JAKARTA, Dec 13, 2019, The Jakarta Post. With 64 percent of its total population connected to the internet as of last year, Indonesia is likely to become the country with the third-largest number of smartphone users, at 410 million, by 2025, making it a huge market for mobile advertising, according to recent research, The Jakarta Post reported.
Mobile advertising in Indonesia is expected to have grown by 34 percent in 2019, the fastest rate in the world, Mobile Marketing Association (MMA) Indonesia says in a report.
MMA Indonesia Asia-Pacific program director Azalea “Zela” Aina said on Wednesday that the total value of the country’s mobile advertising would reach Rp 98 trillion (US$7 billion) this year and would grow by 7.9 percent to Rp 105 trillion in 2020.
As more and more people changed their primary devices to smartphones from laptops and tablets between 2014 and 2019, marketers turned to mobile advertising, spurring the growth of the mobile advertising market, she said.
For comparison, spending on television advertising in 2018 grew by 2 percent, far lower than the 18 percent for total spending on digital advertising in general.
Some 50 percent of the total spending on digital advertising in 2018 was on search engine and social media platforms, namely Google, YouTube, Facebook and Instagram, according to the research.
The use of social media platforms for mobile advertising was in line with the trend of Indonesians’ three-hours spent daily on social media, one-hour more than the daily time spent watching television, Zela said.
Ride-hailing app Gojek’s chief commercial officer, Antoine de Carbonnel, said, “10 years ago, almost all companies only used television and print for advertising. Now the majority of companies use digital marketing.”
He said that 19 percent of companies’ total spending on marketing was for mobile advertising.
The research shows that mobile advertising allows marketers to deliver their advertisements to a well-targeted audience in the right context.
Malaysian airline Air Asia, for example, uses targeted advertising services from media agency Mindshare Indonesia to deliver advertisements based on people’s latest destination search, according to the research.
Zela told reporters that companies collected their consumers’ data via mobile apps and used the data for targeted advertising.
“If my data show that I have gone to Komodo Island, I may see an advertisement from an online airline-ticketing and hotel-booking services company on my social media feed,” she added.
The value of the country’s targeted advertising market is expected to grow by 89 percent to reach Rp 7 trillion this year, making it the fastest-growing country in terms of targeted advertising, followed by India, Brazil and some European countries, according to the research.
Well-targeted mobile advertising is gaining ground, in line with the trend in consumer spending behavior on mobile apps during online shopping fairs.
In the Dec. 12 online shopping fair Harbolnas, for example, 54 percent of the total transactions were made via mobile apps, according to research by online advertising company Criteo.
However, mobile advertising is facing a challenge as it has yet to have a measurement of its marketing impact in terms of return on investment, according to De Carbonnel.
“It’s increasingly important to be able to measure when you’re thinking about return on investment of marketing. It’s very difficult to actually measure what comes from your billboard, from your TV and your mobile marketing,” he told The Jakarta Post, adding that MMA Indonesia would be focusing on formulating the measurement next year.
Another challenge facing marketers of mobile advertising is the bleak economic outlook.
The majority of marketers in general, of whom 20 percent were Indonesians, for example, considered their marketing efforts to be affected by slow to modest economic growth in Southeast Asia, according to a survey by digital marketing agency Analytic, Data, Advertising (ADA).
The International Monetary Fund (IMF) recently downgraded its economic growth projection for Asia to 5 percent from 5.4 percent in 2019 and to 5.1 percent from 5.4 percent in 2020.