Business

RI's online ad market to
go bigger despite crisis:
Yahoo

The deepening global financial crisis may provide an opportunity for the online advertising industry in Indonesia to expand, Yahoo says.

The US giant Internet service provider said that not only would promotions become more targeted and thus relatively more efficient, but online ad performance can also be measured in real-time

"Based on a study at the end of last year, the online advertising market in Indonesia was estimated to worth more than US$26 million and we see that tracking towards almost $42 million in 2010," Yahoo's senior director for business development in Southeast Asia Pontus Sonnerstedt said last week.

"We are very aware of the economic situation, which puts advertisers in a tough position in terms of the ad budget," Sonnerstedt said. "That is why it is very important that every rupiah is spent on reaching the target audiences."

According to Sonnerstedt, there are many benefits that online can offer to advertisers in times of tight budgeting during the crisis such as real-time measurability and accountability.

"For example, if you run a campaign today, you can actually measure the clicks and response rate of your campaign in real time. If you don't see results, you can always change your campaign immediately," he said.

"By doing that you can optimize your campaign in real time. In any other media it would be difficult and costly and you can't measure the campaign performance in real time."

Sonnerstedt also said another benefit online advertising could offer was much more accurate targeting of prospects and audiences.

"In the digital space, there are many unique ways that you can do targeting such as location, time and age," he said.

Despite the hefty target growth of around 61 percent for the next two years, spending on online advertisements is still relatively small compared to promotions in other media.

Data from the Indonesian Association of Advertising Agencies (PPPI) and Nielsen media research revealed that advertisers spent between Rp 42 trillion (US$3.6 billion) and Rp 47 trillion last year.

The figure was projected to increase by another Rp 5 trillion this year, spent 60 percent on television advertising and 30 percent on daily newspapers.

Yahoo's survey, done with Taylor Nelson Sofres (TNS), based on about 2,000 individuals in eight Indonesian cities shows only 3 percent of the country's internet users often purchase products online.

However, Sonnerstedt believes that online advertisements will still be an interesting investment for advertisers. "eCommerce, as we saw here is quite limited. But you don't advertise to only sell online, you can also advertise to sell offline as well," Sonnerstedt said.

Sonnerstedt said the key for advertisers to reach their target is to combine online and offline media.

"So far, we have seen that the effect of using online and offline advertising has been very encouraging," he said.

The survey also reveals that internet usage is much higher amongst the young segment with over 64 percent of usage by individuals between the age of 15 and 19.

"You can see a very youthful segment of internet users. That means, internet is the proper media if you want to reach the young market," TNS deputy managing director Suresh Subramanian said. (hdt)

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