City Spotlight: Jakarta's advertising industry is coming of age (Part 1)

Indonesia's advertising voice

“Advertising is based on one thing, happiness.” If there is one country that fits this statement by Don Draper in Mad Men, it has to be Indonesia.

A relatively new advertising market, Indonesia is slowly finding its creative voice and colloquial humour has found its way into many campaigns.

“People are generally content and happy and it shows through in the creative work,” says Shubho Sarkar, CEO, Bates 141 Indonesia. “While advertisements that don’t pretend to be anything else—and simply communicate product benefits without any irony or outrageous creativity—don’t tend to win awards, Indonesians that I know don’t really care.”

The youth appear far more confident than the previous generations in Indonesia, and brands and platforms that offer an outlet for self-expression, manages to strike the right chord. Katryna Mojica, CEO, O&M Indonesia says: “It's always important to be locally-relevant, while staying true to the brand's values. A nice example is the work we've done for Axe, because what the brand stands for seems to be polar opposite to Muslim values. But you can always find some common ground, and the work has been very well received.”

Brands invest heavily on celebrity endorsements in Indonesia, and there is a tendency to use soap stars to front campaigns, regardless of the product or category. “Most brands have a star on their roster and they want to milk them at every opportunity,” says Anne Ridwan, CEO, Leo Burnett, Indonesia. Interestingly, even when popular singer–songwriter Nazriel “Ariel” Irham was sentenced to prison for leaked sex tapes, he maintained his cult status and bagged some hefty endorsement contracts on his release.

According to Yogesh Anand, director of marketing for chocolates, Asia at Mondelez International, consumers in Indonesia respond better to simplicity of messaging and more direct storytelling, which has higher visual appeal. “But there is a room to push the creative boundaries and be more experimental to bring to life the insights and surprise our consumers,” he adds.

A local mobile success story featuring Unilever Indonesia's Bango Warisan Kuliner mobile app, by Arcade

Agency landscape

Indonesia is primarily a ‘sellers market’ with three big media conglomerates shaping the landscape. “The rate of media inflation in the last few years has been much greater than the increase in marketing budgets of clients,” says D.D 'Lulut' Asmoro, CEO, JWT Indonesia. “Agencies are forced to deliver for less and the only way to do that is to sell more spots. It has taken a toll on creativity and has made the industry fiercely competitive. The pool of businesses that generate revenues is shrinking.”

Joseph Tan, CEO, Lowe Indonesia echoes this view: “It either helps to be a big networked agency with globally aligned clients here or a smaller boutique outfit. Mid-sized agencies find it even more challenging here.”

Despite the odds, independents such as Arcade and Dog Digital have anticipated the opportunity here, and recently set up shop working with clients like Unilever and Tourism New Zealand respectively.

Gary Caulfield, CEO of Arcade Indonesia, says: “There seems to be a shift, or preference from clients, towards more boutique agencies now than the bigger multinationals. Therefore, I would not be surprised to see more agencies like Arcade trying to set up here in the future too. But at the same time, I know some others have already tried and failed, so it's not as easy as it looks, or sounds.”

While MNCs are casting a wider net, a lot of local Indonesian clients are moving away from small local agencies, which used to offer a fee flexibility and tactical solutions. They are shifting to more established players in a bid to remain relevant and competitive in a fragmented media landscape. “Brands such as Telkomsel are on top of their game and challenging us to up our creative stakes,” says Leo Burnett’s Ridwan.

Some suggest that Indonesia has the potential to becoming a Southeast Asia's regional hub for multinational agencies. Rajat Basra, CEO, OMG Indonesia says: “The steadily growing importance of Indonesia means that global or even regional pitches being decided in far-off boardrooms are a passé.

"Today, I sit on the same table as heads of other important markets in a global review and make a case for my country. The regional account for Heinz ABC was pitched on the back of how agencies performed in two focus markets—China and Indonesia. We emerged the winners in both and bagged the global account.”

Office space and watering holes

While most of the agencies have moved out of old warehouses and residential plots into the steel and chrome environs of high-rises that dot Jakarta’s skyline, JWT Indonesia has managed to stay put at its original dwellings—a refurbished Dutch villa in the town centre. “Our place of work has in many ways shaped the culture of JWT Indonesia. There is an informal, family-like vibe to it,” says Lulut.

Most of the big clients are based around the SCBD (south central business district) and therefore the agencies are interspersed between south and central Jakarta. The city's notoriously bad traffic forces people to mingle and entertain within walking distances of their offices and some of the favourite watering holes are Corks & Screws, Blue Grass, E&O and Loewy.

“There was a time when each agency took turns to take everyone out for a drink," Tan says. "With commissions being squeezed and competition getting worse, it’s each to his own now. It’s time that the industry’s big kahunas get together and bring the glamour and glitz and fun back into advertising.”
 

Coming tomorrow: Part two of this Jakarta spotlight will explore areas for growth in Indonesia, and the challenges that accompany them