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<ul><li>Out-of-home to bounce back from COVID-19 slump with 9% annual growth</li><li>Total FMCG adspend to exceed 2019 levels of spending in 2023</li><li>China leads digital transformation with 71% of FMCG budgets spent digitally</li></ul>Zenith forecasts that fast-moving consumer goods (FMCG) food and drink brands will increase their ad expenditure on digital channels by 7% a year to 2023, according to its Business Intelligence – FMCG Food and Drink report, published today. That’s well ahead of the 4% annual growth forecasts for FMCG adspend as a whole in the 12 markets included in this report*. <keyword id="417653" type="COMPANY" weightage="20" keywordseo="FMCG-brands">FMCG brands</keyword> still rely heavily on traditional TV, spending 39% of their budgets on <keyword id="1376766" type="PERSON" weightage="20" keywordseo="Television-advertising">television advertising</keyword> in 2020, compared to 24% for the average brand. Excluding China, where FMCG brands have already adopted <keyword id="169310" type="PERSON" weightage="20" keywordseo="digital-advertising">digital advertising</keyword> as their main form of commercial communication, FMCG brands spent 52% of their budgets in television, compared to an average of 26%. Their principal goal is to maximise brand awareness and reach so they are front of mind at the point of purchase for as many consumers as possible. This is something that TV has historically excelled at, but its declining reach – particularly among the young – is making it less effective. FMCG brands are therefore following audiences to digital channels. Zenith forecasts that FMCG digital adspend will increase from US$12.3bn in 2020 to US$14.9bn in 2023, and that its market share will rise from 46% to 49%. After the pandemic gave FMCG ecommerce its urgent stimulus in 2020, brands will look to support and expand their ecommerce capabilities, channelling consumers to DTC operations or retail partnerships. But the big challenge will lie in using digital to replace television effectively – creating large-scale brand awareness while managing frequency. The rise of Subscription Video on Demand (SVOD), which locks away high-value audiences from direct advertising, will make this even harder, as will the end of third-party cookies. “FMCG brands need a new comprehensive approach to reach-based planning,” said Ben Lukawski, Global Chief Strategy Officer, Zenith. “That means combining TV, paid advertising in online video, virtual placement in SVOD platforms and perhaps even a presence in gaming, using first-party and second-party data to prevent duplication and optimise incremental reach.” Out-of-home is the exception to the declining reach of traditional media. As traffic returns to normal after the COVID-19 slump, the spread of digital displays will make it even more effective at reaching consumers with targeted and relevant ads near the point of sale. FMCG out-of-home advertising is forecast to grow by 9% a year from 2020 to 2023, while its market share rises from 6.1% to 7.0%, slightly ahead of its pre-pandemic share of 6.8% in 2019. FMCG adspend to track total market growth as it recovers from 11% slump in 2020 Ad expenditure by FMCG brands fell more sharply than the ad market as a whole in 2020, shrinking by 10.7% to US$26.7bn. This was not because of any shortfall in demand. On the contrary, demand soared as people stopped eating in restaurants, cafes and bars and shifted consumption to the home. Instead, FMCG companies were faced with the challenge of ramping up production while supply chains were disrupted, and using limited available distribution to get their products onto shelves in stores, or to consumers’ homes. Many FMCG companies therefore cut back on promotional activity for products they couldn’t get to consumers quickly enough to satisfy demand, and invested in distribution infrastructure instead, especially ecommerce operations and partnerships. Zenith forecasts that the recovery of FMCG adspend will roughly track the market as a whole in 2021-2023. A bounce-back is almost inevitable in 2021 given the comparison with the sharp drop-off in 2020, particularly during Q2, though it will still be 6% below 2019 levels. FMCG companies face uncertainty over how quickly consumers will return to shops, and how much their behaviours have been permanently affected by the pandemic. However, now that FMCG ecommerce infrastructure is being put in place, brands will need to increase their investment in advertising to support it. Zenith forecasts 4.4% annual growth in FMCG adspend between 2020 and 2023, reaching US$30.3bn in 2023. At this point it will have fully recovered from the pandemic-induced drop in adspend, exceeding 2019 levels of spending by US$0.5bn. India leads adspend growth but China leads digital transformation Zenith forecasts that India will be the fastest-growing market by some distance over the next three years, with FMCG adspend expanding by 14% a year. It will benefit from blossoming consumer demand as disposable incomes rise rapidly, coupled with the catch-up expansion of the underdeveloped ad market: advertising accounts for only 0.3% of India’s GDP, less than half of the global average of 0.7%. All of the other markets in the report are predicted to grow steadily at between 2% and 5% a year. Jai Lala, CEO, <keyword id="3929120" type="DOMAIN" weightage="20" keywordseo="zenith-india">Zenith India</keyword> said, “FMCG growth will continue to be robust considering various reasons. Firstly, despite the pandemic, it is one category where the demand is constant, if not seen increasing. Secondly, with evolving consumer demand, FMCG continues to see a slate of new product launches and category expansion. Lastly, with the vast population being in Tier 2 and rural areas - it is one untapped potential market where the FMCG brands continue to increase penetration.” China stands out as the market where brands have most rapidly embraced ecommerce and digital advertising. In 2020, Chinese FMCG brands spent 71% of their budgets on digital advertising, compared to 46% across all 12 markets. Here, these brands focus on online video, which has a high and broad reach, and is open to commercial partnerships. This can mean advertising in online shows, or special livestreams by influencers, in which viewers can directly purchase the items being demonstrated. They also routinely advertise on ecommerce platforms to drive sales at the point of purchase. Chinese FMCG brands spent 35% of their total budgets on online video and 13% on ecommerce advertising in 2020. “Ecommerce will be the key battleground for FMCG brand growth over the coming years,” said Jonathan Barnard, Head of Forecasting, Zenith. “Western brands should look to China for best practice in using digital communication to drive FMCG ecommerce sales.” *The 12 markets included in this report are Australia, Canada, China, France, Germany, India, Italy, Russia, Spain, Switzerland, the UK and the US, which between them account for 73% of total global adspend. FMCG food and drink includes all packaged foods and soft drinks.

