Telcos splurge on ads in 2016, set to spend even more this year

Call it the Jio effect: telcos increased their advertising spends 50% to around ₹1,000 core in 2016. And they could increase it by up to another 15-20% this year, say media buyers.

Reliance Jio Infocomm Ltd launched its services in September last year, offering free data and voice till the end of March. Its high-decibel launch prompted frenzied advertising by its main rivals, Bharti Airtel Ltd, Idea Cellular Ltd and Vodafone India Ltd. Idea and Vodafone have since announced their intent to merge.

Together, the four firms spent around ₹1,000 crore, according to the Pitch Madison Advertising Report 2017 published by media buying agency Madison World.

And almost half that was spent by the market leader; Airtel spent ₹450-550 crore on advertising as against ₹250-350 crore in 2015, while Reliance Jio just spent ₹100-150 crore, according to the Pitch Madison report.

“With Jio coming in, it is almost like a telecom services war. The leaders of yesterday are under threat. Everyone is trying to occupy a larger space. Airtel, Vodafone and Idea will have to be on the top of the game to engage consumers and users,” said Anita Nayyar, chief executive officer of Havas Media Group, India and South Asia.

Reliance Jio recently crossed the milestone of 100 million subscribers in 170 days, adding seven customers every second.

Spokespersons for Airtel and Idea declined to comment. Reliance Jio did not respond to e-mails seeking comment.

“2016 was an exciting year for Vodafone and can be summed up as the ‘year of digitization’ since we leveraged our digital platforms innovatively and introduced several differentiated offerings,” said Siddharth Banerjee, executive vice president, marketing, Vodafone India.

This year will see even more intense competition between the telcos, and, as a result, more ad spends.