S-Group Insights: Telecom sector sees 10% drop in ad volumes in Q3'2015

Airtel, Vodafone, Idea, Aircel, Tata Teleservices together hold 94% TV ad share. Tata Teleservices & Vodafone reduced the advertising volume by 49% & 37%, respectively

e4m by exchange4media Staff
Updated: Nov 10, 2015 8:24 AM
S-Group Insights: Telecom sector sees 10% drop in ad volumes in Q3'2015

exchange4media.com and Strategy Group, the Analytical Arm of TAM Media Research, jointly bring  you a weekly column 'S-Group Insights' on Advertising Trends of different Product Categories. This column will be published every Tuesday and aims to aid advertisers, and media agencies understand changes in Media Consumption patterns leading to Scientific Advertising Investments. In the current column, we take a look at Telecom industry as a category.

India is the world's 2nd largest telecommunication market, with over 1 Billion subscribers as of May 2015. The wireless segment (97%) dominates the market. During FY 07-15, wireless subscriptions witnessed a CAGR of 25% to 970 million. It is also the 2nd largest country in terms of internet subscribers. India's telecommunication market is expected to experience further growth, fueled by non-voice revenues and higher penetration in Rural market- IBEF.

Let's look at Ad Expenditure of Telecom/ Internet Service providers of India across 3 platforms of promotion-TV, Radio & Print

Television: Telecom/ Internet Service Providers category accounts for 3% of total Ad spends on TV featuring in the top 10 most promoted categories.

Top 5 Telecos viz. Airtel, Vodafone, Idea, Aircel & Tata Teleservices  together hold a share of 94% in the category which involves total 22 players who advertised on TV in 2015. 

The category however has seen a drop in Ad volume of 10% in Q3'2015 compared to Q3'2014. Tata Teleservices & Vodafone reduced the advertising volume by 49% & 37% respectively.

Airtel which started the year on a low scale bounced back with heavy TV spends in Q3 this year. Airtel in Q3'2015 had more than 50% advertisement share on Television. According to TAM viewership data in Q3'2015 Airtel commercial was viewed 39 times by an average viewer Vs 20 times of IDEA & Vodafone each. Airtel promos also reached out to a higher % of TV universe (94% Cume Reach) than IDEA & Vodafone (90% Cume Reach each).

If we look at year on year trend then it appears that the category has decreased the promo duration on TV in 2015 compared to FY 2014 but the numbers are actually higher than Yr 2012 & 13. Main reason behind relatively higher numbers for the category in 2014 was heavy promotion of Airtel Money in first 3 Quarters of 2014 also Airtel 3G was promoted heavily in Q3.

Focus of Airtel:

85% of the total Ad Volume on TV for Airtel went towards the promotion of 4G. It is 40% more than it used for the promotion of 3G in Q3 of 2014.

Strategies Used by Top Players:  All 3 Top players have reduced their inventory from Hindi language channels in 2015. Amongst top 3, Airtel gave maximum focus to regional channels whereas Vodafone gave maximum focus to mass channels (Hindi & English).  IDEA has increased share of regional channels in its plan of 2015 reducing the inventory from Hindi Channels; Malayalam channels continue to hold larger share in IDEA's TV plan whereas Tamil channels receive relatively lesser focus.

Radio: Radio is the 2nd most preferred medium for advertisement for Telecom players in terms of count of ads. It received 25% of total promotion in Q3'2015 for Telecom/Internet service category whereas the same figure for TV stood at 74%; Print receiving nearly 1% inventory for the category.

Airtel which was shying away from the medium until Q2'2015 currently holds the highest commercial duration on Radio. Its focus being on West Zone followed by South. Aircel & BSNL focus on South Zone whereas IDEA & Vodafone target West zone through advertisement on radio.

Print: In Print also Airtel holds the numero uno position for maximum Ad volume. Times of India & Economic Times are the top 2 preferred publications for Airtel whereas Idea preferred to promote maximum on Dainik Jagran (Hindi) & Matrubhumi (Malayalam) in Q3'2015.

Vodafone which was maintaining a competitive threshold of ad volume on print until Q1'2015 dropped it to a minimal level in next 2 quarters.

Despite of phenomenal growth in internet user base; India lags behind in penetration of internet in the country. As we wait for greater penetration of faster internet across the country, Airtel has already launched 4G ahead of its competition; its massive TV campaign had reached to 92% of the urban population of India by the end of September this year as measured by TAM with an average frequency of 30 impressions/viewer. It would be interesting to see if Airtel manages to get the 1st mover advantage in 4G space.      

Source: TAM Media Research, analysis conducted by S Group-an analytical arm of TAM Media Research

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