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<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

India's top telcos <a href="http://www.businessinsider.in/Bharti-Airtel-to-acquire-Telenor-India/articleshow/57304886.cms">Airtel</a>, Vodafone and Idea , along with new entrant <keyword id="6354504" type="UNKNOWN" weightage="100" keywordseo="Reliance-Jio">Reliance Jio</keyword>, seem to have gotten inspired from the <a href="http://www.businessinsider.in/This-Indian-brand-will-overtake-FMCG-king-Hindustan-Unilever-by-2018-19/articleshow/58659311.cms">FMCG sector</a> to deal with the rising competition in the market. They have now decided to divide users into segments just like the FMCG industry, and come out with plans targeted at specific groups. Also read: <a href="http://www.businessinsider.in/Voda-Idea-merger-gave-India-Incs-MA-tally-a-fourfold-jump/articleshow/58163035.cms">Voda-Idea merger gave India Inc's M&amp;A tally a fourfold jump</a> The fierce competition is an outcome of Reliance Jio's entry offers launched in September 2016, under which it offered free voice and data services. This led to more than 100 million people subscribing to Jio in 170 days. This stirred up a sense of <a href="http://www.businessinsider.in/Airtel-Vodafone-India-and-Ideas-plea-against-Reliance-Jio-is-going-to-fall-flat-Heres-why/articleshow/57911417.cms">consolidation</a> amidst the incumbent companies. Experts say that the companies would now divide their users on parameters like usage and spending patterns, location, lifestyle and occupation, other than bifurcating them on the basis of age group and gender. This would help them understand the exact expectations of a group, following which they would be able to accordingly serve them plans. Earlier, they used to offer blanket discounts to all subscribers. Also read: <a href="http://www.businessinsider.in/Reliance-Jio-cries-cartelisation-by-Airtel-Vodafone-and-Idea-regulator-orders-probe/articleshow/58640026.cms">Reliance Jio cries cartelisation by Airtel, Vodafone and Idea; regulator orders probe</a> <keyword id="6354923" type="COMPANY" weightage="100" keywordseo="Vodafone-India">Vodafone India</keyword>, the second-largest telco in the country, has come with plans aimed at its young users, called Vodafone U as well as one aimed at farmers, called Vodafone Kisaan Mitr. While Vodafone U offers special friend-to-friend calling offers, data loans and special offers on brands like <a href="http://www.businessinsider.in/Amazons-Great-Indian-Sale-was-a-big-success-thanks-to-its-Prime-Members/articleshow/58686123.cms">Amazon</a> and <a href="http://www.businessinsider.in/Didi-has-secured-record-funding-and-Uber-should-be-worried/articleshow/58460084.cms">Uber</a>, Kisaan Mitr offers real time information on weather and market prices. These telcos are also said to be approaching residential welfare associations, schools and colleges to study their customers for the purpose of bifurcation. (Image source TopYaps)

Telcos to divide users into segments like FMCG companies

One of the strongest pillars of the <keyword id="6356076" type="UNKNOWN" weightage="20" keywordseo="indian-economy">Indian economy</keyword> - the Consumer industry - may not have shown exponential growth in the past 3-4 years, but this one has managed to keep itself insulated from the vagaries of the global macro-economic environment unlike few other vulnerable sectors. And guess who is watching this closely? It's the IIM and IIT students who have got their eyes on this sector. 
 Yes, despite the startup era, it's the <keyword id="34523" type="CITY" weightage="20" keywordseo="fmcg">FMCG</keyword> companies which are the top choice of these students even today. The Campus placement season has been seeing a promising response from this sector for years now. The sector has been stable, and in terms of salary, it hasn't dissapointed students at all. 
 
"Isn't it better to get a lesser package in a company/sector whicg guarantees job security than a one which gives more, except that it may ditch us even before we are to begin work with them," says an IIM-Calcutta student who recently picked up a 18,ooo lakh offer with a FMCG company of repute. 
 
Many B school students like him therefore have put their faith in the FMCG sector over any other offer that is coming their way. We spoke to two experts to understand this, and here are the reasons that have settled the recruitment game in the facour of the big daddies: 
 
What recent salary projections say 
 
“Even in the future, the sector is likely to be stable in terms of salary projections,” says Gaurav Gupta - Sr. Consultant, Rewards, Aon Hewitt. 
 
"With an uptake in consumer sentiments, we will see double digit growth in FMCG in the next 4-5 years. So, you can say that we are seeing a neutral to positive environment for this sector in the short to medium term. This is largely reflected in terms of the salary increases. FMCG was leading the pack in terms of salary increases unlike the service industries and financial institutions who are suffering as a result of the global economic turmoil," he said. 
 Notably, the <keyword id="1048517" type="ORGANIZATION" weightage="20" keywordseo="consumer-sector">consumer sector</keyword> overall has largely two sections - the foreign MNC firms and the Indian companies. For the foreign MNCs, Gaurav says, India has been a very lucrative destination. 
 
"It has been a investment destination which is seen as an engine for growth in future. Hence, you see them investing a lot in terms of their plants, production activities and hiring top talent from the market. That's why we have seen growth in salary increases by them. On the Indian side, the picture is very different. These companies have seen aggressive growth in their top line and market capitalisation. The talent catchment area has increased as they now have competitors operating even in local markets who are also hiring their employees. From that perspective, the large Indian companies in this sector are competing with these local businesses which may be strong in the area they operate, and therefore have been looking to bridge the gap in pay levels,” he says. 
 
Moreover, there has been critical focus on ring fencing of talent in this sector. This is because talent movement across sectors has been worrisome. A lot of service firms banking, telecom, insurance and e-commerce are hiring these talent. This is why consumer industry is trying to give higher increases and bringing in sincere key talent while also retaining existing ones. 
 
