Automakers hit the gas: Festive ad spends likely to surge 25-30%
With a range of launches lined up for the festive season, the auto sector is revving up its marketing budgets for H2 ’25. According to industry experts, a minimum of 25-30% uptick in marketing spends is expected to happen across auto brands for the festive period this year. Festive season is considered one of the most crucial periods of the year in the auto industry. This sector traditionally witnesses a surge in sales, driven by factors such as auspicious buying, new launches, and lucrative offers. To capitalise on this opportunity, automakers are pulling out all stops to create a buzz around their products and entice potential customers.
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The upcoming festive season is expected to be particularly competitive, with a plethora of new models, including electric vehicles (EVs), set to hit the market. This increased competition is likely to fuel the rise in marketing expenditures. Vishal Chinchankar, CEO, Madison Digital & Madison Alpha said, “From an auto perspective, I am very bullish about EV as a segment, with all the new innovations that are coming in. It is actually really incentivising the consumer to purchase newer cars. I think that will sort of drive the festive season.”
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With the monsoon period having looked good for the auto sector so far, Chinchankar senses that there should be a spike in festive marketing spends of about minimum 25 to 30%. “There could be a big upside as well,” he added. Manav Sethi, Head of Media, Martech and Growth - VIDA, Hero Motocorp, echoes a similar opinion. He shared, “With a decent monsoon this year and a stable economic environment we expect a 20-25% incremental marketing budget for the festive season over last year.” Some factors like Tata Motors set to enter the mid-SUV category with a new launch, Hyundai Motor India preparing for potentially India’s largest IPO, Maruti Suzuki posting a 47% jump in net profits for the June quarter of 2024 is making the industry bullish about the auto sector’s outlook towards this year’s festive season. In a recent interview with exchange4media, Vivek Srivatsa, Chief Commercial Officer, Tata Passenger Electric Mobility, Tata.ev, said this year the festive season is going to be very busy for Tata Motors, as the brand is set to celebrate a number of milestones throughout the period. Be it Nixon hitting 7 lakh unit sales or having 2 million SUVs on Indian roads, the brand will be intensifying its marketing via consumer benefits this festive season. “We have a very big launch coming up. We are going to enter the largest category in the automotive industry where we were absent so far, which is the mid SUV category. And we have a very differentiated and disruptive product coming in. So that will form a big part of our marketing activities in the festival season. So a pretty busy season is coming ahead for us,” he said. Even in the luxury vehicles category, Mercedes Benz India is geared up for a range of launches. Lance Bennett, VP- Sales & Marketing, Mercedes-Benz India told us that the company is launching six new products, with three electric vehicles including the recently launched EQA. “We started early this year by launching a campaign focusing on 'Your Mercedes-Benz Your Way' with 'Wishbox.’ This campaign enables customers to opt for personalized ownership solutions and has been met with an extremely positive response. It’s created some solid momentum leading into the festive season,” he said. Bennett further shared that the company’s marketing focus in the coming months will be intensified, focusing on a broad range of media channels. According to TAM AdEx report on auto industry for 2023, on Digital, ad impressions for the Auto sector increased by almost 5 Times during Y 2023 over Y 2019. However, television ad volumes of the category declined by 18% in Y 2023 over Y 2019. Industry insiders hint that this trend might change, this year during the festive period. Even if it doesn’t entirely flip, traditional advertising is most likely set to witness a tad higher inclination by auto brands as compared to previous years. According to experts, this is because with new launches in store, the auto brands are aiming at a mass audience this time. For instance, Sethi mentioned, “VIDA has been a digital first brand and hence a major chunk of our media budgets is skewed towards that. But during the festive season, we intend to go deeper in masses and hence you would find us in traditional mediums also.” A spokesperson for another leading auto brand mentioned on the condition of anonymity that this year in fact, the TV-digital split for the brand would be 70-30, wherein TV would see a higher ad spending from their end. Chinchankar explained that auto thrives on bottom of the funnel, which is all about leads, walk-ins, test drives etc, which is an always on process and in fact the appetite will only go up during the festive season. However, he added that with the launches, traditional media also probably will see some amount of spike in spends. Basically, as the festive season approaches, the auto industry is undoubtedly in high gear, with marketing departments aiming to create campaigns that resonate with consumers and drive sales. With the EV segment adding a new dimension to the competitive landscape, the coming months for sure promise to be a thrilling period for both automakers and consumers alike.