Gloom lifts, India Inc ready: Consumer cos step up festive ad spends after slow H1; expect 15–20% jump

Economic Times

5 days ago

iStock India Inc FY25 sales (Image for representation)
Companies across consumer sectors are readying to loosen their purse strings to step up advertising during the upcoming festive season, with ad spends expected to increase 15-20% year-on-year according to industry executives, after having curtailed spending in the first half of 2025 on account of geopolitical issues, including the India-Pakistan conflict, and a rain-soaked summer. Media buyers said companies from the personal care, food, automobiles, retail, electronics, hospitality and real estate sectors have taken the lead in booking advertising slots. Beverage maker Coca-Cola's global chief executive James Quincey said on an investor call earlier this week, "In India, after a strong start to the year, volume declined as our business was impacted by early monsoons and geopolitical conflict in the important summer season. In response, Coca-Cola is developing more granular, execution strategies... tailored to festivals and regional needs," he said. Discretionary sectors, which saw subdued sales growth of 4-5% in the past 12 months owing to a combination of factors, are pinning hopes on the next five months for momentum to pick up, hoping that the income tax relief on salaries of up to ₹12 lakh annually, favourable monsoon, easing of some commodity inflation and stability in geopolitical sentiment could bring back demand.
"While the auto industry has faced subdued demand, we expect good revival in the coming months backed by favourable monsoon and upcoming festive season starting with Onam from August. We will enhance our marketing campaigns and introduce product updates to catch this uptick in buying season," said Kunal Behl, vice president, marketing and sales, Honda Cars India.
The festive season, comprising a series of festivals in different parts of the country, from Raksha Bandhan and Janmashtami in August to Dussehra and Diwali in October and Christmas in December, is traditionally associated with an uptick in spending and provides businesses an opportunity to push sales on these auspicious occasions.
'Companies that had held back ad budgets so far this year, are expectedly ploughing them back into the next two quarters, hoping for demand recovery in the second half of the year,' said Shashi Sinha, chairman at media planning and buying firm IPG Mediabrands, which represents companies such as ITC, Mahindra Group and PhonePe digital wallet app.
Car and two-wheeler sales in India, the world's third largest automobile market, slipped in the June quarter, snapping a four-year growth streak. 'But a busy pipeline of new model launches in the run-up to the festive season and a weak demand is prompting auto companies to jack up advertising, marketing and sales promotion spend,' an executive at a large passenger vehicle maker said on condition of anonymity. 'Automakers are leveraging digital-first strategies to drive festive demand and clear elevated inventory levels.'
Summer-centric companies such as those making cold beverages, air-conditioners, ice-cream and refrigerators, in particular, were caught off guard in the crucial April-June quarter, which contributes more than half to their annual sales, on account of consistent unseasonal rains. Many such companies, which had stalled launches during the season and hence ad and marketing spends, are now reviving their plans, supported by an advertising push. 'With the festive season bringing a wave of optimism and increased consumer spending, we will now introduce Jumpin's ready-to-drink portfolio, to capitalise on the favourable environment,' said Piruz Khambatta, group chairman of concentrate mix and fruit drinks maker Rasna. The company had acquired Jumpin from Hershey's India this year in peak summer in May for a valuation of an estimated Rs 350 crore. 'Given how much hinges on the festive quarters this year, we are seeing advertising focusing on exchange schemes and financing offers for additional incentives to urge consumers to spend, instead of routine seasonal festive campaigns that usually focus on launches and new collections,' said an executive at a creative agency, which is currently creating such advertising for two large brands. 'This is happening across sectors, whether it's jewellery, phones, electronics or cars.' A report by Sam Balsara-owned Madison Advertising, along with Pitch, forecasted that India's advertising expenditure would increase 11% year-on-year to Rs 1,19,857 crore in 2025. The report referred to 'positive market sentiment following the budget as a key driver for recovery'.