India will be the fastest-growing advertising market over the next three years, with FMCG adspend expanding by 14% a year: Zenith Report

There is a new, shiny marketing trend in Indian FMCG industry. Be it a liquid soap or candies, facelift cream or premium biscuits, marketers are just adding 'gold' before or after the brand name, because of which consumers are attracted to it. 
 
Let alone the FMCG market, even the mobile phones that have 'gold' added to their names or the names of the colour variants, are a hit in the market. 
 
Take, for example, Colgate came out with a new toothbrush, priced it aggressively at Rs 77 per piece, and named it ‘360 Charcoal Gold Toothbrush’. The product was a hit in the market. The tagline, "Wake up to a gold morning... with the gold standard of whole mouth cleaning", hits at Indians’ undying love for gold, which contributed to its popularity. 
 
"The country is besotted with gold. That cuts across the literate and non-literate; it cuts across social, economic, political and religious divides," Harish Bijoor, brand consultant, told <a href="http://economictimes.indiatimes.com/industry/cons-products/fmcg/fmcgs-new-marketing-mantra-is-to-brand-products-gold-and-consumers-dont-seem-to-mind/articleshow/53292120.cms">ET</a>. 
 
Bijoor added that companies now shy away from using platinum and silver, having tried it in the past and failing. "Indians don't understand platinum. And silver remains a distant second to gold," he said. 
 
Some other products that have added ‘gold’ to their names are: Marico's Parachute Gold hair oil, Reckitt Benckiser's Dettol Gold liquid soap and bar soap, confectionery category leader Perfetti Van Melle's Alpenliebe gold candies, and Mondelez's premium biscuit Oreo's Golden Oreo variant. 
 
However, adding ‘gold’ to the name doesn’t always mean that pricing has to necessarily be aggressive since the metal is not always used in the products. Sometimes, companies just want to attract users by this name. 
 
However, every trend is ‘in’ for a limited period of time. Therefore, there are chances that companies might be overplaying with the gold thing. 
 "Marketers attach the gold name to brands to convey quality and premiumness but it needs to be done intelligently, linking it to a good, better, best in their portfolio. Otherwise it loses relevance as different marketers use the gold name for entry-level as well premium-quality products," says Devendra Chawla, group president, food FMCG and brands, <keyword id="44949" type="CITY" weightage="100" keywordseo="Future-group">Future Group</keyword>. 
 
It remains to be seen when the FMCG marketers realise this threat. 
 
<a href="https://mohitze.files.wordpress.com/2015/03/treasure_treasure_chest_euro.jpg">Image source</a>

Indians are so fond of gold that they don’t mind shelling extra money for FMCG products with ‘gold’ in their names

