We forecast that, despite the pandemic and the resulting recession, telecom advertisers will increase their digital ad spend by 12.0% this year, reaching $13.99 billion. That is only slightly below our pre-pandemic estimate of 15.8%, which marked a slight deceleration after years of massive growth in telecom’s digital ad spend.
This growth stands out in a year where total US digital ad spending will only increase by 1.7%, and four other industries will contract their spending outright. Telecom’s share of total US digital ad spending will cross into double digits this year, accounting for 10.4% of the market.
In the telecom industry, competition is fierce and brand loyalty is notoriously low. The major US telecoms are in constant battle for market share, which keeps the ad spending floodgates open. The rise of 5G and the merger between Sprint and T-Mobile will only intensify this dynamic.
The pandemic-related shift to remote work and remote learning, too, has heightened demand for new and higher-quality telecom services in residential areas. The need for faster and more reliable internet has created new market opportunities for US telecom companies, particularly as bandwidth-intensive enterprise solutions are increasingly operating out of employees’ homes.