• Global telecoms adspend to return to 2019 levels of spending in 2022
  • Digital advertising will be the only channel to grow between 2019 and 2023
  • India and Russia to lead adspend growth as smartphone penetration spreads more widely


Zenith predicts that telecoms advertising will grow at an average rate of 4.5% a year to 2023 as its recovers from an 8.7% decline in 2020, according to Zenith’s Business Intelligence – Telecommunications report, published today. Telecoms adspend 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.


In Australia, growth in adspend will be slow and steady. It is forecasted to reach US$314m by 2023, compared to US$365m in 2019. As with other markets, digital advertising will rebound more strongly than other media channels, with spend expected to near pre-pandemic levels by 2023 to reach US$217m, compared to US$224m in 2019.


Smartphone sales will start to spring back this year once consumers feel more confident in their future. Consumers are becoming more willing to finance and purchase handsets independently from their network providers, giving manufacturers and retailers a greater incentive to advertise handsets themselves. Meanwhile, the networks will seek to recoup their investment in 5G licences and infrastructure through new services and more expensive data packages. All these trends will help fuel healthy growth in telecoms advertising over the next three years. Zenith predicts telecoms adspend will grow 4.7% in 2021, 4.4% in 2022 and 4.3% in 2023.


Digital platforms help telecoms brands demonstrate relevance to exacting consumers

Voice and data services are commoditised and functionally indistinguishable to consumers, who expect them to work flawlessly in the background and only pay attention to them when they go wrong. High-impact advertising in mass-audience media like television and radio allows telecoms companies to differentiate themselves from others through branding, and makes them more relevant to consumers by promoting their association with things consumers are passionate about, such as entertainment, sport and music. Telecoms brands therefore spend substantially 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 audiences migrate online, telecoms companies are refocusing on communicating their brand narratives 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 adspend is increasing. Zenith forecasts that telecoms brands will increase their digital adspend at an average rate of 5% a year between 2019 and 2023. By 2023, digital advertising will account for 54% of all telecoms advertising.


“COVID-19 has demonstrated 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 challenge is to go from being unsung to being acknowledged and appreciated 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 limelight.”


According to results from a ZenPoll conducted last week**, the most important aspects for Australian consumers when choosing a network provider are Cost (57%), followed by Unlimited Calls & Messaging (38%) and Amount of Data (34%), and then Brand Reputation (27%).


In other findings, the top uses for smartphones among Australian consumers (excluding calls and messaging) were Checking the Time/Watch (63%) and Reading/Sending Emails (62%), closely followed by Social Media (57%), Maps/Directions (56%), and Online banking (53%).


Zenith Australia’s Head of Strategic Insights, Kim Xavier, said: “It’s clear that connection is a key driver in how people use their smartphones, whether it’s to look at emails, or go onto social media. To reiterate this point, we also found that more than 60% of Australians feel being reachable and connected are the most important factors associated with telco services.”


*The 12 markets included in this report are Australia, Canada, China, France, Germany, India, Italy, Russia, Spain, Switzerland, the UK and the US, which between them account for 73% of total global adspend. Telecoms is defined as services and equipment facilitating the transmission of voice calls and data by land lines and mobile networks.

**Zenith Australia GenPoll, carried out 16th March, 2021. Base n=319


For further information, please contact:

Camille Alarcon
Tel: +61 429 137 955
Email: camille.alarcon@publicisgroupe.com


About Zenith
As the ROI agency, Zenith leverages data, technology and talent to scout out new opportunities, solve complex challenges and grow clients’ businesses. The agency has more than 6,000 brilliant specialists across 95 markets – experts in communications & media planning, content, performance marketing, value optimization and data analytics. In Australia, Zenith has offices in Sydney, Melbourne and Brisbane, with over 150 staff. Zenith works with some of the world’s leading brands including Aldi, Honda, Luxottica, Reckitt Benckiser, Lite’N Easy, Kering, Lactalis, and The Walt Disney Company.

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