Digital AdEx of FMCG matches TV, powered by growth factors

In five years, FMCG's digital advertising expenditure share skyrocketed from 27% to 47%, a notable shift highlighted in the dentsu-e4m Digital Advertising Report 2024

Feb 12, 2024 - 11:37

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Digital AdEx of FMCG matches TV, powered by growth factors

In a significant transformation, the fast-moving consumer goods (FMCG) sector has experienced a balance between digital and TV advertising expenditures, both comprising 47% of the total media spends, as per the latest findings from the dentsu e4m Digital Advertising Report.

This equilibrium signifies a shift in the FMCG industry's advertising landscape, where traditional TV advertising now coexists with digital platforms, reflecting the changing dynamics within the sector.

The FMCG industry's digital AdEx share has seen remarkable growth, rising from 21% in 2020 to 47% in 2023, according to successive dentsu reports. In 2023, FMCG remained the highest spender, contributing Rs 31,428 crore to the total ad spends, constituting nearly one-third of the Indian digital media industry's ad revenue.

As consumer behavior increasingly embraces online channels, FMCG companies are adapting their marketing strategies, heavily investing in digital advertising to engage with their target audiences across various online platforms.

The shift in advertising spend share is attributed to advancements in digital infrastructure, fostering growth in segments like OTT, e-commerce, online payments, social media, gaming, and esports applications, establishing digital media as the most accessed and trusted medium among consumers.

Abheek Biswas, AVP, Consumer Insights at dentsu India, notes, "FMCG’s increased spending on digital media reflects a shift in consumer behavior towards online channels, and the budget allocation indicates a recognition by FMCG brands of diversifying their advertising approach."

The dentsu e4m report highlights that digital media witnessed the fastest growth rate of 36.6% over 2022 and is projected to achieve a 50% contribution to the Indian advertising market by the end of 2024.

Key insights reveal that the FMCG sector's digital media spending is predominantly driven by online video (44%), followed by social media (25%) and paid search (13%). This departure from the general pattern underscores FMCG's strategic adaptation to consumer preferences for visual content consumption.

The surge in online video investment aligns with India's impressive 6.1 trillion minutes of video consumption, with YouTube dominating the market (88%), according to a report by Media Partners Asia (MPA).

Here's a snapshot of FMCG digital media spends over the past five years: