Fast moving consumer goods companies increased their ad spend by a marginal 2.3 per cent in 2002-03, as compared to a 14.15 per cent rise in 2001-02.

Incidentally, FMCG firms have been reporting single digit revenue growth for the last five consecutive years. This has forced most companies to take a relook their ad spends and branding strategies.

In fact, though the advertisement expenses-to-sales ratio moved up marginally from 5.99 per cent in 2001-02 to 6.01 per cent in 2002-03, it did not translate into higher sales growth, which at 1.8 per cent in 2002-03 is the lowest in five years.

A study of 15 major FMCG companies, manufacturing food and personal care products, shows they spent on an aggregate Rs 2,234.37 crore (Rs 22.343 billion) on advertisements and related promotional activities in 2002-03.

This is just 2.3 per cent higher than the Rs 2,184.40 crore (Rs 21.844 billion) spent in 2001-02.

FMCG sales grew at their lowest-ever pace of 1.8 per cent last fiscal, as compared with 2.62 per cent in 2001-02, 4.13 per cent in 2000-01, and 8.8 per cent in 1999-00.

FMCG giant Hindustan Lever topped the league in terms of total ad spend with an annual expenditure of Rs 841.86 crore (Rs 8.418 billion) in 2002-03. In 2001-02, HLL's ad spend had increased by 18.3 per cent.

ITC ranked second with an ad spend of Rs 219.69 crore (Rs 2.196 billion). The company reported a 22 per cent growth from Rs 180.09 crore (Rs 1.80 billion) in 2001-02 to Rs 219.69 crore in 2002-03.

Colgate-Palmolive claimed the third spot. The company spent a large portion of its revenue on advertisements, though total ad spend slipped 20 per cent from Rs 231 crore (Rs 2.31 billion) in 2001-02 to Rs 184.82 crore (Rs 1.848 billion) in 2002-03.

In 2002-03, Colgate spent 17.49 per cent of its sales revenue on this account, down from 19.9 per cent in 2001-02.

Other firms followed with Dabur at Rs 159.97 crore (Rs 1.599 billion), Nestle India at Rs 150.71 crore (Rs 1.507 billion), Reckitt Benckiser at Rs 100.33 crore (Rs 1.003 billion), Britannia Industries at Rs 94.90 crore (Rs 949 million), Cadbury's at Rs 87.67 crore (Rs 876.7 million), and GlaxoSmithKline Consumer at Rs 85.91 crore (Rs 859.1 million).

Reckitt Benckiser's advertisement expenditure accounted for 17.33 per cent of its sales in 2002-03, up from 15.41 per cent in 2001-02.

Dabur, Godrej Consumer Products and Cadbury also spent over 10 per cent of their revenues on advertisements.