FMCG spends highest on digital video advertising

Published: January 23, 2019 12:58:21 AM

Within digital media, digital video is expected to have the fastest growth, with a CAGR of 37%; it is likely to reach Rs 5,545 crore by 2021.

FMCG spends highest on digital video advertising

By Sonam Saini

As the consumption of content in India moves towards digital formats, the improvement in bandwidth and cheaper data plans have led to higher investment in digital videos. In terms of digital media affinity, FMCG as a category shows the strongest tilt towards video, spending 33% of their digital budget on it — incidentally, the largest percentage for video among all other advertising categories, according to the recently released DAN Digital Report 2019. Furthermore, FMCG brands spend 28% of their digital budgets on social media and 24% on display.

Not surprisingly, e-commerce spends the largest share on search advertising (43% of its digital budget), closely followed by the BFSI sector (at 38%).

Within digital media, digital video is expected to have the fastest growth, with a CAGR of 37%; it is likely to reach Rs 5,545 crore by 2021. Digital video will be very closely followed by display, which is expected to grow with a CAGR of 36% to reach `5,769 crore by 2021.

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FMCG is known for heavy spends on TV; its digital ambitions are quite interesting from that perspective, feel experts. Consider Parle Products: its strategy for video advertising depends on the objective of the brand, communication and target group, after which it decides whether to opt for static advertising or videos. “If we are targeting the younger generation, then it will be Instagram and Snapchat, whereas for the middle-aged audience, we will probably look at Facebook,” shares Mayank Shah, category head, Parle Products. The company spends 15% of its marketing budget on digital media, of which 10% goes to digital video.

On the other hand, Unibic Foods, which launched in 2004 in the biscuits and cookies category, spends 10% of its budget on digital, of which half goes to digital video. Aarti Iyer, marketing head, Unibic Foods, said that the brand initially turned to social media for all its advertising needs.

“People don’t come online to do research for our category, unlike automobile or consumer goods,” she notes. Unibic uses digital as a brand advertising medium and is now following its audiences’ preference for video content.

“We are not a million-dollar company but we are growing,” Iyer continues. “However, that means we have to do things in media in a smarter way. Considering this, we look into OTT platforms as well, where we have the opportunity to connect with the buyer that matches the mindset we are looking for.” What about digital video giant YouTube then? “YouTube is like an ocean and a brand could get lost there,” Iyer opines. “We do spend on Facebook though.”

A relatively new online-only product in the menstrual hygiene market, Carmesi, has been spending on digital creatives, sponsored ads and is now even experimenting with videos. Tanvi Johri co-founder, Carmesi, says, “Video is a very recent experiment and customers react to videos differently. For us, YouTube videos lead to organic customer building that might not lead to conversions/sales right away but it helps us in positioning our brand image and product USP. This could later lead to purchases.”

The debate of ROI on digital, however, is a long one as different companies have different expectation from the medium. Shah shares, “How should one calculate ROI on digital? It’s not a traditional advertising medium and one can’t use digital as a substitute for television.” However, if the objective is to garner awareness, it can be measured by the number of views/clicks that the brand receives. If you are doing it right, the medium can prove beneficial, Shah concludes.

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