Ad agencies eye telcos in wake of 3G war

MUMBAI: Advertising agencies are in hot pursuit of telecom companies as they sense big spends flowing from the sector amid 3G roll out, global ambitions and new brand communication requirements.

Agencies realise old friendships won’t last in the new competitive climate. They have to pitch hard and make new brand propositions that would catch the eye of the telcos.  
In  a year that has seen aggressive 3G spectrum bids, telecom majors Reliance Communications and Airtel have decided to go with new partners. Airtel has assigned its duties to JWT India, terminating its 15-year-old relationship with Rediffusion Y&R, in an account size pegged at Rs 4 billion.

Reliance Communications, on the other hand, has switched from Cartwheel Creative to Grey in an account size estimated at Rs 2.5 billion. The company, in fact, has also changed its media agency, shifting from Mudra Max to Optimum Media Direction (OMD) India and MEC.

Says a top Grey executive on condition of anonymity, “The telecom sector is becoming a very competitive space wherein there are at least four players present even in smaller towns. Huge sums of money are also being spent in getting 3G licenses and the pressure is huge. Companies, thus, want their agencies to understand that pressure and come up with brand solutions to address the issues.”
While players within the sector are now shifting focus from the actual brand promise to the services offered in their communication strategies, the advent of the 3G spectrum has made them much cautious about their brand talks.

Says Euro RSCG VP - client services Sheel Saket, “As far as the 3 spectrum is concerned, advertisers are adopting the wait and watch approach in their brand communications. This is because not all players are into 3G yet and if the brand message begins to talk about the features, they will actually be at a loss as the others will devise methods to counter the proposition put forward. The requirement right now is to educate consumers on 3G. And as they become, the communications will look at highlighting one feature at a time as a differentiator. Also, in due course this too will become a price war.”

There is an increased need for advertisers to look out for creative partners who can generate bigger ideas that can be utilised across all media platforms – TV, print and OOH.


“Fatigue seeps into the creativity of the agency after a point of time while dealing with the same product and as a result change becomes necessary,” Saket opines.

Telecom majors are looking at all vehicle platforms to convey their brand message. Airtel has decided to spread its reach and recently bagged the BCCI sponsorship rights from 2010-13. It will have to cough out Rs 1.7 billion for 51 international cricket matches (including Tests, ODIs and T20 International) played in India that have been firmed up during this period. The games could go up, for which Airtel has to continue paying at Rs 33.3 million per match.

Telecom companies are going to be aggressive ad spenders this year. Interestingly, the other bidders for the BCCI sponsorship rights were telecom majors Idea Cellular, Micromax and Karbonn Mobiles.

Tam AdEx data proves the aggressive intent of telecom players. According to Tam, there has been a 27 per cent increase in TV ad volume of the telecom sector during January-May 2010 compared to the year-ago period. More than 55 per cent of advertising was on national channels, justifying the existence of telecom companies as national brands with a pan-India presence.

The telecom sector is dominated by the top players, a trend that is representing the advertising spend as well. The top five advertisers contributed to 69 per cent of the telecommunication services TV ad pie (based on ad volumes). Occupying the top three list are Bharti Airtel, Ideal Cellular and state-owned Bharat Sanchar Nigam Ltd (BSNL), according to Tam data.

Bharti Airtel has a 17 per cent TV ad volume share in the category, followed by Ideal Cellular and BSNL with 15 per cent each. Tata Telesevices holds a 13 per cent share while Vodafone Essar has a 9 per cent share.

The telecom sector has different ad campaign requirements, depending on the position the telecom companies have in the marketplace. New entrant Huawei Telecommunications (India), a telecom solutions provider, is going to spend Rs 2 billion over an 18-month period and has assigned its creative duties to Mudra Communications.

The changing market dynamics in the handset space is creating pressure points on the advertising front. Nokia, monopolising the Indian market for long years, is now losing share in the premium segment. The bottom-end of the market is seeing a price war with new players coming out with attractive entry pricing.