<ul><li><keyword id="8626530" type="UNKNOWN" weightage="20" keywordseo="raj-shamani">Raj Shamani</keyword>, Founder of <keyword id="10598902" type="UNKNOWN" weightage="20" keywordseo="shamani-industries">Shamani Industries</keyword> writes how <keyword id="618493" type="COMPANY" weightage="20" keywordseo="digital-marketing">digital marketing</keyword> will revolutionise FMCG this year. </li><li>He pens down a few trends that would dominate the FMCG market and shares how digital marketing enables the marketeers to show personalised ads to their right audience, grab their attention and hit the bullseye.</li></ul><cmsannotation type="cmsannotation" annotationid="1. Digital marketing will make ‘MORE’ the new normal" text="1. Digital marketing will make ‘MORE’ the new normal">1. Digital marketing will make ‘MORE’ the new normal</cmsannotation> Digital Marketing stands for more. More information, more options, more problems, more solutions. People can explore more options before buying something, find out more information about the company, match the price with its direct competitors, figure out more ways to get a simple product which was earlier bought from a small store near one’s house. In this world of more, customers want something more than just the product, because that’s one of the oldest and the best ways where Product A beats product B, by simply offering more. In the digital space, brands need to offer more than just the product like: free samples with the product or other kind of freebies or mini versions of products, discounts on birthdays/anniversaries, exclusive offers for regular buyers, a free product on the purchase of a particular amount , enhancing the user experience or gamifying the entire process of buying / interacting with the brand. Until one offers more, one is going to have a hard time winning the FMCG game in the digital age, because MORE is the new normal. <cmsannotation type="cmsannotation" annotationid="2. Digital Marketing will revolutionize Lead generation:" text="2. Digital Marketing will revolutionize Lead generation:">2. Digital Marketing will revolutionize Lead generation:</cmsannotation> Gone are the days when an individual had to travel to a different city or a town, enter a physical market to inquire, find and meet potential business distributors and take days of back and forth to finalize and finally start distribution of the products in the new city. The given pandemic has coerced everybody to realise that change is the only constant and in order to survive; the current age marketeers need to be “adept to adapt”. The novel Covid-19 virus has exponentially accelerated the trends of ordering food, apparel as well as banking online. The current work from home scenario only adds cherry to the cake. With the world being an “internet-village’, it is imperative for the new-age marketers to get away with the traditional theories of marketing and drink the elixir of today’s marketing era- Digital Marketing has the potential to revolutionize lead generation, introduce transparency, target the right audience at the right time and at the right time. Fortunately, people have started finding ways through digital platforms to hit the right people; eliminate the clutter and organize leads systematically. Lead generation through digital marketing is a blessing in disguise for small businesses who were not deeply pocketed because with just an ad on Facebook or Google with few thousand rupees; anyone can set up calls with hundreds of interested partners even from the remotest villages across the nation just by sitting at one place. Lead generation through digital is already transforming other industries, Moreover, it’s just a matter of time that it is going to revolutionize FMCG as well. <cmsannotation type="cmsannotation" annotationid="3. Digital marketing will make ‘ATTENTION’ the essential A:" text="3. Digital marketing will make ‘ATTENTION’ the essential A:">3. Digital marketing will make ‘ATTENTION’ the essential A:</cmsannotation> Till now B-schools, C level executives in the FMCG sector and other industry stalwarts have been vouching and betting heavily on three golden A’s of FMCG business: Availability, Awareness and Access. However, with the changing times and penetration of internet in our lives, ATTENTION is the new A and most importantly, a brand needs to comprehend that if one has the attention of a modern customer, one has won half the battle already. Because with the rise of global awareness, competition and available options, customers possess the attention of a butterfly and are adept to find their fit from the clutter of brands. Connecting with customers on a personal level, understanding their real as well as secret needs and providing a customer delight is the only way, a brand can stand out and create customer stickiness. Retaining a customer is always cheaper than acquiring a new one. Brands, retailers, marketers need to understand the real and the opportunity cost of losing a customer. One wrong move and your customer is using your competitor’s product. Effective digital marketing enables the marketeers to show personalised ads to their right audience, grab their attention and hit the bullseye!

How digital marketing will revolutionise FMCG brands in 2021

Kantar’s Managing Directors tell us why ‘Purpose’ is an important contributor to brand equity in India

