wireless telecom services - cornell university presentations... · humor 69.3% of ads contained...

WIRELESS TELECOM SERVICESINDUSTRY & AD STRATEGY REPORT

APRIL 2017

Cornell University | 1

Why Wireless Telecommunications?

We evaluated them on the following criteria:

BudgetData availableInteresting Campaign


Wireless Telecommunications

3Cornell University | 2

Budget

4 Companies in Adage Top

200 Advertisers of 2016



Data AvailableOver 30% more ads airing during primetime 2014 than next largest advertiser



Interesting Campaigns

Comparative Comparative with Price Comparison

Humor in Ad Celebrity in Ad



Interesting Campaigns Cont’d


Comparative Credence Attributes (reliability)

Search Attribute Combative Call-to-Action (Switch)

INDUSTRY REPORT




Operate transmission facilities to provide direct communication through radio-based

cellular networks.

Wireless Telecommunications Providers


Alarm, Horn & Traffic Control Equipment Manufacturing

Computer Manufacturing

Semiconductor & Circuit Manufacturing

Telecommunication Networking Equipment Manufacturing

Wired Telecommunications Carriers

Wireless Spectrum

Consumers

Telecommunications Resellers

Wireless Telecom Providers

Wireless Telecom Supply Chain




Product & Services Segmentation Key Technology

•Switched off

1G

•Declining dominance

2G (MMS)

•Mobile Internet

3G

•Current

4G, LTE

•Coming soon

5G

Telecommunication Industry Services & Product Offerings

Source: IBIS World

11Cornell University | 11Source: IBIS World

Growing Demand For Mobile Internet Access

Est. 2017: 311.4M Connections (U.S. Pop: 326M) Growth rate slowing down, but steady

Est. 2017: 14.8% Growth rate is increasing


12Cornell University | 12Source: IBIS World

38%

33%

14%

13%

Others2%

Market Share

2890(Highly concentrated market > 1800)

HHI

Intense competition and consolidation have decreased the number of enterprises at

an annualized rate of 0.9%over the past five years.

Major Industry Players & Industry HHI



Coverage Map (April 2017)

Product Differentiation




Limited Assets

Barriers to Entry

Spectrum

Finite number of companies can operate cellular communication services

Allocation through auction


Government Regulation


Prevent over-charging & cramming

Anti-Trust

Merges and Acquisitions

Federal Communication

Commission (FCC)


In 2011, AT&T attempted to acquire T-Mobile.

ADVERTISING STRATEGY



DIGITAL MARKETING


Source: Spyfu Cornell University | 21


On average, AT&T invests in +54% more paid keywords per month than VerizonNumber of Paid Keywords Per Month for Last 12 Months

19Source: Spyfu Cornell University | 21

AT&T has the least cost-efficient paid ad strategy, with high average PPC costsTotal AdWords Budget & Number of Paid Click for Last 12 Months


Average PPC

• AT&T: $3.58

• Sprint: $1.67

• T-Mobile: $1.67

• Verizon: $1.95

TV ADVERTISING



21

Content Analysis




Primetime Advertising Strategies



Primetime TV

Analysis Methodology

10279 Ads

Analyzed primetime strategy on: Time Placement Program Type Network Ad Creative Cost Efficiency

Advertiser Focus: 4 Major Telco Operators Verizon AT&T Sprint T-Mobile

Source: 2014 Primetime TV Advertising Data Cornell University | 24


Advertisement Volume DistributionCY 2014 Primetime

Average Ads Per Day

Ad allocation across time is more pronounced for Verizon and AT&TTotal # Ads By Time and Month


Wireless Telecommunications Time

AT&T implements a “first-in” strategy, striving to be the first industry ad seen by viewersNumber of Ads by Ad Block for Programs with 7 Ads Block



Sprint has the largest time elapse between its same day adsAverage Time Elapsed Between Same Days Ads By Network



AT&T heavily invests in cost-saving channelCost-Effectiveness Across Networks


Wireless Telecommunications Ad Spend

Verizon differentiates itself through a content-driven strategyTotal Number of Unique Ads by Ad Lifetime (# of Runs)


Wireless Telecommunications Ad Creative

Providers target months were Verizon creative count is the lowestTotal Number of Unique Ads by Month


Wireless Telecommunications Ad Creative

34

Content Analysis



TV Advertisement Content Analysis


Cornell University | 11Cornell University | 36


Content

Analysis Methodology

110 AdsAd Selection Procedure: Availability Sampling –using ads found on YouTube

Coded for presence of… Humor Celebrities Emotion Call to action (e.g. “Switch”) Informative Comparative

