“Indonesia is a traditional society pushing at the seams to express itself," said Shubho Sarkar, CEO of Bates 141 Indonesia, in his soon to be published study Indonesia Demystified. "The overpowering influence of religion, dominance of family, social hierarchy, primacy of opinions of ‘others’ and non-conflict at any cost led to unquestioned conformism for decades.”
However, any bottled-up emotion must find its release, and the advent of smartphones brought social media to Indonesia’s fingertips, where individuality can be expressed amidst the ‘safety net’ of the familiar. Millenials spend four hours a day using their mobile phones, and about 96 percent of those who access a digital platform use social media. That ranks at the very top of the comparative rates of usage by country.
Industry estimates say the wave of digital growth that has led to current online penetration of more than 90 million will continue to 130 million by 2018 and 160 million by 2020. The trend is being driven aggressively by Indonesia’s expanding middle-class population, which is expected to surpass 52 percent of the region’s population by 2020. It further helps that 60 percent of its population is below the age of 40.
“Powered by mobile, the Indonesian market is witnessing various innovations," said Eka Sugiarto, country media head for Unilever Indonesia. "While the traditional business model remains big, their share in the future may need to be secured with the right strategy. The rise of e-commerce and agile services such as Go-Jek [a motorcycle taxi-courier-food delivery service driven through a mobile app] and Grab have created new possibilities for consumer and brand engagements. The volume of transaction may not be comparable yet, but it has surely piqued the interest of marketers. We also see a lot more marketplace type of ideas, where buyers and sellers, publishers and creators and thus, demand and supply, meet.
With exponential growth of mobile usage in Indonesia, online sessions are rapidly giving way to fragmented interactions. This has forced advertisers to re-design their linear and sequential brand experience to a more dynamic and iterative one. The focus now is on understanding the pace and purpose of people and gather data around them, rather than media and brands.
Yasir Riaz, CEO of Starcom, also believes that the age of precision and addressability is here. With Facebook giving a monthly audience reach of 82 million in Indonesia, marketers don’t need to broadcast the same message to everyone anymore. The entry of OTT players like Netflix, Spotify, and others in Indonesia will take targeting to the next level.
“As Facebook is now offering reach and frequency planning option, advertisers and agencies have to put it as one of the stations in TV mix, instead of allocating it investments out of their digital budget,” Riaz said. In a nation where 59 percent of the total ad spending is still being directed toward television, this is no mean feat.
Advertisers have a growing need for data-management platforms, where they can align all behavioural, transactional and attitudinal data so that they can be more agile and drive personal and relevant experiences for their consumers. Digital publishers are also following suit and offering addressability and targeting for specific audience segments instead of just selling impressions and cookie-based data. Programmatic is picking up pace, and issues like click fraud and actual delivery of impressions on the target audience are being discussed now in Indonesia.
Technology has become an integral part of the communications mix for advertisers in the archipelago, as they race to keep up with the younger and more economically active population. “The digital natives are becoming more knowledgeable due to greater accessibility to online and offline information, and are increasingly focused on healthcare and lifestyle," said Pawan Sud, president director, Indonesia, for GSK consumer healthcare. "With this change, there is also an increasing trend of consumers taking charge of their own health, for example, with self-medication. Reaching out to these technologically savvy consumers who are at the heart of our business through different platforms is a key focus for us. We are building our e-commerce capabilities and increasingly relying on tele-detailing, to continue helping people to do more, feel better and live longer.”
Marketers, emboldened often by their own direct relationships with the big technology companies, fostered by the likes of Facebook, Google and Twitter, are beginning to realise that in some cases they are driving the marketing innovation agenda, not their agencies. The pressure is on media and creative partners to keep up with change. The models will have to evolve, sooner rather than later. “The dry ice ice and velvet curtain ‘grand reveal’ of a traditional advertising agency is starting to look hilariously outdated,” said Rajat Basra, CEO at Omnicom Media Group Indonesia.
However, Joseph Tan, who heads Lowe in Indonesia feels it may be quite an uphill task for most agencies. With the proliferation of sophisticated big-data-analytics research, clients now expect agencies to deliver more ROI with a tighter budget. Almost every communication effort is measurable and per-dollar acquisition is the order of the day. However, the configurations and business models of most traditional agencies have remained largely unchanged for the past two decades. “We still have the same ecosystem of heavy account management teams, creative teams of ECD, CD, art director/copywriter, designers, traffic/project management, print producer, broadcast producer, planning teams and back-end support," he said. "This level of overhead in the face of shrinking budget is simply not sustainable considering the country's yearly inflation rate.”
The marriage between technology and media has completely changed the way youngsters are consuming media.
“While brands such as Axe were on the forefront of digital media experimentation, mobile technology has opened up this world to even the belly of the market," said Unilever’s Sugiarto. "We need to create campaigns on mobile platforms for all our brands across categories that can touch everyone. We are already doing it with Bango, Sariwangi, Lifebuoy and Rexona, and plan to bring all our brands under the digital umbrella very soon."
According to her, marketers today need partners with new skill sets. These partners have the ability to understand and synthesise new data, they effectively embrace technology, including measurement and, most importantly, they see fragmentation as an opportunity. “Talent shortage in Indonesia might be in the data-related and measurement-related fields, and our education sector has not caught up with the needs yet,” Sugiarto said.
Toni Darusman, consumer banking marketing head with PT Bank Danamon Indonesia, echoed these sentiments. “The new-age marketers and tech specialists in Indonesia have an entrepreneurial streak in them," Darusman said. "They are independent, agile and not averse to take risks. Agencies and marketers need to make extra efforts to attract the talent into their industry. New skills of digital capabilities and Big Data are needed by almost all sectors."