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Jakarta Post

Online companies spend agressively on advertisements

  • Khoirul Amin

    The Jakarta Post

  /   Thu, August 20, 2015   /  04:19 pm
Online companies spend agressively on advertisements

Online companies have joined the list of the country'€™s top advertising spenders in the first half of this year, spending trillions of rupiah on TV and print advertisements, according to a recent study by market research firm Nielsen.

The study, which sourced data from Nielsen Advertising Information Services, has revealed that Internet-based companies in the country have spent around Rp 1.3 trillion (US$93.9 million) in the January-June period of this year, nearly five times their spending of only Rp 267.7 billion in the first half of 2011.

'€œThe mushrooming e-commerce businesses in the country has become a key factor in the surge of advertisement spending by Internet-based firms in recent years,'€ said Nielsen Indonesia media executive director Hellen Katherina.

Home to 250 million people with growing number of Internet and smartphone users, Indonesia is deemed an attractive market by many e-commerce players.

The country'€™s Internet penetration has hit 35.66 percent as of the first semester of this year and smartphone ownership has almost doubled from 14 percent in the first six months last year to 26 percent in the same period this year, according to Nielsen data.

Nielsen'€™s recent study on advertising spending, which pulled data from commercial ads on 14 national free-to-air stations and over 250 print media, has shown that online companies joined the list of the top 14 ad spenders on free-to-air TVs and posted the second highest growth for TV ads spending in the first half.

The online companies'€™ TV ad spending grew by 43 percent year on year (yoy) to Rp 1.18 trillion in the January-June period of this year, with emerging e-commerce players taking a lead in the spending.

Online ticket-booking site Traveloka spent Rp 376.3 billion on TV ads during the period, followed by online marketplaces and with TV ad spending of Rp 187.4 billion and Rp 149.2 billion, respectively.

In 2013, TV ad spending by online businesses was much more dominated by mobile messengers, such as LINE, KakaoTalk and WeChat, Nielsen data has shown.

However, consumer goods were still the most promoted products on the screen.

Clove cigarettes broke a new record, surpassing other consumer goods with TV ad spending of Rp 2.2 trillion in the first semester of this year, a 49 percent growth from the same period last year.

Cigarette companies might be spending more of their advertisement budget on TV as smoking advertisements on billboards had been prohibited in the Jakarta area, said Hellen.

Hair care and beverage products came second with total spending on TV ads hitting Rp 2.06 trillion
and Rp 1.82 trillion, respectively, with consumer goods giants like Djarum, Sampoerna, Danone, Unilever and P&G staying as the highest spenders on TV ads, Nielsen data has shown.

Reza Priyambada, head of research at NH Korindo Securities, said earlier that while many companies might be less aggressive in ad spending amid economic slowdown this year, consumer goods firms would still try to exploit the seasonal opportunities, such as the Ramadhan fasting month and school holiday seasons.

Overall, ad spending growth in the country hit Rp 57.16 trillion, only showing single-digit growth in the first half of this year, a low level compared to usual double-digit growth during the same period in previous years.

TV ads grew by only 9 percent to Rp 41.04 trillion in the first half of this year from Rp 37.58 trillion in the same period last year, while ads in print media declined by 8 percent yoy to Rp 16.12 trillion in the first semester of this year.

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