Identifying new revenue streams will be an important part of future growth for the likes of Grab, Go-Jek and Tokopedia. (Antara Photo/Raisan Al Farisi)

Adtech Could Unlock Multimillion-Dollar Revenue Streams for Indonesia’s Super Apps


MAY 30, 2019

Indonesia is home to some of the region’s largest super apps, including ride-hailing app Go-Jek and e-commerce platform Tokopedia. Combined, these super apps have millions of daily users, but in many cases their businesses still struggle with high levels of cash burn.

Identifying new revenue streams will be an important part of their future growth – and that's where adtech could help.

A super app can be described as a self-contained network, such as ride-hailing apps (drivers and passengers) or online marketplaces (buyers and sellers).

In November, Bloomberg described these apps as unique in their ability to allow users to "communicate, shop online, order rides, read books, play games, get food delivery and pay for anything within a single, unified smartphone app." 

Users of these super apps, particularly in Indonesia but also across Asean, are consuming content and completing transactions directly within the app without ever going to a website.

A New Type of Publisher

For advertisers looking to the high-growth emerging market of Indonesia, super apps represent an appealing new type of publisher that is sitting on vast troves of user data related to browsing preferences and buying decisions.

Backed by billions of dollars in funding, these super apps have amassed millions of users, becoming as powerful as many traditional publishers – news portals, magazines, TV stations – as a channel for advertisers who want to target specific consumer profiles.

So how would adtech work for Indonesia’s super apps? We can use one of the country’s leading mobile shopping apps, Tokopedia, as an illustration.

If Tokopedia introduced programmatic advertising on its platform, we estimate it could add tens of millions of dollars a year to its revenues.

That's based on capturing just 1-5 percent of Indonesia's digital advertising market, which is expected to be worth $2.6 billion this year – not impossible considering the company already has 10 million daily shoppers, four million merchants and is valued at $7 billion.

Two Examples

Internal placement auctions would allow for real-time bidding (RTB) to determine to price and sequence of listings displayed by merchants – those who bid higher amounts would be more likely to show up at the top of search results.

For example, if you are a fashion outlet selling scarves on the platform, you could set the amount you're willing to pay for clicks or impressions associated with specific search terms, thereby determining how visible you will be to people searching in the relevant fashion categories.

In this case, pay more and you will appear nearer the top of the scarf listings – pay less and you will still be visible but it will take users longer to scroll through competitors' offerings before they find yours.

In the event that Tokopedia runs out of ad inventory, it could leverage the adtech network to have those ad requests fulfilled by external placements on partner networks (i.e. websites where clicks on the ad bring shoppers back into the Tokopedia listing for purchase).

For ride-hailing apps in Indonesia, such as Grab or Go-Jek, there are a few ways they could implement adtech to help grow their bottom line and reduce cash burn.

A passenger who regularly travels to and from the town center, for example, at specific times of the day (i.e. commuting to work) could find it relevant to be served an ad on a new mall opening on their route home.

There may be a new Italian restaurant opening in their neighborhood, which Go-Jek's advertisers want them to know about. Based on their food delivery preferences pulled from the Go-Jek app, Italian has been highlighted as one of their preferences, making it a relevant ad for them.

This could work on a simple cost-per-impression basis, allowing restaurants and other location-based businesses to target users of ride-hailing apps based on their travel habits.

Another implementation of adtech, in this case, could be in the form of real-time bidding (RTB) engine for drivers.

Under such a scheme, drivers would be able to bid for rides – those that were willing to pay more for customer acquisition (i.e. a winning ride) would receive more leads.

A Healthier Indonesian Super App

These are just some of the ways Indonesia's super apps could implement adtech to support their bottom-line growth.

Even based on conservative estimates, it could easily add tens of millions of dollars per year to their revenue streams, turning them into more viable businesses as they move from growth to mature-stage companies.

Joanne Joynson-Hewlett is the chief executive of Pocketmath, a leading mobile adtech company based in Singapore.