Limitations: Sample most likely represents ads with some entertainment value



Characteristic of Combative Advertising

Supply side

Advertising with the goal of stealing customers

Characteristic of mature markets

Prisoner’s Dilemma

Combative Advertising



Advertise Don’t advertise

(38%, 33%) Verizon steals market share from AT&T

AT&T steals market share from Verizon

Relative market shares presumably remain unchanged, and profits

increase due to decreased advertising expenditures

Ad

vert

ise

Do

n’t

A

dve

rtis

e

Combative Advertising: Prisoner’s DilemmaAT&T

Ve

rizo

n



Sprint & T-Mobile heavily rely on call to action or “Switch” contentCall to Action Ads Percentage of Total Sample by Advertiser


Characteristic of Comparative Advertising

Advertising that specifically mentions competitors

Efficient locally, but exaggerates excessiveness of advertising in whole market

Comparative AdvertisingPaul Marcarelli Switches to Sprint

Colorful Ball Wars


Paul Marcarelli Switch to Sprint





“They’re using our 2002 pitchman because they’re finally catching up to where we were in 2002. Of course since then, we’ve spent billions of dollars - $11 billion last year alone – improving and expanding America’s best wireless network.”

-Jeffrey Nelson, Verizon


Color Ball Wars

Verizon released a commercial about a study which showed rigorous results in favor of Verizon

Sprint responded with a similar commercial rebutting those findings

T-Mobile responded with a similar commercial that used humor and celebrity to undermine the validity of the original study




AT&T minimally relies on comparative advertisingComparative Ads Percentage of Total Sample by Advertiser

44

Characteristics of Humor in Advertising

Humor decreases ad recall, but increases brand attitudes (Gelb & Zinkhan, 1986)

May be used to reduce validity of comparative advertising

Wireless telecom capabilities is a dry subject, so companies often use humor to try to make it more exciting


Humor in Advertising



76.7% of AT&T ads used humorHumor in Advertising: AT&T

“It’s Not Complicated” campaign (2014)


46

“It’s Not Complicated”

(2014)

AT&T

“Don’t Be Afraid of Dead Zones”

(2008)

Verizon

“Pets Unleashed” (2015)

T-Mobile

“No Need for Extreme Measures”

(2017)

Sprint

76.7%Of ads contained

humor


humor


humor


humor


Humor in Advertising

50

Characteristics of Informative Advertising

Purpose of advertising is to convey information

Reduces search costs

Pro-competitive


Informative Advertising


51

“Food Court” (2014)

AT&T

“More Everything Plan” (2014)

Verizon

“We Killed the Contract” (2014)

T-Mobile

“Dad Joins the Framily” (2014)

Sprint

43.3%Of ads were informative





Informative Advertising

56

Characteristics of Persuasive Advertising

Advertising creates needs and wants

Frequently used when reputation is important (as with credence attributes)

Emotional appeal Arouse emotions; more

visceral responses Don’t require logic


Persuasive Advertising


57

“Long Distance” (2009)

AT&T

“Brothers” (2014)

Verizon

“Home for Holidays” (2012)

T-Mobile

“Veatrice’s100th Birthday”

Sprint

16.7%Of ads contained emotional appeal





Emotional Appeal in Advertising

62

Characteristics of Celebrities in Advertising

Sales increase with celebrity-related ads (Elberse & Jeroen, 2011)

Demand for products increases with celebrity success (Derdenger et al., 2017)


Celebrities in Advertising


63

“Same Plan For Everyone” (2014)

AT&T

“School Dance” (2014)

Verizon

“No Contract” (2014)

T-Mobile

“Totes McGotes” (2014)

Sprint

10.0%Of ads featured

celebrities


celebrities


celebrities


celebrities


Celebrities in advertising


RECOMMEDATIONSRECOMMENDATIONS



Cornell University | 11Cornell University | 65

Goal: Find company with promise of large future returns

Future Monopoly: Twitter vs. New York Times

Barriers to entry

Comparative pricing advertising

Mature Market

Venture Capitalist InvestmentWireless Telecommunications

66

Goal: Find companies that are underpriced in the market

No future monopolies

Stocks with low P/E earn larger returns than stocks with high P/E

Stock Market Analyst

Short T-Mobile

LongAT&T

Verizon



67

Do

Target more on network

Use humor Use comparative pricing in ads

Combative calls to action

Increases brand attitude

– credence attributes (Gelb,

Zinkhan 1986)

Advertising Strategy



Don’t

Questions



wireless telecom services - cornell university presentations... · humor 69.3% of ads contained...

Documents