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Indonesian adspend picks up

News, 06 February 2017
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JAKARTA: The rate of growth of advertising expenditure in Indonesia doubled in 2016, new figures show, as the economy recovered from several years of sluggish growth.

Data from researcher Nielsen indicated that total spending for the year – based on gross rate card and not including digital – reached Rp 134.8 trillion ($10bn) in 2016. The 14% increase was twice the 7% recorded in 2015.

"Advertising spending in 2016 showed very positive growth," said Hellen Katherina, Nielsen Indonesia's executive director for media monitoring. "After slowed growth a year earlier, market confidence has gone back to what it was used to," she told the Jakarta Globe.

Television accounted for most of the spending tracked by Nielsen, taking a 77% share of the total. And spending on this medium was up 22% on the previous year.

Clove cigarette advertising accounted for a sizeable chunk of TV spending by local companies, but the Government is proposing to ban the advertisement of tobacco-related products on television and radio.

Any restrictions that emerge could be offset by greater integration between digital and TV advertising. And TV will continue to be the most cost-effective way of building salience for new product launches, according to Anish Daryani, CEO of Phibious Indonesia.

Writing for Warc, he recently noted that the country has been "the mecca of start-ups" and that the more established of these would have to turn their attention to brand building.

As many of them are e-commerce-driven, he anticipated that "the bulk of the [advertising] spends will flow into digital, with branded content and native advertising spaces seeing intense activity".

Looking further ahead, Indonesia will be host for the 2018 Asian Games, so Government spending on infrastructure, transportation, and tourism and promoting the games during the course of 2017 will give the economy an additional boost, with adspend set to benefit as well.

Data sourced from Jakarta Globe; additional content by Warc staff

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