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Effective Marketing Critical for US Telecoms to Remain Relevant

Telecom industry is the fourth-largest US digital ad spender, but growth is slow

The telecom industry is the fourth-largest spender on digital advertising in the US after the retail, financial services and automotive sectors. Despite telecom’s size, eMarketer expects the industry to lag almost all other US verticals in digital ad spending growth, according to a new report, “The US Telecom Industry 2014: Digital Ad Spending Forecast and Trends,” part of our new report series, “2014 Digital Ad Spending Benchmarks by Industry.”

One of the reasons for telecom’s relatively slow growth curve is its reliance on search, which will lose share to video and rich media over the next several years. In addition, telecom continues to depend heavily on TV advertising, which wireless carriers and multichannel video providers use to highlight their offerings and poach customers from rivals. Further, telecom advertising is dominated by a handful of deep-pocketed players that plan ad budgets far in advance and don’t move as quickly as companies in industries with faster-shifting dynamics.

As telecom firms compete in an increasingly saturated market, they face existential threats from internet-based voice and messaging services, the erosion of the cable TV subscriber base, and consolidation among some of the most powerful players in the space. These challenges are forcing telecoms to make effective use of marketing channels in an effort to keep the customers they already have, gain new ones and make a case for the industry’s relevance at a time when emerging technologies are pulling users away from traditional point-to-point services.

Telecom is in line with US industry averages when it comes to the mix between direct-response and brand-driven advertising. The industry leans slightly toward the direct-response side, which in telecom means getting customers into stores to purchase new devices or plans, or upgrade existing ones.

With the exception of healthcare and pharma, which is an outlier, US industries tracked by eMarketer spend anywhere from 33.0% to 37.0% of their digital ad budgets on mobile. Telecom falls right in the middle of this range at 35.0%.

Announcing the 2014 Digital Ad Spending Benchmarks by Industry: The Complete eMarketer Series Available exclusively to eMarketer subscribers

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  • In-depth coverage of digital ad spend for Retail, Financial Services, Automotive, Telecom, CPG, Travel, Consumer Electronics, Media & Entertainment, and Healthcare & Pharma
  • First-ever breakouts for paid mobile ad spend by industry
  • Updated forecasts for direct response vs. branding spend by industry
  • Nine reports, featuring over 100 new charts
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