Alpana Parida

How much should you spend on advertising?

5 Jun 20195 min readAlpana Parida

How much should you spend on advertising?



I spent the whole day yesterday, as jury for an international award in advertising. We were judging entries from across the world, for over 12-15 categories. Almost 65-70 entries. The criteria for ALL the categories was primarily originality of idea and quality of craft, execution etc. THERE WAS NO METRIC FOR IMPACT. None whatsoever.

About the time I graduated from business school in 1985, we were told that the most loyal customer in the world was the Colgate Dental Cream customer. This was a simpler world of low clutter – both on shelves and in media, and the more you advertised, the more you sold. Today Colgate has over 10 variants and the consumer is navigating choice in more complex ways.

Today, all media is highly cluttered and to ensure TOM recall / awareness (top of mind), advertisers create more and more unique and standout advertising. It is storytelling and/or craft at its best. Good commercials often have budgets rivalling the making of a feature film. But this search for unique and standout stories is often very far from the brand and its values. It can be a great idea – but if the only visual memory of the brand is the final frame of the brand name, how exactly does the brand benefitWe have conducted studies where respondents recall the ad frame by frame, but are unable to name the brand correctly. Not just the brand – but even the category!

On the other side, shelves have got highly cluttered. In the India of the 80s, haircare had 2 categories – shampoos and hair oils (conditioners were just around the corner) and 3-4 major brands. Today, haircare has exploded with multiple categories from hair serums to revitalizers, hair gels to hair colour. Each of those categories has many brands. Each brand has many variants. Each variant is across different formats and sizes. Thus explosion of categories, brands, variants, and SKUs are jostling for attention while for a large part of the Indian trade, shelf sizes have remained the same! The battle for market share has shifted to the shelf as more and more consumers are making decisions at the shelf.

If brands saved their advertising money and invested in packaging (Read our Packaging case study) and retail presence, they would see a far greater impact on market shares.

The clutter in media, technologies that allow you to skip advertising altogether, the award focused story telling are all leading us to one conclusion – slash that advertising budget! A decade ago, as the CMO of India’s largest jewellery brand Tanishq, I worked on an advertising budget that was exactly halved. That year, we grew 30% in volume terms – simply by doing many more activities in our retail stores, spending more on catalogues and ensuring in-store selection of products through digital interfaces – and having money left over.

It used to be said that “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Today that should read “90% of my advertising money is wasted.”

There is tremendous pressure on marketers to advertise. The push of decades of convention, the pull of advertising clubs and awards – both national and international, the parties that are hot and happening – have all created a sense that it is indispensable. Well, it is not. About three decades ago, a book called ‘Maxi-marketing’ was doing the buzz. 360 degree marketing is bandied around often times. But marketers seldom spend enough on other initiatives and advertising often eats into over 80% of their marketing budgets.

I am not proposing killing advertising altogether. Simply putting it in its place. And bringing much more engagement not before purchase (the only place where advertising sits) – but during purchase, after purchase, during use and after use. So maybe the 80:20 divide between advertising v/s rest of initiatives should be 40:60 with majority of the budgets spent on consumer interactions, sampling, retail presence, digital engagement and much more.
Any brave marketers out there?