<ul><li>The year 2020 was a roller coaster ride for businesses of all kinds and sizes and negatively impacted <keyword id="47276" type="PERSON" weightage="20" keywordseo="Economic-growth">economic growth</keyword> worldwide. </li><li>However, after June 2020, one industry that continued to see stable cash flow and income was FMCG. </li><li>In today’s feature, we speak to leading FMCG brands on their outlook for 2021 as we move forward. </li></ul>The pandemic has taught the brandverse to be prepared for the unexpected. Owing to the fear of contracting the virus by going out, brands had to rethink and realign their strategies to reach out to consumers in new ways. Online shopping platforms opened up their services to deliver 24*7 and people started hoarding daily essentials, including FMCG products. So, many FMCG brands partnered with e-commerce platforms like Dunzo, Flipkart, Grofers, BigBasket, etc to deliver within the comfort of consumers’ homes. Consumer habits also evolved with COVID and ‘immunity’ became the buzzword in the FMCG industry. Marketers reverted by launching ready-to-eat meal options and immunity-based packaged goods. However, with COVID vaccine now a reality, consumer sentiment is already picking up and the economy is in revival mode. Going by the latest reports, 2021 will augur well for small retailers leading to an increased sales from local markets and <keyword id="6513856" type="COMPANY" weightage="20" keywordseo="kirana-stores">kirana stores</keyword>. According to <keyword id="346535" type="COMPANY" weightage="20" keywordseo="Nielsen-India">Nielsen India</keyword>, after an unprecedented decline of -19% in the Jan-Mar quarter, FMCG industry displayed signs of recovery in Q3’20 with a 1.6% growth (versus Q3 ‘19). In 2020, rural markets outperformed urban India and became critical for FMCG giants. Brands relied on rural markets to drive growth during the trying times. FMCG witnessed a double digit growth of 10.6% in Q3’20 in Rural India, while the bigger cities (&gt;1 Lakh population including metros and Town Class 1) played catch-up. The rural markets bounced back in Q3 handsomely on the back of support provided by the government as well as good agriculture, reverse migration and a lower unemployment rate. With immunity being the focus in the ‘new normal’, new launches have been made in the health and hygiene basket including categories like hand sanitisers, floor cleaners, toilet cleaners, antiseptic liquids. These new launches contributed to 37% (in value) of all new launches in the COVID period (Nielsen India). According to Kantar Worldpane, FMCG sector in India is expected to report a 4-5% volume growth in FY21, driven by rural areas that are expected to grow two percentage points ahead of the urban regions that are hit harder by COVID-19 pandemic. While COVID-19 has curtailed economic growth in the FMCG sector, experts are now optimistic that the industry will see an appreciable improvement this year. Here are some of the trends they expect to see in 2021: R S Sodhi, MD, GCMMF (AMUL): <cmsannotation type="cmsannotation" annotationid="The biggest impact i" comment="inlineshare" text="The biggest impact in FMCG food is the shift among the consumers from loose and unbranded to trusting packed food and affordable brands in Tier II and III. There, people have come from loose to smaller packs and brands.">The biggest impact in FMCG food is the shift among the consumers from loose and unbranded to trusting packed food and affordable brands in Tier II and III. There, people have come from loose to smaller packs and brands.</cmsannotation> I don't think the demand in high end consumer products will grow as much now. There'll be a tremendous increase in demand for branded FMCG products that are affordable, available in smaller packs and mainly cater to Tier II III cities. For the past two years, at Amul, we have been trying to ensure we reach the towns that have over 10,000 population, which helps us cover the 15 to 20 bigger villages around those towns. Currently, we are working with 10,000 distributors. We have already covered 50% of these 10,000 population towns in India and in another one year, we'll cover all the towns. We're mainly investing in Tier II and III cities, opening our own branches and depots all over India. We recently opened a centre in Leh. Anil Viswanathan, senior director, marketing (chocolates), insights and analytics, <keyword id="2200852" type="COMPANY" weightage="20" keywordseo="Mondelez-India">Mondelez India</keyword>: The pandemic has accelerated the growth of snacking. As per Mondelēz International’s recently released second annual State of Snacking report, 9 in 10 Indian adults (88%) say they are snacking more or the same (22%) during the pandemic than before it, with millennials being especially likely to say they prefer snacks over meals (85%). A majority expect this trend to continue, saying they plan to continue eating small snacks throughout the day, as opposed to fewer large meals (82%), and that snacking will be part of their “new normal” even after the pandemic ends (81%). Ultimately, 8 in 10 believe “the current pandemic will have a long-term impact on how we consume snacks as a society” (81%). This unprecedented year has also brought about a significant behavioral change especially on how consumers are purchasing snacks. A majority say they have started to buy snacks online more often than they do in-store or offline (74%), with 8 in 10 planning to continue shopping for snacks online once the pandemic is over (81%). A similar percentage also say the pandemic has opened their eyes to so many more ways to get snacks than they knew existed before (80%), including half who have discovered snacks to try on social media (50%). It was also very heartening to note that, even while at home this year, Indians are social snackers. With health and safety continuing to be a priority, consumers are trying to strike a balance between indulging and being mindful (80%), and in doing so; they (80%) are relying on trusted snacking brands like Cadbury, OREO, and Bournvita, seeking assurance of safety and superior quality. At Mondelez India, we understand the role our products play in our consumers’ life and the aim is to leverage these trends to empower them with more choice, creating greater shopping opportunities and innovating, while keeping our promise of consumer-centricity intact, throughout our growth journey. Sudhir Langer, CEO, Raymond Consumer Care: Conscious Communication Today’s young ‘woke’ consumers were already moving away from the excesses of consumerism and leaning towards sustainable conscious brands before the pandemic and lockdowns hit their lives. The all-round strain of the pandemic from volatile job markets and a possible looming global recession to health and environment concerns; along with the way lockdowns were framed as health versus economy predicaments—as if one has to be sacrificed for the other—has left many questioning the very basis of our consumer-driven economy. I feel, the months in lockdown have only strengthened that introspection and has further fueled the young consumers’ move towards purpose and value, making them think-twice before buying by taking in to consideration the long-term impact of their spends not only on their finances, but on their own beliefs, on society and on the planet. So, with conscious consumption here to stay, when consumers buy, it is going to be as much for brand values as it is for product payoff. Keeping this in mind a big communication trend I see emerging as we move into 2021 is brands engaging more purposefully with deeper more sentient conversations. These could include brands talking about their environmental and sustainability efforts, community initiatives, health impact and most importantly value addition. Fortunately for us this is not a shift to adapt to; but a way of operating. We have always believed in empowering, enabling and operating consciously. Hence, it’s not only our communication like our recent Park Avenue Germ Protect soap film about our protagonist helping his community but at every level we are constantly taking steps to enhance efficiencies for a better world like our soon to be launched sustainable and eco-friendly packaging. Sumit Mathur, Director Marketing Kellogg South Asia: The pandemic is a black swan event that brought several changes at the economic and societal levels. Consumers had to face economic stress which made them more discretionary in their consumption choices. Our virtual connects with over 450 consumers amidst the lockdown made it clear that items which they do not deem to be too essential are unlikely to find a place in their shopping carts. Come 2021, only brands solving a real consumer problem or adding value to their lives will be on top of their minds. It has become increasingly important for brands to feel the pulse of the consumer and provide authentic solutions to stay relevant. Kellogg’s has paid attention to the consumer’s shifting needs and adapted with agility to ensure it solves consumers’ nutritional demands in the most convenient manner and this will continue to be our focus in the coming year.

