FMCG's digital AdEx at par with TV: What’s driving the growth
In five years, FMCG's digital AdEx share ballooned from 27% to 47%, according to dentsu-e4m Digital Advertising Report 2024
There has been a notable shift in the media spends of the fast-moving consumer goods (FMCG) sector over the last four years, with digital and TV ad spends reaching a harmonious balance, each accounting for 47% of the total media expenditure, according to the latest dentsu e4m digital advertising report.
This equilibrium between digital and TV reflects the evolving landscape of advertising within the FMCG industry, where traditional mediums like television advertising, dominant in reaching wide audiences for a long time, now share the spotlight with digital platforms.
Notably, the FMCG industry’s share of digital AdEx in the total media spend was a mere 21 percent in 2020 which went up to 34 and 38 percent in the next two years reaching to 47 percent in the year 2023, according to the latest and previous dentsu reports.
FMCG continues to be the highest spender with Rs 31,428 crore of total ad spends in 2023. The category contributed nearly one third of ad revenue (Rs 14,775 or 36%) to the Indian digital media industry last year.
As consumer behaviour continues to migrate towards online channels, FMCG companies are adapting their marketing approaches accordingly, investing significantly in digital advertising to engage with their target audiences across various online platforms, industry experts say.
“This significant shift in the advertising spend share has primarily been facilitated by relentless enhancement and developments in digital infrastructure, benefiting both supply and access sides. This has catapulted the growth in segments like OTT, e-commerce, online payments, social media, gaming and esports applications across the entire user base, establishing digital media as the most accessed, utilised and trusted medium among consumers,” said the report.
“FMCG’s increased spending on digital media reflects a shift in consumer behaviour towards online channels, and the budget allocation indicates a recognition by FMCG brands of diversifying their advertising approach. This also reflects the increasing influence along with the wide, and targeted reach of online platforms,” says Abheek Biswas, AVP, Consumer Insights, dentsu India.
As per the lates e4m-dentu report, digital media witnessed the fastest growth rate of 36.6 percent over 2022. The medium is expected to maintain its growth trajectory, projecting a 25 percent increase to attain a 50 percent contribution to the Indian advertising market by the end of 2024.
Most spends on video
The report highlights that the FMCG sector’s digital media spending is driven by online video (44%), followed by social media (25%) and paid search (13%) which is against the general pattern where social media spends are highest followed by online video.
Explaining the factors driving massive investment in online video by FMCG firms, Biswas shared, “Emphasis on online video and shift from social media by FMCG suggests a strategic adaptation to consumer preferences for visual content consumption. This underscores their acknowledgment of effectiveness of video content in conveying their brand messaging in an immersive and engaging manner.”
As per a report published by Media Partners Asia (MPA), Indians had an impressive 6.1 trillion minutes of video consumption during a 15-month period spanning January 2022 to March 2023. YouTube had the lion's share of online video consumption in India (88%) followed by OTT (12%).
FMCG digital media spends over five years
