Incumbent Maxus will defend the account against Initiative, Carat and Starcom, in a pitch expected to take place in August. It will cover all Sampoerna brands, including market-leading kretek cigarette Sampoerna A Mild.
Sampoerna is currently the biggest tobacco advertiser in Indonesia, accounting for almost one-third of the market’s spend in the first quarter of 2007, according to Nielsen Media Research.
But the company faces intense competition in its bid to win smokers. Although Sampoerna increased its spend by 19 per cent this quarter, Gudang Garam, the third-largest tobacco advertiser, more than doubled its spend over the same period. Bentoel, another popular brand, upped spend by 43 per cent.
Tobacco advertising has been rising inexorably in recent years. Tobacco companies have increased spend by double-digits annually (as high as 76 per cent in 2004), and media agencies say rumoured curbs on tobacco advertising have made competition more fierce, driving marketing budgets even higher.
Indonesia’s tobacco advertising market, worth Rp 1.7 trillion in 2006, grew by 19 per cent in the first quarter of this year. Tobacco advertising is permitted on TV, where around 90 per cent of it is spent, but only in certain time slots. A limited amount is permitted in print and on radio.