After cutting ad spending by 8.7% in 2020, telecom brands are expected to commit to consistent growth in ad expenditures over the next few years. A forecast from Zenith estimates that telecoms advertising will grow by an average of 4.5% per year through 2023.
With consumer confidence expected to grow, Zenith foresees an uptick in smartphone sales. That, coupled with networks attempting to make up for the cost of 5G licenses, is expected to spur more advertising spending. Predictions find 2021 telecoms ad spend growing by 4.7% year-over-year (y-o-y) to reach $18.7 billion, while similar growth is expected in 2022 (4.4%) and 2023 (4.3%).
What stands out in Zenith’s data is the proportion of ad budgets telecom brands dedicate to TV and radio. In 2020, telecom brands in the 12 markets analyzed totaled $17.8 billion in spend. Advertisers allocated 42% of that budget towards TV and radio. This is an above-average portion compared to the average of 30% spent on TV and radio by advertisers, in general.
On the other hand, telecom brands allocated a below-average share of spend to digital media. On average, advertisers dedicated 56% of their ad spend to digital media last year, yet telecoms only allocated 49%.
This does not mean, however, that telecoms are completely bucking the trend of increasing spending on digital. Quite the contrary. Zenith reveals that digital advertising is the only area where telecoms are increasing their ad spend, as spending on digital is expected to increase by an average of 5% per year between 2019 and 2023 when it will account for 54% of total telecom ad spend.
Additionally, spending on TV and radio is expected to decrease, albeit at a slower than average rate. The Zenith forecast shows that telecom ad spending on TV will shrink at an average rate of 2% each year between 2019 and 2023, while ad spend on radio is expected to decrease by 2.8% per year
About the Data: Findings are based on analysis of 12 markets (Australia, Canada, China, France, Germany, India, Italy, Russia, Spain, Switzerland, the UK and the US) which combined to account for 73% of total global ad spend.