: Rising audiences and investment in e-commerce to drive 7% annual growth in FMCG digital ad spend: Zenith FMCG ad spend report #IndiaNEWS #Report Zenith forecasts that FMCG digital ad spend will increase

Rising audiences and investment in e-commerce to drive 7% annual growth in FMCG digital ad spend: Zenith FMCG ad spend report #IndiaNEWS #Report
Zenith forecasts that FMCG digital ad spend will increase from US. 3bn in 2020 to US. 9bn in 2023 and that its market share will rise from 46% to 49%.

Zenith forecasts that fast-moving consumer goods (FMCG) food and drink brands will increase their ad spend 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 ad spend as a whole in the 12 markets included in this report.

FMCG brands still rely heavily on traditional TV, spending 39% of their budgets on television advertising in 2020, compared to 24% for the average brand. Excluding China, where FMCG brands have already adopted digital advertising 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 ad spend will increase from US. 3bn in 2020 to US. 9bn in 2023 and that its market share will rise from 46% to 49%. After the pandemic gave FMCG e-commerce its urgent stimulus in 2020, brands will look to support and expand their eCommerce capabilities, channeling 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 optimize 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.