Online Advertisement Spending in Indonesia Estimated to Grow
RTB House, a Poland-based technology firm that develops solutions for personalized display advertising in more than 30 markets across the globe, expects online advertisement spending in Indonesia to reach USD $4.92 billion by 2019 (up 250 percent from estimated online advertisement expenditure in 2016). This rise comes on the back of Indonesia's rising Internet and smartphone penetration. Recently, Indonesia surpassed the magic number of 100 million in terms of Indonesian Internet users.
Jakub Ratajczak, Managing Director at RTB House for the Asia-Pacific region, said 80 percent of Indonesian consumers already have the habit of checking products or services online before deciding to go-ahead with the purchase of the product (or service) in an offline shop (this is the research online, purchase offline, or ROPO, strategy that has gained popularity across the globe). This implies that online advertisement and branding has become lucrative for businesses in order to promote products and service, hence boosting sales.
Ratajczak added that the growth in online advertisement does not mean that offline advertisement in Indonesia has become less important. Offline advertisement (for example through television or printed media) remains a significant and effective strategy for companies to reach (potential) buyers.
Read more: Indonesia Has 100 Million Internet Users, Internet Penetration at 40%
Meanwhile, Nielsen Media Research's Advertising Information Services (AIS), part of New York-based global information and measurement firm Nielsen Holdings N.V. that is active in more than 100 countries, stated that there occurred a 24 percent (y/y) growth to IDR 31.5 trillion (approx. USD $2.3 billion) in Indonesia's television and printed media add sales in Q1-2016 after advertisement spending experienced a slowdown in 2014-2015 in line with Indonesia's economic slowdown and weakening purchasing power. Nielsen Indonesia Media Director Hellen Katherina said this growth is a sign that the market is becoming more optimistic.
Katherina added that all top categories showed an increase in add sales. For example, clove cigarette advertisement spending climbed 76 percent (y/y) to ID 1.9 trillion, political and government organizations' advertisement spending also rose by 76 percent to IDR 1.8 trillion. Meanwhile, advertisement spending for air-care products rose 36 percent to IDR 1.3 trillion in the first quarter of 2016.