Attrition: 
 
Meanwhile, Gurdit, who is also Sr. Consultant, Rewards at Aon Hewitt, informed that even as the FMCG sector has traditionally seen lower attrition rates than India average (13.5- 14% over the last 5 years consistently against an India average in the 16-18% range, and on 13.7% currently), there has been no clear trend whether it has been increasing or decreasing. 
 
Key talent: 
 
Moreover, the key talent attrition is extremely low in this sector. In the last 4-5 years, it has been below 5% and this is both voluntary as well as involuntary. Notably, the way key talent is defined is it’s a combination of high performance, high potential as well as business critical skills which are difficult to find in the market. Typically organisations earmark about 10-15% of employee base as key talent, however, it varies with different organisations. Also, key talent is differentiated on a set of factors. 
 
Gurdit explains further: “Firstly, from salary increase perspective, what we found is that over the last 3-4 years the differentiation in the salary increases given out to key talent v/s an average performer has been increasing. This is not just in FMCG, but across sectors. However the amount of differentiation in the consumer space is slightly higher. The ratio of salary increases shows that a key talent employee would typically be paid 1.5-1.8 times higher of what an average performer would be paid. Now, if you keep aside the compensation increases, the other ways companies are differentiating key talent is - they take a call to benchmark key talent at a position slightly higher than others. From the perspective of non-monetary rewards, these employees get accelerated growth opportunities, better exposure to leadership, more meaningful roles and rotation of roles in order to develop their skills faster.” 
 
To this, Gaurav adds: “With regard to foreign MNCs, we have seen a lot of global mobility programs as well, especially for key talent.” 
 
Challenges: 
 
Meanwhile, citing a few challenges the sector faces, Gurdit says: “Traditionally FMCG is known to have the best talent in the market. Therefore, war for talent in this sector is pretty high. That's the reason why most FMCG companies will typically have really good policies and from total rewards perspective, they are well placed to retain best talent. However, one of the challenges is the new lot – startups - which is absorbing the best talent and paying high salaries. For this reason, FMCGs have started focusing on how to retain younger talent. Companies are bringing in programs to cater to the Gen Y employees, they are bringing in more flexibility work arrangements to take on this challenge.” 
 
Also, Gaurav points out that the emergence of tier 2-3 FMCG players pose a huge threat to the bigger players. They are locally strong and are pulling talent. FMCG industry may have to look at curbing this in future.

Here's why B-school students ultimately opt for FMCG companies over startups during placement season

The targeted turnover of <keyword id="6406649" type="COMPANY" weightage="100" keywordseo="Patanjali-Ayurved">Patanjali Ayurved</keyword> for this fiscal year was Rs 5,000 crore, and the staff is trying hard to help the company achieve the target. Even though the company was set up just about a decade ago, achieving Rs 5,000-crore turnover would not have been very difficult, given the increasing popularity of these products. 
 
Sources from ET tell that Patanjali’s <a href="http://www.businessinsider.in/The-rise-and-rise-of-Patanjali-is-leading-to-downgrade-of-Dabur-Nestle-Colgate-Palmolive/articleshow/51357206.cms">monthly sales in January and February</a> could have been around Rs 600-700 crore, meaning that <keyword id="6355107" type="PERSON" weightage="100" keywordseo="Baba-Ramdev">Baba Ramdev</keyword>'s brainchild could very well become a billion dollar entity before the end of fiscal 2017. 
 
This would make Patanjali the<a href="http://www.businessinsider.in/Business-by-chance-Decoding-Baba-Ramdevs-FMCG-Empire/articleshow/48775339.cms"> fifth largest FMCG company in India</a> after Hindustan Unilever, ITC, Nestle India and Britannia Industries, bringing it well ahead of other traditional FMCG players like Dabur, Godrej Consumer Products and Marico. 
 
This could have happened with Patanjali’s <a href="http://www.businessinsider.in/Baba-Ramdevs-Patanjali-Ayurved-Ltd-becomes-Indias-biggest-FMCG-advertiser-this-week-leaving-behind-Parle-Cadbury/articleshow/50876928.cms">extensive advertising campaigns</a> that with time, it could even reach Rs 10,000 crore mark. 
 
Because of the<a href="http://www.businessinsider.in/Baba-Ramdev-wants-shopkeepers-to-give-prominence-to-Patanjali-products-without-spending-a-penny-plays-swadeshi-plank/articleshow/51323889.cms"> Indian appeal</a> that these low-priced products carry, they are also a hit with the rural market, where other FMCG biggies could face a tough challenge from Patanjali's products. 
 
<a href="http://graceofindia.ca/wordpress/wp-content/uploads/2013/08/header-32.png">Image source</a>

​The Consumer’s God: Baba’s Patanjali to record $1bn sales next year

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.

You Searched For "fmcg companies" and got 5 results

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

BI India Partner

Telcos to divide users into segments like FMCG companies

BI India Bureau

Here's why B-school students ultimately opt for FMCG companies over startups during placement season

Anushree Singh

The Consumer’s God: Baba’s Patanjali to record $1bn sales next year

BI India Bureau

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

Anushree Singh

Popular Keywords

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You Searched For "fmcg companies" and got 5 results

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

BI India Partner

Telcos to divide users into segments like FMCG companies

BI India Bureau

Here's why B-school students ultimately opt for FMCG companies over startups during placement season

Anushree Singh

​The Consumer’s God: Baba’s Patanjali to record $1bn sales next year

BI India Bureau

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

Anushree Singh

Popular Keywords

Buying Guides

The Consumer’s God: Baba’s Patanjali to record $1bn sales next year