FMCG: The trends to watch out for in 2021

The <keyword id="52356" type="UNKNOWN" weightage="80" keywordseo="Kumbh-Mela">Kumbh Mela</keyword> sees around 100 million people gathering over three months to celebrate the fact that Jupiter and the Sun have aligned themselves at certain positions. It undoubtedly creates a matchless opportunity for companies to showcase their brands. 
 While most of us who have not been to the Kumbh may not know about any of these, the ingenuity and expanse of these <keyword id="1925174" type="UNKNOWN" weightage="80" keywordseo="branding-campaigns">branding campaigns</keyword> would surely take you by surprise. Here’s a list of some of the craziest things companies did at the world's largest religious congregation. 
 
(Image credit: Indiatimes)

Top 10 crazy stuff companies do
at the Kumbh Mela

<ul><li>Globally, a third of FMCG businesses said their most successful influencer campaign increased sales by $250,000-$500,000.</li><li>Nearly half of fast-moving consumer goods (FMCG) companies will spend up to 50% of their marketing budget on <keyword id="3361533" type="PERSON" weightage="20" keywordseo="Social-Media-Influencers">social media influencers</keyword> post-COVID-19.</li><li>Less than a third of FMCG firms (27%) use third-party influencer verification services.</li></ul>According to a report released today by Duff &amp; Phelps and Kroll, 25% of companies have suffered a $100,000-$250,000 loss from a negative influencer experience. The Face Value Report highlights results of a survey of over 900 marketing and brand managers within the FMCG sector and provides insights into the value of <keyword id="2540701" type="PERSON" weightage="20" keywordseo="Influencer-marketing">influencer marketing</keyword>, as well as the financial and reputational impact of negative influencer experiences. Consumer devotion to digital devices during the pandemic has supercharged the influencer industry. During lockdown, two-thirds of <keyword id="84065" type="COMPANY" weightage="20" keywordseo="FMCG-companies">FMCG companies</keyword> have either maintained their influencer spending at pre-COVID-19 levels or increased it slightly, while nearly a fifth (19%) upped it significantly. By 2021, nearly half of FMCG companies (46%) expect to spend 31-50% of their total marketing budget on influencers—up one-fifth compared to the average spent between 2018-2020—while nearly one in 10 (8%)will spend more than 70%. Clear winners across countries emerge when comparing how much companies make from their influencer campaigns against what they spend running them. The average amount spent per influencer among FMCG companies globally is $22,151 per year. However, the UK spends on average $18,602 and boasts a high sales increase to expense ratio at 73%--comfortably above the ‘all countries’ average of 46%. FMCG companies will typically spread their spending across dozens of influencers; 45% of companies stated they usually work with 51-100 at a time, and this could rise as the influencer method of marketing becomes more entrenched. UK companies appear to use the fewest number of influencers than other countries at around 66, compared to the global average of 81. Michael Weaver, Managing Director Valuation Advisory Services at Duff &amp; Phelps, said, “Marketing teams once relied on securing the most expensive celebrity they could afford for a television campaign or billboard, but this strategy is increasingly obsolete in the digital age. FMCG companies are satisfied with the return on investment from influencers and are diverting marketing spend away from other traditional advertising and marketing tactics to keep the momentum going. We can’t deny that the lockdown and subsequent restriction measures have also played a part in boosting the industry. But regardless, we don’t expect influencer marketing to slow down post-COVID-19 either.” Influencer marketing also comes with certain risks—85% of FMCG companies have had their brand negatively impacted due to an association with an influencer, with almost a quarter (24%) of these companies claiming to have been adversely affected multiple times. Shockingly, 25% of FMCG companies report losses between $100,00-$250,000 from a negative influencer experience. The survey found that over two-thirds of FMCG companies (69%) had doubted an influencer’s follower count on one or multiple occasions compared to just a quarter (26%) who had never had any concerns. It is noteworthy that in the UK, where just over half of businesses (51%) had never had such doubts about followers, the use of third-party influencer verification specialists was among the highest at 32%, compared to the global average of 27%. Benedict Hamilton, Managing Director in Kroll’s Business Intelligence and Investigations practice, said, “Companies spend years creating brands built on trust and loyalty, characteristics which are hard-won but can be quickly lost, and are difficult to regain. When a negative incident with an influencer occurs, the reputational damage that follows can have long-term commercial impacts. Companies need to do their due diligence and not just take an influencer at “face value.” We are seeing increasing demand from brands to investigate influencers’ online activity and identify potentially sensitive issues, including those posted many years ago, to allow brands to establish whether or not an influencer’s values match their own, and ensure they are making informed decisions about their influencer programmes.”

85% FMCG companies have had a negative influencer experience but half of these companies will spend up to 50% of marketing budget on influencers post-COVID-19: Report

How the apt use of the digital medium has led online-based <a href="http://www.businessinsider.in/searchresult.cms?query=startups+">startups </a>to join the <a href="http://www.businessinsider.in/searchresult.cms?query=unicorn">unicorn </a>club in a matter of few years, has compelled the big daddy’s to rethink on the ways they have been communicating with their target markets in this digital age. 
 

