Mobile Advertising in Indonesia Lags Far Behind Consumption

lumia 1020 displayed at launch in jakartaAdvertising spending in Indonesia is not in sync with media consumption according to data from Millward Brown and Zenith Optimedia. In a post on Medium, CEO of mobile company Jana, Dr. Nathan Eagle, pointed out the findings while highlighting the importance of prioritizing mobile consumers which presents an opportunity worth $80 billion. The difference between the statistics cannot be more striking.

While spending on television ads comprises 55% of the total ad spend, advertisers in Indonesia only spend 0.00142% on mobile even though consumers are spending 10% more of their time using mobile devices than watching television. Unfortunately the numbers do not show time spent on overlapping media consumption.

Dr. Eagle compared this discrepancy with that of other countries such as Brazil, India, Russia, and the Philippines, where it is similarly observed. Most advertisers are ignoring the mobile audience in favor of more traditional media, specifically television, despite mobile being the more dominant media in terms of consumption time. Dr. Eagle said, “eighty billion dollars is the cost to an industry that has not yet acted on the scale of the mobile opportunity in the world’s fastest-growing markets”.

Indonesia advertising spend

Back in April 2014, Zenith Optimedia projected share of global mobile advertising spend to nearly triple from 2.9% in 2013 to 8.6% in 2016 while TV ad spend is expected to decline by 1.06% although it’s from 39.6% to 38.3%. In terms of numbers, mobile advertising is expected to contribute an additional $35 billion in growth to exceed $52 billion in 2016.

While the numbers are different to eMarketer’s August 2013 forecast of 2016 global mobile ad spend, it nonetheless shows a similarly modest share compared to spending on television ad.

In other words, while advertisers may be looking to do more on mobile, the attraction of television remains far too strong for them to embrace mobile more significantly thereby keeping it in a niche position.

In an encouraging sign though, an 8.6% spending on mobile means it exceeds spending on outdoor, magazine, radio, and cinema advertising, none of which are expected to reach more than 7% share in ad spend according to Zenith.

For Dr. Eagle however, keeping mobile ad spending disproportionate to consumption means that “advertisers are failing to connect with the consumers that will drive consumption over the next decade” because in 2016, consumers in emerging markets, who tend to be very highly connected through mobile devices, “are expected to contribute approximately half of the world’s global spending — about $30 trillion”.

Dr. Eagle is arguing that advertisers should “structure their budgets to represent the media habits of the emerging global middle class”. In other words, going in hard into the mobile market and discover more opportunities.

Although time spent or screen time may be higher on mobile, Millward Brown’s AdReaction 2014 study found that 41% of respondents are more favorable to TV ads while only 23-25% are favorable to ads on tablet, smartphone, or computer. While this does justify the higher spending on TV, it shows that significant opportunities remain in mobile advertising that brands are ignoring, far more than what are being seized at the moment.

So how can brands embrace the mobile audience in a more effective manner? In December 2014, worldwide CEO of Zenith Optimedia Steve King said that advertising on social media is a strong example of how brands can connect to mobile consumers effectively “and we expect mobile marketing to develop further as other media learn from this example”.

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Aulia Masna

Pretty much anything you want to do in life involves a pitch, so why not dig deeper into the world where everything hinges on the pitch? Advertising is not just an industry, it's a lifeline of many industries. See it, love it, hate it, embrace it, criticize it, do it.

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