Hindustan Unilever (HUL) has increased its advertising budget by Rs 679 crore in a single quarter, the July-September period, reported The Economic Times. This takes it back to March 2021 quarter levels of 11-12 percent of sales after nine quarters. India’s largest spender on advertising wants to maintain its ad spends because of increasing competitive intensity.
According to the report, the company has been gradually increasing ad spending over the last quarters – 7.2 percent to 8 percent, 8.8 percent, 9.9 percent and 11.4 percent in the September quarter, reaching close to its pre-inflation benchmark levels. The last time HUL had posted a share of more than 11 percent of advertising and promotional expenses to sales was in the March 2021 quarter.
HUL made price cuts last quarter in both fabric wash and household care to pass on the benefits of lower input costs. However, the advertising spends of these categories have been amped up because of competitive intensity.
Companies like Colgate-Palmolive and Marico also expanding their advertising spend by 26-32 percent vent year-on-year in the September quarter, stated the report. This is mainly because companies are showing improvement in margins due to the reduction in input cost pressures.