	The age old <a href="http://www.businessinsider.in/searchresult.cms?query=FMCG+companies">FMCG companies</a> as a result, are increasingly shifting focus from traditional to <a href="http://www.businessinsider.in/searchresult.cms?query=digital+marketing">digital marketing</a> methods for bridging audience passion with business objectives more quickly and efficiently, in a bid to stay competitive in the market.
 <keyword id="34523" type="CITY" weightage="100" keywordseo="fmcg">FMCG</keyword> brands were traditionally built using mass TV advertising to establish brand identity and drive retail sales (supported by promotional marketing). However, digital platform has opened a whole arena for them to achieve multiple results: Improve consumer experiences, deliver location and contextually relevant information, deepen engagement, improve productivity and reduce costs, apart from increasing sales and enhancing brand identity. Notably, with the rising internet penetration and with 61% of global online consumers using the web to research their grocery shopping according to a Neilson study, opportunities for FMCG marketers on the digital platform lay galore. Many seem to have found their way into it already. Say for example Coca Cola. The company encouraged conversations to happen about their brand with a multi-channelled digitally focused ad campaign full of relevant, engaging and viral content. Another one is Cadbury's "Chocolate Charmer" online advertising campaign which provided ROI almost 4 times higher than their TV campaign. The chocolate brand ran a cross-media campaign for its Dairy Milk brand, covering TV, online ads and <keyword id="10879" type="CITY" weightage="100" keywordseo="YouTube">YouTube</keyword> promoted videos. Despite only investing 7% of its budget in online, the brand saw the sector generate 20% of the sales. 

	As digital is known to be the fastest-growing revenue stream in the retail industries, the need of the hour is for 4Ps of price, place, product and promotion to be put in the digital marketing context. “Companies are increasingly trying to redefine their strategy to this effect. Some of the things they do now are being able to deliver discounts and offers in real time direct to the consumer for immediate one-time redemption through retailers. This enables shopper centric utility delivering inspiration and information in the shopper journey. Moreover, the consumer engagement via digital marketing generates a huge amount of data providing insights into how consumers choose and buy products that are valuable for product development, the ongoing development of the consumer experience and in trading negotiations with retailers,” says consumer and retail expert, Akhil Bajaj.
 

	“Its ability to facilitate a two-way conversation also provides feedback on current products and services, enabling propositions to be adjusted and optimized on a continuous basis. It is possible to use the audience or just those who are passionate for R&amp;D purposes,” he says, adding that the potential of the digital medium over traditional methods proves that it is the way forward for FMCG companies in branding and marketing their products, a fact that they are fast realizing.
 

	Bharat Rajamani, Director, Digital &amp; Social Media Analytics at Ernst&amp;Young, meanwhile, feels FMCG have started integrating their print and TV communications on digital platform. “They are already seeking feedback on their TV campaigns, inviting suggestions to name their upcoming brands and even taking up social issues. The TVCs are played on the various social media platforms of the brand. The chances of them getting viral is extremely higher compared to a traditional media medium. This is a platform where the consumers become the brand advocates and promote the product for free,” he says.
 

	However, several experienced marketing professionals we spoke to, feel that the real challenge that poses FMCGs at this time is to craft a holistic marketing strategy. 
 

	“They need to think how to balance both - traditional and new media - to achieve the best results. Consumers increasingly have limited mental capacity and time, so brands need to earn their right to have a role in peoples' lives. It's important to create propositions which are broader than the core product essence, and distributed through a range of touch points," says Rajesh Singh, former senior marketing professional in Unilever with 15 years of experience in consumer goods.
 

	One example would be ice cream brand PaddlePop, which drove significant consideration and share in India through a brand landscape consisting of a multi-part movie on Cartoon Network, experiential roadshows, online games and conventional media.
 

	Rajesh feels apart from the web, mobiles are also a huge potential marketing platform that not many FMCG companies have been able to understand. 
 

	“As the sophistication of mobile devices improves, there is a huge opportunity for marketers to deliver compelling brand messaging where consumers are making their purchase decisions,” he says.
 On similar lines, Bharat says: “Digital and internet have a reach out to consumers who do not have access to TV, radio or the print medium but have a mobile phone especially in the Indian context. Looking at sources like Facebook, YouTube, Twitter, <keyword id="939877" type="COMPANY" weightage="100" keywordseo="Pinterest">Pinterest</keyword> and a lot more of such websites which potential customers use these days. As a result it has become indispensable for each and every company to have a presence on all these mediums.” 

	Interestingly, <a href="http://www.businessinsider.in/searchresult.cms?query=Wal-Mart">Wal-Mart</a> has an app that senses when customers enter a store and suggests switching their phone to "store mode." In this mode, shoppers can interact with special QR digital signage located throughout stores to access useful product information. <keyword id="46675" type="CITY" weightage="100" keywordseo="Wal-Mart">Wal-Mart</keyword>, in turn, is able to track their in-store behavior. If sales of a certain item are not performing, tracking can show whether customers are skipping the aisle entirely or looking at the product without buying it. This information enables store owners to make product placement or other adjustments. Impressively, customers who use the Wal-Mart app make two additional visits to the store each month and spend 40% more than those without apps.

