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Jakarta Post

Ad spending plunges as companies reduce marketing activities amid outbreak

  • Dzulfiqar Fathur Rahman

    The Jakarta Post

Jakarta   /   Wed, May 13, 2020   /   04:25 pm
Ad spending plunges as companies reduce marketing activities amid outbreak An outdoor advertisement at an office building at the Sudirman business district, Jakarta appeals the people to stay home to halt the spread of the coronavirus (JP/Wendra Ajistyatama)

Indonesia’s advertisement spending dropped sharply in April as most big ad spenders reduced their marketing activities amid the coronavirus outbreak.

Nielsen Indonesia, a data and measurement company, reported on Tuesday that total ad spending fell 25 percent month-to-month to Rp 3.5 trillion (US$235 million) in the third week of April, after a steady increase prior to the COVID-19 outbreak.

Of the 15 major advertisers during last year’s Ramadan, only four companies raised their ad spending this year. E-commerce company Shopee Indonesia increased its spending by 18 percent year-on-year (yoy), syrup brand Marjan Boudoin by 82 percent, instant noodle manufacturers Indomie and Sedaap by 24 percent and 4 percent, respectively.

Cigarette manufacturer Djarum, online ticketing firm Tiket.com and online ticketing and hotel booking firm Traveloka, among other companies, each cut their ad spending by 100 percent in the first week of Ramadan compared with a year earlier.

“Many companies are no longer advertising because they are not relevant to Ramadan at home,” the executive director, Hellen Katherina, said in a virtual briefing on Tuesday. “Online ticketing firms such as Traveloka and Tiket.com advertised aggressively for last year’s exodus. But there may not be any exodus this year.”

Under the social restrictions imposed to contain the coronavirus, the traditional exodus leading up to Idul Fitri, in which around 18 million people traveled to their hometowns last year, is not allowed.

In April, the 10 largest advertisers were mostly food and beverage companies and online service providers. The ad spending for NutriSari, a beverage brand produced by PT Nutrifood Indonesia, was raised 1,179 percent yoy to Rp 307 billion, the largest during April. It was followed by online stock trading platform Binomo.com with Rp 286 billion and Marjan Boudoin with Rp 231 billion.

Nielsen Indonesia also reported that its total spending on television advertising had been recovering since May 1, nearly a month after Jakarta first introduced the large-scale social restrictions.

Since people have been staying at home, television views have gone up 12 percent on average and 14 percent among the upper-class group, since the government started ordering people to work from home in mid-March through mid-April.

“During the stay-at-home period, the upper-class group who usually spend their time outside, now have more time to spend at home watching television,” said Hellen.

However, marketers are moving their money from television to digital advertising. In 2018, total spending on digital advertising grew 18 percent yoy, far higher than the 2 percent growth rate of spending on television advertising, according to a 2019 report by the Mobile Marketing Association (MMA).

Ekhel Chandra Wijaya, the external communications senior lead of e-commerce company Tokopedia, said his company was shifting focus to supporting the government’s coronavirus response, and thus had to make adjustment in various aspects including marketing.

Tokopedia, the second-most-visited e-commerce website nationwide, lowered its ad spending by 40 percent yoy to Rp 115 billion in the first week of Ramadan, according to Nielsen Indonesia.

“We are emphasizing higher effectiveness in marketing from message, audience, channel and support for business sustainability,” Ekhel told The Jakarta Post on Tuesday.