Next year, companies in Indonesia will be spending more on native advertising, particularly sponsored content, experts say. (Photo courtesy of GetCRAFT)

Future of Indonesia's Marketing Is in Native Ads: Experts Say


NOVEMBER 07, 2017

Jakarta. Next year, companies in Indonesia will be spending more on native advertising, particularly sponsored content, experts say.

"There is a strong trend in the Indonesian market [indicating that] display ads are getting pushed out by native ads, there is a shift," PHD Media managing director Roy Simangunsong said during the Jakarta Content Marketing Meet-Up at William's Dining in Jakarta on Nov. 1.

Companies start to doubt in the effectiveness of display ads, because ad-block services prevent them from reaching potential clients.

According to Roy, people prefer receiving information about brands through more subtle or friendly messages rather than aggressive campaigns, therefore brand companies and publishers need to improve their marketing techniques to produce "creative value that attracts more consumers." Native ads that are oriented on light users usually increase sales by 30 percent, if oriented on heavy users (who purchase a much more) they only increase sales by 10 percent.

Dian Gemiano, general manager of marketing at publisher Digital Kompas Gramedia, estimates that the company's native ads revenue can grow up to 80 percent in 2018 from 10 percent in the past three years.

"We are very optimistic because this is not a regular type of advertising, it's based more on innovation, content marketing and performance," he said, adding that next year will be one of the toughest, as predictions indicate the economy will stagnate. However, important events such as next year's elections, the Asian Games and the World Cup can help online media expand the market.

There is also a need for brands and publishers to improve their collaboration, as miscommunication happens too often — companies want to control the brand messaging as much as possible, while publishers want to check the value of the content offered to readers.

Publishers complain that companies are still clueless about how native ads work, as the use of the content may create a "halo effect" on the brand rather than directly advertise it.

"Publishers' arguments are too focused on their point of view, because advertisers usually don't deliver their challenges and goals well. In the end we have to see it from the customer's perspective," Dian said.

According to Anthony Reza, chief executive of content marketing network GetCRAFT Indonesia, brand companies need to trust their content partners more, as when they seek to control it, they contradict the very definition of native advertising.

He added that there needs to be a set of key performance indicators such as views or clicks, before a campaign strategy is planned. Yet if companies still feel uncomfortable with publishers, they can rely on more organized processes offered by marketing agencies.

According to GetCRAFT's "Indonesia Native Advertising & Influencer Marketing Report 2018", brands earmark 20-30 percent of their total media budgets for native advertising.