Ad Spending Slows, but Advertiser Confidence Picks Up: Nielsen


NOVEMBER 22, 2017

Jakarta. Advertising spending slowed in the first nine months of this year compared to the corresponding period in 2016, with political advertisement leading the pack ahead of the 2019 presidential election, a report from Nielsen Advertising Information Services showed.

Advertising spending in the country grew eight percent to Rp 107.7 trillion ($7.96 billion) between January and September this year, up from Rp 99.8 trillion in the corresponding period last year.

However, the growth was slower than a 15 percent growth in the first nine months of last year.

According to the executive director and head of media monitoring business at Nielsen Indonesia, Hellen Katherina, ad spending in the first quarter this year grew slowly as business players and investors took a wait-and-see approach.

However, the improvement of the domestic economy in the third quarter had boosted business players' confidence, encouraging advertisers to pay for more ads in local media.

"The Islamic fasting month in the second quarter also helped to boost advertising spending growth this year," Hellen told reporters at a press briefing in Jakarta on Tuesday (22/11).

Nielsen gathered and monitored advertising spending from 15 national free-to-air television stations, 99 newspapers and 123 magazines and tabloids. The advertising spending is calculated based on gross rate card and promotions, disregarding discounts and other marketing gimmicks.

Advertising spending on television continues its dominance, contributing to 80 percent of total spending on advertisement in the period, or equivalent to around Rp 85.7 trillion. The figure increased 12 percent compared to the same period last year.

Although government and political organizations still top the list as the biggest advertising spenders in the first nine months of this year, in which they spent a total of Rp 5.4 trillion, the number was down nine percent since the corresponding period last year.

Haircare ad spending grew by 16 percent to Rp 5 trillion, while telecommunications services and devices managed a 33 percent increase to Rp 4.7 trillion.

City development project Meikarta — a by Lippo Group development — was the biggest advertiser in the period, spending Rp 1.2 trillion in the two months since August, followed by online booking Traveloka (Rp 871.6 billion) and Indomie instant noodle (Rp 767.2 billion) between January and September.

Ahead of the 2019 election, political ad spending may soar still in the coming years.

Nielsen data showed that by the end of 2015 political parties still dominated ad spending throughout the year, when Indonesia held its first simultaneous regional elections.

"We do not have any projection for the upcoming 2019 election year, but we see that TV still dominates political ad spending in advanced countries," Hellen said.