FMCG category continues to be the growth driver of Indian adex in 2024

As per GroupM, Madison and dentsu Indian adex predictions for 2024, FMCG will continue to be the growth driver for the Indian ad spends.

Ecommerce as a category has established itself as the second biggest contributor to adex as per the three reports.

The other top contributors to the Indian adex are Auto, offline retail, realty and SME.

Having said that, the three media agencies anticipate 2024 will also see an upside in spends by political parties ahead of the General Elections. Government advertising spends have grown by 62.2% over 2022, according to dentsu.

According to the dentsu’s estimates, in 2023, FMCG category held the largest share, contributing 34% (Rs 31,428 crore) to the Indian advertising market, followed by e-commerce contributing 14% (Rs 12,803 crore), consumer durables 6% (Rs 6,540 crore), and automotive sectors 6% (Rs 5,223).

Historically, approximately one-third of the annual spends in the Indian advertising industry has been attributed to the FMCG category. In 2023, FMCG category witnessed an ad spends growth of 22.6% over 2022.

Madison shared that there is no change in the Top 3 Advertisers of Adex - HUL, Reckitt and RIL. Godrej Consumer Products is the new entrant in the Top 5 list, having moved up in rank from 12 to 5. The Top 50 Advertisers list has 20 FMCG companies.

The FMCG segment spends 47% of their media budget on television and digital respectively, stated dentsu.

During the same timeframe, notable expansion was observed in the travel and tourism sector, recording a growth of 73.4% over 2022, followed by government advertisements with a 62.2% increase, and real estate experiencing a growth of 41.7% over 2022.

The Madison report stated that e-commerce has a share of 11% in the overall adex.

While the Madison report suggests that only 1 Start-up in its list of top 50 advertisers, compared to 9 last year, reconfirming the funding winter in the start-up ecosystem, Ashwin Padmanabhan, President of Investments, Trading, and Partnerships at GroupM believes that startups are poised to increase their advertising expenditures this year but in a more sustainable manner. “This will contribute to the expanding Indian advertising expenditure (adex), which experienced some stability in 2023 after fluctuating between highs and lows since 2020," he remarked.

Dentsu report stated that the travel and tourism sector recorded the highest growth of 73.4% in its advertising spends over 2022.

“Advertising spends in real estate grew by 41.7% in 2023 compared to 2022. Real estate dedicates 54% on television followed by 35% on digital media,” reported dentsu.

The dentsu report also shared that the automotive segment allocates around a third on digital media and print respectively. The consumer durables sector spends 44% on television and 32% on digital media. “The segments of media and entertainment, tourism, education, retail, and Government spend the majority of their advertising budget on print media, followed by digital media,” it added.

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