28 December 2021

Potentials of Digital Ads in Indonesia

Potentials of Digital Ads in Indonesia

Did you know that we spend about 7-10 hours a day using digital media? For adults, the frequency of daily internet usage is about 8 hours. And the amount of time we spend on the internet is bound to increase over the next few years, as more and more of our activities (whether it’s work or personal) require the support of apps and a decent internet connection. With our lives spent more on the internet, it’s only reasonable for businesses to promote their goods and services there, too – thus, prompting the growth of digital ads. 

Some Facts about Digital Ads…

Lyfe Marketing provided some interesting statistics about digital ads. It was said that globally, 3.5 billion searches are made on google every single day. Of these billions of searches, 35% are made for products. It’s unsuprising to see that e-commerce grows really quickly, since roughly over a billion searches are made for products everyday. These numbers are not only the catalyst for digital ads, but also the evidence that digital ads work. Businesses have been reaching out to consumers with digital ads, and these ads prompt consumers to search for their product.

Why do digital ads gain such popularity? Well, for starters, digital advertisement uses smart tools that can gather, supervise, monitor, and analyze data so that businesses can make effective ad campaigns. From this definition, it can be inferred that the hassle of manual processing of ad-related data is no more. Aside from providing a space for creativity, digital advertising is cost-effective, easy to use, and measurable. In short, in a world where we live our lives online, digital advertising is simply good for business.

Digital Ads in Indonesia

According to data, it seems that Indonesia is still favoring TV as the most prominent media for ads. But the same set of data also shows that it’s likely to change soon. In 2018, only 21% of Indonesian ad expenditure was spent on digital ads. Only 2 years later, the ad spending share rose to 27.8%. This massive growth parallels the growth of Indonesian activity on social media. On top of that, as video-centered social media platforms such as TikTok and Instagram become more popular, video format becomes the core of Indonesian digital ads.

And companies are quick to grab this opportunity. Realizing that the number of Indonesian smartphone users is so massive, about IDR 37 trillion was spent on smartphone-based digital advertising in 2019, according to eMarketer, as reported in Beritasatu. From search engine marketing to the ever so popular social media advertising, the landscape of Indonesian digital ad is heading in a bright direction. And that’s not all. Digital advertising is going to evolve even further with the presence of programmatic ads.

Prospects of Programmatic Ads in Indonesia

Programmatic ads is a relatively new way of computerized, automated advertising which facilitates companies to more effectively reach out to their potential customers. This advertising method benefits from AI support, leading to high efficiency for advertisers. Programmatic ads also give insights for businesses to choose the perfect ad format for their (potential) customers. Compared to “conventional” digital ads, programmatic ads give advertisers more control over the management of ads, reports, and impressions.

As of January 2021, there were 202 million active internet users from Indonesia. In addition to the high usage of social media, Indonesian online news traffic can reach up to 250 million visits per month. Such massive traffic implies an opportunity for advertisers to use programmatic ads. Several studies have concluded that Indonesia will be one of the programmatic ads markets with the quickest growth rate. It is predicted that spending on programmatic ads in Indonesia could grow by 54%, which equals IDR 6.8 trillion. 

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