Digital Advertising Segment in Indonesia Estimated to Reach 8,8% Total Market Share in 2017

According to the data we obtained from Redwing, advertising spending in Indonesia still achieved healthy growth in all media lines until 2017 with a growth of 15-17% per year. Although the current pie is still small, the digital advertising segment is expected to continue to grow market shareto 8,8% (with a nominal value of $1,6 billion or IDR 18 trillion) in 2017.

market share advertising revenue in Indonesia is still dominated by national television media, which accounts for more than 60%. Currently 95% of national television media is controlled by four big business groups. This revenue was followed by the print media line which, although starting to slow down, still recorded growth. In addition to national television, the pay television segment (such as cable TV) also increased its advertising share.

The growth of the advertising market in Indonesia is driven by the increasing number of people belonging to the middle class, thus encouraging more aggressive consumption, and competition from local and multinational FMCG companies to build product branding for the latest generation.

Returning to the digital segment, in 2013 revenue in this line reached $300 million (3.1% or IDR 3,5 trillion) and this year it is estimated to be $500 million (5.1% or IDR 5,84 trillion). The digital segment is predicted to penetrate milestone $1 billion in 2016 and continues to increase to $1.6 billion (8.8%) in 2017. As a comparison, in 2013 digital advertising in the United States reached about 22% of the total market share and globally the digital advertising market in that year achieved an average growth of 10%.

In 2016 there will also be milestone new to mobile advertising that hit $100 million (approximately $1.2 trillion). Growth in the mobile realm is expected to increase in line with the implementation of 4G technology in Indonesia (starting next year) which will encourage faster access, especially for video advertisements, through mobile devices where the number of consumers is far greater than television viewers or print media subscribers.

Reflecting on the data collected by Redwing, the main driver of the acquisition of advertising cakes for the digital and mobile segments is the faster quality of Internet access, both via cable/wired technology.fiber optics and cellular technology, for the general public. Given that Internet speed growth has not been as fast and evenly distributed as developed countries, it is natural that advertising growth in this segment in Indonesia has not been as fast as in these countries despite having healthy growth.

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