How the advent of Digital age compelled FMCG companies to shift focus from traditional to digital marketing

<ul><li>Audio has undoubtedly played a critical role in the journey of so many brands over the years.</li><li>While it had lost a bit of its relevance with the advent of television, the increasing popularity of music and audio streaming apps are opening up new opportunities for brands.</li><li><keyword id="9987793" type="COMPANY" weightage="20" keywordseo="alexander-donics">Alexander Donics</keyword>, Category Development Officer, CPG, <keyword id="685487" type="COMPANY" weightage="20" keywordseo="Spotify">Spotify</keyword> talks to us about all that Spotify is doing to help brands engage with audiences in a highly effective way.</li></ul> From time immemorial, audio has been an important ally for brands in the process of brand-building. Back in the days of radio, many brands have been built through catchy jingles. Jingles played an important role even when television came about. Who can forget famous jingles like ‘Hamara Bajaj’ and ‘Washing Powder Nirma’ that made so many of these brands household names? However, with television sets entering most households, a lot of audio branding lost its relevance and we stopped seeing many memorable audio campaigns. Having said that, things are again changing now, thanks to more and more people beginning to use music streaming platforms. As more and more people are starting to use these platforms, advertisers are realizing these are great mediums to build a strong connection with an engaged set of audience. We’re today living in a time when increasingly consumers are connected to audio platforms, listening to music and podcasts, bringing with itself a huge opportunity for marketers. To understand how audio is increasingly playing an important role in consumers’ lives and how brands are using audio streaming platforms to make the best of these platforms, we spoke to Alexander Donics, Category Development Officer, CPG, Spotify. The evolving role of audio in marketing Audio has undoubtedly played a critical role in the journey of so many brands over the years. However, its role is constantly evolving. Brands are finding newer ways of reaching out to audiences. The lockdown also gave a unique opportunity to these platforms which witnessed a spike in listenership during the initial few months. Data from Kantar – VTION’s passive OTT Audio Audience Measurement service (an April report) stated that there had been a 42% increase (amongst consumers able to consume OTT/Streaming Audio platforms) in time spent on listening to OTT/ Streaming Audio apps owing to the fact that they were all house-bound. Consumers are always on the lookout for new engaging content and audio streaming platforms have done a good job in fulfilling this need. On how consumer needs have evolved over the years, Donics said, “Today, consumers are almost constantly connected to audio platforms, listening to music and podcasts throughout different moments of the day across many devices like smart speakers, cars and gaming consoles, offering them relief from the screen fatigue they experience. And this is particularly true amongst <keyword id="159493" type="PERSON" weightage="20" keywordseo="Gen-Z">Gen Z</keyword> and Millennials, who love platforms like Spotify that offer them a tremendous breadth of personalized content.” Brands have been quick to spot this new touchpoint that presents them an opportunity to connect with an engaged audience. He further explains, “This creates a relevant and huge opportunity for FMCG brands to reshape their approach. Streaming audio creates rich listening behavior insights--at Spotify we call it our Streaming Intelligence. Brands are able to leverage these unique insights to define where, when, and how to best reach and build relationships with their audiences in a high-engagement environment that drives results across the full <keyword id="7558706" type="UNKNOWN" weightage="20" keywordseo="Purchase-funnel">purchase funnel</keyword>.” Speaking about how the months of lockdown led to a shift in content consumption, Donics added, “Without a doubt, the past several months have driven a significant amount of change in the media landscape. Some of the more obvious changes Spotify saw as a result of the lockdown was a shift in how and when audio consumption was taking place. Commuting was for the most part put on hold - so understandably, listening in transit or within cars shifted to in-home environments and a wider-array of devices, such as smart speakers, connected TVs, and gaming consoles. And with that, we have seen a significant rise in co-listening - for example, families listening to music together. This is an interesting trend for brands to consider moving forward - how can they plan for the different contexts in which their consumers are listening? How does messaging need to evolve when you aren’t only speaking to the individual shopper, but also to their entire family?” He adds that Spotify monitors these signals and this helps them in continuously evaluating the content they curate on the platform. The new playlists and podcast recommendations that are powered by their algorithms all take this type of behavior into account. How brands are innovating Considering the spike in usage and the fact that more and more Indians are opening up to listening to non-music content on these platforms too, is giving brands a chance to innovate in terms of the way they are engaging with their audiences. When asked if brands have been innovating on its platform to communicate with its target audience, Donics said, “Absolutely - and I think there is an art and science to this as well. Brands are increasingly recognizing that not only can Spotify help illuminate new behavior, but that we also offer a really intimate messaging environment. Now more than ever, there is a need to go beyond standard brand-building approaches. We are seeing FMCG brands leveraging our platform to communicate messages of togetherness, recovery, and healing. For example, earlier in the year, Amstel created a playlist in Spain that sought to recreate the sounds of bars and restaurants.” “Everyone is trying to make sense of this “new normal”, and brands are turning to Spotify as a trusted partner in this effort. And that to me is one of the bright spots in all of this; marketers are showing they care. At its core, brand-building in the FMCG space is about consumer understanding and empathy. It is what attracted me to industry, and every marketer worth their salt will tell you that it all comes back to the consumer. But our ways of understanding the consumer need to evolve beyond traditional methods. That’s the promise of Spotify’s Streaming Intelligence, and given our understanding of context - the moments, moods, and mindsets our listeners are in - we can help brands tailor their messaging to ensure it resonates - while audiences come and stay on our platform to engage with an experience that is unmatched,” he added. Spotify’s advertising solutions Over the past few years, Spotify has been ensuring that it offers innovative solutions to brands to make the most of its platform. On what are some ways they’ve been helping brands tell their stories, Donics said, “While we are an ‘audio-first’ platform, we have a range of solutions for brands to take advantage of, both in formats and channels. We have seen a number of traditionally video-driven advertisers ramp up their streaming audio investments as they seek to connect with consumers in an uncluttered environment. We have also seen video advertisers extend their video campaigns through our Sponsored Sessions ad experience given the incrementality of our reach. Driven by the need for greater precision and flexibility, we have seen a significant share of our FMCG advertisers choose to activate via our programmatic channels.” Brands have also increasingly started looking at podcasts as an effective way of reaching out to people. Having recognized this opportunity pretty early, Spotify is also encouraging brands to use it as a tool. “Finally, FMCG brands are leaning heavily and quite quickly into podcasts. This is a particularly exciting trend for us given our well-known investments in the industry, and brands can no longer ignore the amount of time spent and engagement their consumers have with this format. We were excited to have P&amp;G’s Dawn and Tide come on board as the sponsors of The Michelle Obama Podcast in the U.S. Watch this space, this will be a very important medium for FMCG brands moving forward,” he added. The importance of measurement While more and more marketers are now opening up to experimenting with platforms like Spotify, many of them still question the effectiveness of the campaigns and the ROI it gets them. On how Spotify is making it easier for brands to measure effectiveness on its platform and therefore helping create brand value, Donics said, “While Spotify has a unique cultural appeal, we recognize that FMCG brands are seeking proof of performance to justify their media investments. Because of this, we have a number of third-party measurement partnerships with the world’s leading measurement firms including Nielsen and ComScore to ensure that we can gauge our effectiveness across a spectrum that we refer to as Reach, Resonance, and Reaction, and we have a team dedicated to not only managing measurement on behalf of our FMCG brand partners, but also helping to interpret the results in the context of the streaming space. This is a big part of how we prove our value to marketers: we don’t want to be just another part of the media plan, we want to be trusted business partners that help create brand value.”

