Television advertising in Indonesia took a nosedive in 2015 with the economy growing slower than anticipated. With a three weeks to go in 2015, television advertising monitoring company Sigi Kaca Pariwara reports that the industry is still short more than Rp 30 trillion (US$ 2.1 billion) to match last year’s achievement and it’s only going to meet less than 63% of the target by the end of December.
In 2014, Indonesia’s advertising revenue rose to its highest level reaching Rp 150 trillion (US$ 10.7 billion). This was driven primarily due to a number of major events, namely the legislative and presidential election campaigns as well as the resulting aftermath which spanned from January to October, the FIFA World Cup in the middle of the year, and the Ramadan festivities. Television advertising made up 66% of the total spending. Buoyed by this growth, P3I national chairman Harris Thajeb projected in 2014 that the national advertising spending for 2015 would reach Rp 172.5 trillion and television ads would make up Rp 113 trillion of the total spend, or 65%.
In 2015 however, all this came crashing down as the economy slowed due to lack of government spending resulting in general economic uncertainty. Nielsen media director Hellen Katherina explained in September that between 2014 and the first half of 2015, government spending was down to half of what it was between 2010 and 2013. The impact to the private sector was significant.
Television ads in 2015 is expected to reach only Rp 71.4 trillion, far below Thajeb’s expectations, and lower than 2013 which was Rp 81.8 trillion. As per November, television ad spend only managed to reach Rp 65.5 trillion, leaving a massive gap if the industry were going to match last year’s numbers. With an average of Rp 5.95 trillion per month, that is simply not going to happen.
This decline was apparent during this year’s Citra Pariwara with less than a handful of TV ads receiving trophies during the festival. This was made even worse by the fact that the three ads awarded as the top ads of the year were all from a single company, compared to five ads from six companies in 2014. In terms of finalists, there were 39 television ads that made it past the submission stage last year whereas in 2015 there were only 23.
Flex Films was named production house of the year at Citra Pariwara this year, with three trophies for its work. While this is still an achievement for the company, in 2014 it received four trophies with two other submissions qualifying as finalists. The top award in 2014 went to LynxFilms with six trophies along with 12 finalist submissions. In other words, Flex Films achieved less in terms of quantity in 2015 compared to last year yet it managed to be this year’s top production house. That itself is a sign that the industry has fallen behind.