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Jakarta Post

Telkomsel ramps up mobile ad service

  • Mariel Grazella

    The Jakarta Post

Jakarta   /   Thu, May 23, 2013   /  12:51 pm

Indonesia'€™s major mobile network operators are expanding their mobile-based advertising services to capture the growing trend among companies to advertise their brands and products through cell phones.

PT Telekomunikasi Selular (Telkomsel) is one of several mobile network operators that are aiming to benefit from mobile advertisements.

 Adrian Suherman, the head of the company'€™s digital advertising group, said in Jakarta on Wednesday that this year alone, Telkomsel expected an '€œexponential growth of 200-300 percent'€ in revenues from the mobile advertisement service as more companies were using mobile advertising to promote their products.

Since Telkomsel launched this service in 2010, the network operator has handled 7,000 clients, he noted. '€œLast year, 30-50 percent of these brands have actively placed repeat orders for our services. And this year, we expect the number of active brands to double,'€ he said.

Adrian said that in 2015, the mobile advertising market was expected to be worth Rp 4 trillion (US$409.6 million) and that Telkomsel sought to absorb 40-50 percent of this market'€™s worth. He noted that the company'€™s digital services, which also includes broadband, delivered 20-25 percent of the approximately Rp 50 trillion in revenues the network operator made last year.

'€œAnd less than 5 percent of the revenue from digital services came from mobile advertising,'€ he said.

Telkomsel, under its digital advertising unit, provides four types of advertising services, including banner advertisements in mobile applications.

Statistics show that Rp 500 billion will be spent on mobile advertising this year, a far cry from the 38.7 trillion advertising budget. However, mobile advertising spending growth is quite high, reaching 80 percent a year.

'€œThe past two years witnessed a significant shift in cell phone usage,'€ he said, adding that cell phones had become an extension of people'€™s lifestyle. '€œAnd brands have taken note of this, and are now finding new ways to engage with their market in more personalized ways,'€ he said.

He added that two main clients for the service were companies in the fast moving consumer good and banking sectors.

'€œThese two sectors combined drove more than 50 percent of our mobile advertising revenues,'€ he said.

Telkomsel is the country'€™s largest mobile network operator, with a base of 125 million subscriptions. Around 54 million subscriptions actively utilized the mobile operator'€™s Internet service.

However, Telkomsel is not the sole mobile network operator to eye the digital advertising market.

Yessie D. Yosetya, the senior general manager of m-finance at PT XL Axiata (EXCL), said that the mobile network operator launched mobile advertising services as well earlier this year, and sought to earn Rp 50 billion from this service.

'€œWe provide direct marketing services, which feature location-based advertising supported by text, images and videos,'€ she said.

She further added that the services enabled brands to actively interact with their audience via games and videos.

Adrian, however, added that mobile network operators still had to educate the market on digital advertising, given the newness of the field.

'€œWe have to tell our clients that spamming does not work and hence, we refrain from providing such services,'€ he said.