Where does IPL fit in FMCG advertising?, ET BrandEquity

Representative imageFMCG companies in India have recently reduced advertising expenditures due to rising input costs and a slowdown in consumer demand. Major players like Hindustan Unilever (HUL), Dabur, and Colgate-Palmolive reported declines in ad spending for the quarter ending December 31, 2024, while brands like Marico, Godrej Consumer Products, and Emami saw increases.

Despite this overall decrease, experts predict IPL 2025 will remain a major focus for FMCG brands. While total spending may not reach previous levels, the IPL’s scale and reach make it a crucial advertising platform. Industry insiders anticipate ad spending will rebound in the April-June (AMJ) quarter as inflationary pressures ease and consumer demand recovers.

Advertisers’ interest in IPL

Mayank Shah, Vice President of Parle, attributed the reduced ad spending to rising commodity prices compressing FMCG margins, forcing brands to prioritize profitability. He explained that price hikes were insufficient to offset input cost inflation, leading to margin compression. “A 15-17% increase was needed, but smaller adjustments led to margin compression. Sustained high advertising would have severely impacted profits, explaining the limited or negative FMCG advertising growth last quarter,” Shah stated.

Speaking about the spends on IPL, Shah anticipates inflation to cool down, boosting advertising with major events. However, this depends on inflation easing. “Without it, growth will be limited. While events IPL will drive some advertising, it might not reach last year’s levels due to ongoing inflationary pressures. Brands want to advertise, but profitability is a hurdle. If inflation is controlled, as expected, advertising will increase during these events. Otherwise, growth will be constrained,” Shah said. He also expects ad spending to increase in the AMJ quarter.

In Q3, HUL’s advertising spend dropped 8% year-on-year to Rs 1,466 crore, following a 15% reduction in the previous quarter. Dabur’s ad spending decreased by 7.3% to Rs 226.7 crore, while Colgate-Palmolive’s Indian operations saw a 2% dip to Rs 1,452 crore. This reduction in ad budgets is largely attributed to inflationary pressures on essential commodities, squeezing profit margins across the FMCG sector. However, some brands, like Marico, bucked the trend, with advertising spend rising by 19.1% to Rs 293 crore. Godrej Consumer Products and Emami also saw a 6% increase in their ad budgets.

Shah also noted that reduced ad spending from FMCG impacts various genres, including GECs, sports, music, and news. “Companies are cutting spending across the board due to bottom-line pressure. It’s not a selective reduction,” he added.

Another anonymous advertiser shared that while a market slowdown exists, IPL remains a critical platform. Brands launching new communications or announcements during IPL will consider it or similar high-impact properties. “This is driven by the need for accelerated reach and awareness. IPL serves as a launchpad for mass FMCG brands. Therefore, if a brand needs that level of accelerated reach, IPL is a viable platform,” they said.

As reported by ETBrandEquity, IPL 18 ad rates have increased by 18-20%. Industry sources indicate a 10-second slot costs INR 18-19 lakh on traditional TV, INR 8-9 lakh on Connected TV (CTV), and INR 340 CPM for mobile ads.

Advertisers ETBrandEquity spoke with confirmed these higher rates are delaying deal finalizations. Many are still negotiating. One advertiser stated, “The ad rates are undeniably high. To justify such increases, broadcasters must deliver substantial added value, including larger viewership, enhanced engagement, and precise measurement. If the efficient reach isn’t achieved, the cost doesn’t justify the investment. If rates become too exorbitant, advertisers will rethink their spending decisions.”

Slowdown & IPL

Ashwin Padmanabhan, COO of GroupM South Asia, noted that brands heavily investing in IPL often dedicate a significant portion of their budgets to these events. “Brands heavily advertising on properties like IPL are often a unique set. These big spenders on IPL don’t typically advertise year-round. They concentrate their marketing budgets on a few key sports properties,” Padmanabhan stated. For instance, 80% of their budget may go to the IPL. While advertising continues across other channels, growth-phase brands use IPL to quickly reach a massive audience.

Padmanabhan also highlighted broader challenges facing the CPG sector, including urban consumption slowdown and rising material costs. Despite this, he anticipates increased disposable income will spur demand and lead to advertising growth, expected to rise from 5% in the first half to 9% in the second. While a rebound may not be immediate, Padmanabhan expects more positive momentum after June.

Media planners expect IPL 2025 to remain a significant investment for FMCG brands, albeit with a more cautious approach. Trishul Bhumkar, Managing Partner at Zenith India, noted “green shoots” in urban consumption, suggesting a positive outlook for Q1 FY26. “CPG brands will definitely gravitate towards participating in IPL on digital platforms. As the first quarter of the fiscal year and a key season for some categories, CPG will capitalize on IPL as an opportunity,” Bhumkar said.

He also noted that non-IPL cricket/sports will take a cautious approach, especially during the Asia Cup. “In any form, cricket remains the safest way to create impact in media campaigns,” he added. He also said that interest in the IPL this year is high; however, the actual scale of participation remains to be seen. Additionally, several bilateral series are planned post-IPL, so these will also be actively considered. “It is also encouraging to see increased brand

participation in women’s cricket, whether through on-air or on-ground presence, team sponsorships, or brand endorsements,” said Bhumkar.

IPL/Cricket: Essential for brand reach

The broadcaster is already seeing a surge in demand for IPL 2025 advertising slots, especially from FMCG brands. A source close to the development pointed out that the IPL’s ability to offer innovative ad solutions—especially for premium audiences—has driven increased interest from FMCG advertisers. “This year, JioStar is offering targeted advertising for high-income consumers, including premium digital users on iOS, Android, and CTV platforms. This move aligns with the growing focus on premiumisation in the FMCG sector,” said the source.

Furthermore, sources indicated that JioStar’s partnership with Nielsen, aimed at providing accurate audience measurement, is expected to unlock additional FMCG budgets for IPL 2025.

With projections of exceeding last year’s record reach, experts anticipate IPL 2025 will continue to attract FMCG brands seeking rapid mass reach and high engagement. “The massive scale and reach of the event, combined with targeted advertising opportunities, make it an essential platform for brands aiming to make a big impact,” said the source.

According to Deleise Ross, Senior VP, Mudramax, sporting events bring high reach and help FMCG brands engage with a large set of audience. If there are new communications or offerings which brands want to amplify they will definitely use this platform for quick reach and high impact.

“Also, for larger FMCG brands they measure the ROI as well which helps them quantify the money invested, this ensures they block monies effectively for such associations.

Most brands have fresh money beginning from April; thus, the lull may be short lived. Also, festive is a window where most brands have highest sales and by that period brands will increase their spending intensity,” said Ross.

• Published On Mar 4, 2025 at 08:29 AM IST

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