The Big Spenders

Five years ago, domestic companies shared the honours with multinationals in the total advertising sweepstakes. Today, while some Indian companies like Nirma, Godrej Soaps and Bajaj Auto have been edged out of the list, homegrown outfits continue to figure prominently as big spenders.

Take the top ten advertisers in 1996. With an adspend of Rs 221 crore, Hindustan Lever continues its reign in the Rs 4,727 crore total media expenditure charts. While this accounts for a mere four per cent of the Rs 7,120 crore turnover, HLL is expected to increase ad outlay by another 30 per cent. Add to this the merged Brooke Bond Lipton and HLLs budget this year could be anywhere between Rs 350 to Rs 400 crore. Says Helen Anchan, media consultant at Ammirati Puris Lintas, Dont forget that while HLL might not have spent much on soaps, shampoo budgets have gone through the roof.

 

Already, the first five months this year saw the soaps, toiletries and foods conglomerate introduce as many as six new products and brand extensions. These include Sunsilk Ceramide shampoo, Lux shampoo, Close-up Renew, Pepsodent 2-in-1 and Kissan Tomchi. In fact, in the last four years, HLL has introduced as many as 40 products. The repertoire covers new brands like Pears face wash and Organics shampoo to line and brand extensions.

And most of it -- Rs 200 crore -- was spent on television. With a reach of 55 million households and 15 million cable and satellite homes, many of the toppers patronised television. Most of the companies have spent nearly 70 per cent of their ad budgets on the visual medium. Apart from the regular spot advertising, sponsoring programmes has become the in thing. What with almost every well known brand backing a programme, brand recall is said to be one of the highest for this genre.

Last year, Pepsi Foods spent Rs 23 crore on television alone. The advertising burst was largely during the February-March World Cup Cricket sponsored by arch rival Coca-Cola. With Coca-Cola, Pepsi and now Cadbury Scheweppes battling it out, soft drinks have emerged as a growing category on television. Nirma and Procter & Gamble which are not in the top 10 advertisers list, figure prominently on the television line-up.

The only exception is the Rs 3,548.61 crore tobacco major ITC. With cigarette advertising banned on television, the Calcutta-based company spends more than two-thirds of its budget on sponsoring events and below-the-line activity. The recent Pepsi Independence Cup in May saw ITC use cricketer Venkatesh Prasad to generate enough excitement around its Wills brand on television.

A surprise inclusion this year is Reliance. It is also probably the first time that a non-fast moving consumer goods (FMCG) company has made it to the list. This clearly indicates the battle in the marketplace. While Reliances Vimal Textiles has not advertised much last year, agency sources claim a large part of the money was apportioned to advertisingcapital issues. The company which raised more than Rs 3000 crore from the international markets in the last two years also had a handful of domestic issues last year.

Clearly, for most companies, the spends are largely driven by the categories they operate in. For instance, Colgate Palmolive which has seen its market shares in toothpaste and shampoos erode with competition from HLL brands is spending two-thirds of its ad budget on television.

Or consider the white goods category. With foreign brands like Sony, Panasonic, Samsung and Whirlpool, companies like Videocon International, Philips and BPL have had to spend more to maintain their share of voice. In fact, the last two years have seen these three companies emerge as major advertisers. Interestingly, the television category has slipped from the number four slot to number nine. Ad spends on the category have gone down from Rs 66 crore in 1995 to Rs 39 crore last year. Thats because, except for the brand names, there is very little to distinguish between television sets. Features are no longer a USP, says a leading television manufacturer.

Take Bangalore-based BPL group for instance. Two years ago, BPL was promoting its range of audio and refrigerator brands. Today, BPLs efforts are channelised towards enlarging the subscriber base for its cellular telephone services. With an aggressive player like Hutchison Max in the Mumbai circuit, the Rs 1,632 crore BPL group spent most of its Rs 66 crore budget on promotions and outdoor advertising for its cellular services. And with cellular phones emerging as a major category, BPL is likely to increase ad spend by 20 per cent.

While soaps, toothpastes and washing powders continue to be the mainline categories, a major segment is face creams and lotion. With growing disposable inc-omes, women are patronising skin care beauty products with a vengeance. Even as Lakme and Ponds continue to dominate the Rs 600 crore skin care market, the entry of new brands from LOreal, Benkeizer and Oriflame are increasingly adorning dressing tables.

This splurge in brand advertising, say industry sources has grown by more than 250 per cent in the last five years. But while the top spenders are hiking ad budgets, their share in the overall ad pie has been sliding. Five years ago, the top 10 companies accounted for 30 per cent of total advertising. In the last two years, it is down to 20 per cent, according to Lintas estimates.

With market fragmentation, ad budgets are going to be splintered across categories, says a media director.

Even so, FMCGs continue to dominate the market.

Unlike durables and financial products, it is a category which is less impacted by any kind of cash crunch, says Ketaki Gupte, senior vice president at Hindustan Thompson Associates. This is borne out by the fact that nine of the top10 categories on television are consumer softs. And six of the top 10 advertisers are FMCG companies. Clearly, the battle for market shares shows no signs of abating.