How Spotify is ensuring brands can make the most of its advertising offerings

<ul><li><keyword id="9064221" type="COMPANY" weightage="20" keywordseo="ad-volumes">Ad Volumes</keyword> for Jan-Feb 2021 are the highest since 2017.</li><li>FMCG &amp; ECOM categories grew by 36% &amp; 21% respectively during this period compared to 2020.</li><li>Brands like Whitehat Jr., Harpic Power Plus and Vaseline Intensive Care, are the new entrants in this period in 2021.</li></ul>“Continuing the momentum built in H2 of 2020, <keyword id="9063979" type="UNKNOWN" weightage="20" keywordseo="TV-ad-volumes">TV Ad Volumes</keyword> have had the most promising start with January &amp; February Ad Volume levels of 2021 being the highest ever in 5 years. A lot of sectors/categories, and key non-FMCG brands, also seem to have increased their presence on TV during this period which augurs well for the medium.” said, Aaditya Pathak, Head – Client Partnership &amp; Revenue Function, <keyword id="2801660" type="COMPANY" weightage="20" keywordseo="BARC-India">BARC India</keyword> Advertising revival has evidently seeped into Jan-Feb 2021, catapulting Ad Volumes, at the start of the year, by 21%, thus making it the highest since 2017. Among the Top genres, Movies &amp; Music + Youth registered higher growth than the average growth in Overall Ad Volumes (25% &amp; 24% respectively), followed by GEC &amp; News with 21% &amp; 18% growth respectively, during Jan-Feb 2021 over the same period in 2020. While the Top 10 Advertisers drove the TV Ad Volumes with 45% contribution and 35% growth, the next 40 Advertisers rode alongside, garnering 25% growth during Jan-Feb this year. 2020 witnessed new entrants in <keyword id="407416" type="PERSON" weightage="20" keywordseo="TV-advertising">TV Advertising</keyword> and the rise of the Advertisers in Digital segment, especially the ECOM category. This phenomenon holds true for the current period in consideration as well. ECOM grew by 21% in Jan-Feb 2021, showing a consistent growth YOY in TV Advertising. Other Categories like Retail and Building, Industry &amp; Land Materials, are increasing spends this year, compared to 2020. While brands like Lizol, Dettol &amp; Harpic emerged as the most advertised brands during Jan-Feb 2021, many Non-FMCG Brands have also increased their presence on TV during this period. TV Advertising has set the bar high for the year that remains. The upcoming big National and International Events are likely to keep TV as the platform of choice for advertisers in reaching out to the millions of homes across India.

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