India is set to be the fastest-growing market for telecom advertising amid 2020 and 2023 in the world. According to a report by media agency Zenith, the Indian telecom sector in the country will manifest 11% annual growth by 2023.
Zenith’s report has speculated that India will see the most accelerated growth between 2020 and 2023, in telecom advertising.
According to Zenith’s Business Intelligence – Telecommunications report, telecoms advertising will increase at an average rate of 4.5% a year to 2023 as it recovers from an 8.7% decline in 2020. Telecoms ad spends in the 12 key markets included in the report* will rise from US$17.8bn in 2020 to US$18.7bn in 2021, and then return to its pre-pandemic level of US$19.5bn in 2022.
Digital platforms help telecoms brands prove the connection to precise consumers Voice and data services are commoditised and functionally obscure to consumers, who await them to work without any disturbance in the connection and can only pay attention to them when they go reverse. High-impact plugging in mass-audience media like television and radio allows telecoms companies to distinguish themselves from others through branding and it makes them more suitable to consumers by advancing their connection with things consumers are vehement about, such as entertainment, sport and music. Telecoms brands, therefore, spend considerably more on television and radio advertising than the average brand – in 2020 they spent 42% of their budgets on television and radio, while the average brand spent 30%.
But as viewers migrate online, telecoms companies are refocusing on communicating their brand accounts to mass digital audiences. Telecoms brands spend less on digital media than average (49% of their budgets went to digital channels in 2020, compared to 56% for the average advertiser), but digital advertising is also the only channel in which telecoms ad spend is intensifying. Zenith forecasts that telecoms brands will increase their digital ad spend at an average rate of 5% a year between 2019 and 2023. By 2023, digital advertising will account for 54% of all telecoms advertising.
Smartphone sales will start to bloom back this year once consumers feel more convinced in their future. Consumers are becoming more amenable to finance and purchase handsets separately from their network providers, giving manufacturers and retailers a larger incentive to advertise handsets themselves. Meanwhile, the networks will endeavour to regain their investment in 5G licences and infrastructure through new services and more costly data packages. All these trends will help fuel robust growth in telecoms advertising over the next three years. Zenith predicts telecoms ad spend will grow 4.7% in 2021, 4.4% in 2022 and 4.3% in 2023.
“COVID-19 has proved how dependent we are on good, fast and reliable internet connections. Telecoms companies have been the unsung heroes of the pandemic, shifting our lives online and keeping us connected to entertainment, work and commerce,” said Ben Lukawski, Global Chief Strategy Officer, Zenith. “Their hurdle is to go from being unsung to being recognised and valued for their efforts. The spread of 5G and the reality of our new-found virtual lives give telecom brands the opportunity to move into the spotlight.”
Telecom brands are casting back their spending on traditional television and radio as their reach drops, but less swiftly than brands in most other categories. Zenith forecasts that between 2019 and 2023, telecoms brands will decrease their television ad spend by an average of 2.0% a year, compared to a 3.5% annual reduction across all categories. They will also reduce their radio ad spend by 2.8% a year, compared to 4.1% a year for the market as a
whole.
“The telecom sector in India in 2021 is anticipating a robust growth on the basis of an increase in tariff pricing, demand for data, a growing number of mobile users and hopefully the launch of 5G in the last quarter. This will lead to a substantial increase in media investments by the key players especially on Television & Digital” said Jai Lala, COO, Zenith India.
Russia is another market with relatively low (57%) but fast-growing smartphone entrance, and here telecoms ad spend is forecast to rise rapidly too, by 8% a year.
Most of the other markets in this report are forecast to expand by between 3% and 6% a year to 2023. The exception will be France, not because of any internal inclination in demand, but unlike those in most markets, French telecoms brands raised spending in 2020 – by 6% – in response to the extra demand for data. The basis of judgment with 2023 is therefore considerably more intricate.
