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Report on Shemaroo

HUL marketing spends up in third quarter

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BENGALURU: Indian FMCG giant Hindustan Unilever Ltd (HUL) is one of the biggest advertisers in India. On Indian television, the company releases the highest number of advertisements by far according to Broadcast Audience Research Council of India (BARC) weekly data for top 10 advertisers across genre. According to BARC’s weekly data for calendar year 2017 (week 1 starting Saturday, 31 December 2016 to week 52 ending on Friday, 29 December 2017), the FMCG behemoth released a staggering 68,12,298 ad insertions. This number does not include the television insertions by Brooke Bond Lipton India Ltd (Lipton), Lakme Lever Ltd (Lakme) and Ponds India Ltd (Ponds).

Industry sources said that HUL had promoted its products quite aggressively in Q3 2018 by way of sops to the players across the sales and distribution chain as well as to consumers for some of its brands. In the current fiscal that started on 1 April 2017 (FY 2018) and will end on 31 March 2018, the company spent the highest amount as yet in the quarter ended 31 December 2017 (Q3 2018, quarter under review) towards advertisement and sales promotions at Rs 1,107 crore. In terms of percentage of total revenue also, HUL’s Q3 2018 ad and sales promotion spend works out to 12.66 percent, another peak for this year. HUL’s year-over-year (y-o-y) and quarter-on-quarter (q-o-q) spends towards advertisement and sales promotion in Q3 2018 increased 29.47 percent and 8.21 percent respectively.Please refer to the graph below for HUL’s ad and sales promotion spends during the last eight quarters.

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HUL was the top advertiser during all the 52 weeks of 2017 according to BARC data.Please refer to the graph below:

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It must be noted that BARC provides weekly data – BARC’s week commences on a Saturday and ends on the next Friday. Hence the quarterly TV insertions numbers mentioned above are approximate.

HUL’s Tea and beverages company Lipton was present among BARC’s top 10 advertisers across genre lists during 50 of the 52 weeks. In week 52 of 2017, Lipton had 32,049 ad insertions, the highest by it in the year, while in week 19 of 2017 it had 15,719 TV ad insertions, the lowest while it was present in BARC’s list of top 10 advertisers across genre. Lakme was present in BARC’s weekly lists for 3 weeks of 2017, while Ponds was present in the lists for 15 of the 52 weeks of 2017. Assuming that these three advertisers released 20 percent additional television advertisements during the year, the total number of TV insertions by HUL during the year works out to almost 82 lakhs.

HUL chairman Harish Manwani said: “We have delivered another strong performance in the quarter, with broad based growthacross categories and further improvement in margins. We remain positive about the mid-term outlook of the industry and willcontinue to invest strongly in our core brands and developing categories of the future. There are early signs of commodity costinflation and we will further sharpen our focus on cost effectiveness programs and manage our business dynamically forcompetitiveness and sustained profitability.”
 

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