells premium ice-cream brand London Dairy, said, “The third quarter is pertinent to drive our brand’s agenda, considering the festivals. This year, the Cricket World Cup makes it even more exciting.”


‘Second’ summer
Companies making cooling products such as soft drinks, ice-cream and refrigerators are banking on the second half to make up for the double-digit rain-induced decline in sales, especially in the crucial June quarter.

Sundeep Bajoria, vice-president at beverages maker Coca-Cola, said, “Connecting our brand with consumers beyond summer continues to be our focus. It’s important for beverages to be integrated into occasions.” Earlier this month, he said the second half of the year would see a lot more advertising spend and consumer connect since the summer had been challenging.

Dabur, too, recently said it expects higher advertising intensity forecast in the year’s second half since input costs such as crude and palm oil had declined in the past three months.

Kamal Nandi, executive vice-president at consumer durables and appliances maker Godrej Appliances, said, “Ad and promotion spending on appliances like refrigerators is going to be big in the festive season, especially with the premium segment seeing high traction.” Nandi said high-end television brands would see incrementally higher spends because of the upcoming cricket season.

Gaming spoiler
However, the 28% goods and services tax (GST) levied last week on online gaming companies – which usually spend extensively on live events – would impact their ad purse, said a senior executive at a gaming company. “Unless there is a rollback of the GST, we will have to miss ad spending in such an attractive season, in all likelihood,” he said, requesting not to be identified.

In a February report, GroupM forecast that India’s advertising expenditure will increase by Rs 20,000 crore in 2023, a 15.5% increase year-on-year, driven by the expansion of 5G services beyond major metros, and affordable smartphones, among other triggers.

That guidance could now be revised upwards with the cricket season and what is being pegged as a “second summer,” executives said.

The Cricket World Cup will be played from October 5 to November 19. According to travel industry executives, airline fares and hotel rates have skyrocketed more than 300% for key matches such as the India-Pakistan clash, the opening match and the finals. India is scheduled to play Pakistan in Ahmedabad on October 15.


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