Lava Mobiles has decided to go with Contract Delhi and will be spending Rs 250 million in its ad campaigns. Wynn Telecom, which is foraying into the mobile handset business under the ‘Wynncom‘ brand, appointed Dentsu Creative Impact as its creative agency. The company’s marketing budget for the current fiscal will be in excess of Rs 300 million spread across television, print, outdoors and online media platforms.

Nokia Corporation still tops the list of advertisers among the handset manufacturers with a 22 per cent share in TV ad volumes for the period January-May 2010, according to Tam data. This is followed by Samsung India Electronics and LG Electronics India with a 15 per cent and a 9 per cent share respectively.

Ad budgets of the smaller players is low but the spread of the sector is interesting agencies as they have to come out with campaigns that would drive penetration into the interiors and the lower strata.

Even as the telecom sector enters into a new phase of expansion, brands have to be freshened and tailored to meet the new market conditions. Vodafone, for instance, has gradually shifted from its focus on network (pug follows) to value added services.

The ads with ZooZoos have attracted many to the Vodafone brand.

Airtel, the biggest mobile services provider brand, has done advertising with three focus points – Express Yourself, Atoot Bandhan Atoot Network, and inspirational and patriotic. Now, after its international acquisitions, Bharti Airtel has to craft new campaigns that would build its image as a global brand.

“It is not just more advertising that the telecom companies are spending. There are some great creatives coming out. The ZooZoo ads are a case in point,” says a senior ad executive who did not want his name to be revealed.

Latest Reads
Gutenberg Wins Gold in PR Asia Awards for 2018

Gutenberg, an award-winning global and integrated digital marketing communications firm, has been named a gold winner in the Public Affairs category by PR Awards Asia, an organization celebrating the most outstanding, inspired and successful campaigns, individuals, and companies in Asia-Pacific’s...

MAM Marketing MAM
Mondelez International elevates Luca Zaramella as EVP CFO

Mondelez International has elevated Luca Zaramella, appointing him as EVP chief finance officer.

MAM Media and Advertising People
Can Ranveer Singh breathe life into the Swiss tourism industry?

MUMBAI: Everyone loves a little vacation once a year. They say, Travel makes one modest, you see what a tiny place you occupy in the world. The tourism industry today is booming with the number of people travelling to foreign destinations witnessing a three-fold rise.

MAM Marketing Brands
Neha Kakkar pays Tribute to Friendship with Mindshare, Y-Films & Brooke Bond Red Label’s 6 Pack Band 2.0

Neha Kakkar, one of the most popular singers of this generation, known for her chartbusters like Chull, Kaala Chashma, London Thumakda and more has now extended support for mental health & disability by cutting a new single with a special needs band. The band created by Mindshare & Yash Raj...

MAM Media and Advertising AD Agencies
Nucleus wins PR mandate for Zolostays

Nucleus Public Relation has bagged the PR mandate for Zolostays, a co-living solutions provider, as it looks to enhance its brand visibility in India. Zolostays offers affordable, fully managed accommodations, which include food, utilities and housekeeping services.

MAM Marketing MAM
Uber appoints Pradeep Parameswaran as its new India head

Ride-sharing app Uber on Tuesday appointed Pradeep Parameshwaran as its new India and Asia head. The company's move is in line with its aim to double down on its investment in the country, as it looks to grab market share from home-grown rival Ola (ANI Technologies Pvt Ltd).

MAM Media and Advertising People
Adidas wakes up entire neighbourhood to celebrate Football

Dentsu Aegis Network’s flagship media agency Carat, has partnered with the network’s OOH agency Posterscope, to launch a massive campaign for FIFA World cup 2018. The idea was to create buzz and excitement around FIFA and to own conversations around the World cup for Adidas in a cricket dominated...

MAM Media and Advertising Ad Campaigns
Blush’s latest video titled ‘The Choice’ in association with Indira IVF

Indira IVF, in collaboration with Culture Machine’s digital channel ‘Blush’, released a video titled ‘The Choice’, as a part of Blush's on-going Mothers & Daughters series.

MAM Marketing MAM
Arun Sharma elevated to COO for Delhi business at Initiative

Initiative, which is a full-service media agency from IPG Mediabrands, has promoted Arun Sharma to the role of chief operating officer for Delhi business.

MAM Media and Advertising People

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories