India’s top fast-moving consumer goods (FMCG) companies have cut spending on advertisement and promotions in the second quarter of the fiscal year 2025 due to high food inflation and a resultant squeeze in urban demand.
TAM AdEx in its latest report mentioned that FMCG majors’ advertising volumes on TV saw a de-growth of 6 percent in the first half of 2024. However, ad impressions in the digital medium witnessed an increase of 7 percent in H1 2024 over H1 2023.
Hindustan Unilever Limited (HUL), the maker of brands like Dove, Horlicks, Closeup, etc, has slashed the ad spending by 14.8 percent between July and September quarter (Q2) FY 25 year-on-year. During the Q2 earning calls, CEO Rohit Jawa said that HUL is investing behind its brands, strengthening its brand power, “We have seen a very strong trend in our brand power growth, which is reflected in our market shares, and make sure that we consistently invest behind the market development bets because those are multiyear and they compound”.
FMCG advertisers spent more on digital and radio in H1 ‘2024
According to the Q2 earnings of HUL, the standalone ad and promotional expenses of the company stood at Rs 1,464 crore in FY 25 compared to Rs 1,720 crore in the corresponding quarter last fiscal. On a quarterly basis, HUL’s ad spending has also been reduced by 11 percent (approx) in 2024.
HUL cuts advertising spend, reports slight profit dip in Q2 FY25
Similarly, Good Knight brand maker Godrej Consumer Products dropped its standalone ad spending to Rs 263.57 crore in Q2 FY25 compared to Rs 279.44 crore in FY24. Marico trimmed down the ad and promotional expenses by 15.8 percent to Rs 117 crore in the second quarter of FY25. The company had spent Rs 139 crore in Q2 2023.
Marico’s profit soars 105% YoY, despite reduced ad spending in Q2 FY25
Dabur Ltd’s standalone ad expenses witnessed a decline but on a consolidated basis, it rose by 4.2 percent. However, Colgate Palmolive India and Patanjali pumped up capital on advertisement during the same period.
While Patanjali Foods stepped up advertising & sales promotion substantially to Rs 130 crore in Q2 FY 25, Colgate Palmolive increased ad expenses by 18 percent to Rs 242.72 crore in the same duration.
Prabha Narasimhan, Managing Director & CEO of Colgate-Palmolive (India) Limited said that the advertising spend increased by 17.8% in the current quarter as compared to the same period last year due to increased support behind both brand and category development actions.
Colgate’s ad spending up by 17.8% in Q2 FY25, net profit jumps to Rs 395 crore
“We expect continued difficult market conditions but remain committed to leveraging our very strong P&L which allows us to continue to invest behind superior products and advertising while we maintain our focus on ensuring better oral health for everyone in India,” she added.