Pandemic habits - Smartphone sales will start to spring back this year

Chris Pash
By Chris Pash | 22 March 2021
 
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Smartphone sales will start to spring back this year once consumers feel more confident in their future, according to Zenith’s latest global Business Intelligence - Telecommunications report.

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.

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.

Growth will be slow and steady in Australia where the telco ad spend market is forecast to reach US$314 million by 2023, compared to US$365 million in 2019.

Zenith says 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," says Zenith.

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 ad spend is increasing. 

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. 

“COVID-19 has demonstrated how dependent we are on good, fast and reliable internet connections," says said Ben Lukawski, global chief strategy officer, Zenith. 

"Telecoms companies have been the unsung heroes of the pandemic, shifting our lives online and keeping us connected to entertainment, work and commerce. 

“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.” 

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