FMCG majors boost ad spends in the festive-driven quarter; will the momentum carry over to elections?

Fast-Moving Consumer Goods (FMCG) companies have significantly ramped up their advertising investments during the October-December quarter of the fiscal year 2024, registering a noticeable drive to capture market share amidst festivities and sporting extravaganzas.

Top players such as Hindustan Unilever (34.49%), Dabur (36.13%), Colgate Palmolive India (20.20%), P&G (14%), Marico (11.82%), Godrej Consumer Products ( 24.47%), recorded a double-digit spike in advertising and promotional expenditure for the October-December quarter, year on year. 

The quarter saw a perfect storm of events, with the festive season, the ICC Men's Cricket World Cup, and the popular TV show Masterchef India all happening around the same time. This cluster of high-profile occasions likely spurred the significant increase in advertising spending during this period. 

The festive season traditionally sees a surge in consumer spending and engagement, making it a prime time for brands to promote their products and services. The ICC Men’s Cricket World Cup, being a global sporting spectacle, attracted millions of viewers, offering advertisers a massive audience to showcase their brands. Additionally, Masterchef India, with its widespread appeal and captivating culinary content, provided another avenue for brands to connect with consumers. 

Against the backdrop of these fiscal developments, the top players of the category have underscored the persistent traction in urban markets, juxtaposed with subdued consumer demand from rural India. Nevertheless, as these conglomerates anticipate a rural improvement in forthcoming quarters, they remain conscious of the impending electoral confluence, which may fuel sustained advertising momentum.

Elections in India have the potential to catalyse greater rural consumption, particularly when coupled with government spending and the onset of winter crop sowing. During election campaigns, political parties often announce various schemes and initiatives aimed at rural development, including infrastructure projects, subsidies, and welfare programs. 

This increased government spending injects liquidity into rural economies, stimulating demand for goods and services. Furthermore, the timing of elections coincides with the winter crop sowing season, a critical period for agricultural communities. Farmers typically invest in seeds, fertilisers, and equipment during this time, leading to higher agricultural spending and subsequently, increased rural consumption. 

To add another quotient of advertising bonanza in the current quarter, going into the next, will be the all new IPL season that will commence in March. The nationally celebrated tournament raked in Rs 10,000 crore in ad revenue last year.

With macro indicators pointing towards sustained government spending, coupled with more favourable consumer pricing across various FMCG categories, the outlook for consumption trends appears to be promising.