Getting to Know "Smart Ads", One of the Business Models that Warung Pintar is Trying to Optimize

After official acquired SIRCLO Group, Warung Pintar is increasingly developing solutions for millions of retail MSMEs, especially warungs. In July 2021, the company introduced a new service called "Smart Ads", this service focuses on integrated promotional solutions that help brand access hundreds of thousands of stall owners and millions of consumers, and enable shop owners to earn additional income.

Warung Pintar's internal research results show more than 80% of marketing funds brand focused on modern markets, leaving only 20% of marketing funds for traditional retail markets such as warungs. This is because the layered traditional ecosystem creates various limitations in the process monitoring marketing program so that the majority brand reluctant to use warungs as an effective marketing channel.

Meanwhile, from the side of the shop owner, the marketing program brand often considered not to provide fair compensation due to the lack of transparency. Based on this data, Warung Pintar decided to start working on the Smart Advertising solution in order to encourage the use of warungs as a marketing channel of choice for various types of brands in Indonesia, ranging from multinational to local products.

Basically, the practice of placing advertisements in stalls has been exploited by brand since decades ago. However, in the process, the field team still has to go from stall to stall to offer programs and carry out monitoring program results manually. With the number of stalls that are not small as well as the energy and costs that must be incurred for the process monitoring manual, this concept becomes inefficient and effective.

Trying to answer these challenges, Warung Pintar, through its advertising products, seeks to offer efficiencies for consumers brand in reaching its target market, from shop owners to final consumers. Through a more effective and scalable platform, Smart Ads offers two ad formats, either offline nor online (in-app).

Format online advertising and in-app activation targeted at shop owners, brand can do promotions online in the Warung Pintar application and other available platforms. Temporary, offline placements allow brand to directly reach the end consumers through promotional assets offline in stalls that have joined Warung Pintar, the form of marketing can be through the installation of brand assets, product placement, offline activation and various forms of promotion offline other.

To be able to enjoy this service, the fee charged to brand is worth Ro5.000 - Rp10.000 per consumer/stall data. There is a separate dashboard to monitor running programs. In addition, this platform also facilitates constructive discussions between the brand and Warung Pintar in program planning and target segments including demographics, types of stalls, and the area/location around the stalls.

Co-Founder & CEO Smart Shop Agung Bezharie Hadinegoro said, "Smart Ads are here not only to build loyalty stall owners to certain brands, but also generate real social impact by providing fair and more transparent incentives for shop owners. We hope that the Smart Ads service can be a trusted solution for brands to transform marketing channels to be more effective and efficient.”

To date, the Smart Ads service has enabled dozens of brand well-known brands such as AX, Kimbo, Sariwangi, ABC Coffee, Good Day, Kopiko, Danone, Bango, Coca Cola, and others to connect with the warung ecosystem in Indonesia.

The brand's participation in Smart Advertising also helps in making a real impact for more than 500.000 stalls in the Warung Pintar ecosystem in more than 200 cities. This initiative is also claimed to have provided incentives for shop owners of up to IDR 300.000,00+, about 7,5% higher than other marketing channels.

Smart Advertising is implemented inclusively by utilizing the integrated stall ecosystem. Smart Ads penetration is said to reach 400%, higher than other platforms. Even so, judging by the service's operation which is still relatively new with several features still in the pilot stage, there are several things that can still be developed such as the speed of account management, operational costs which are considered quite expensive, as well as technical literacy schemes in the field (changing from offline ke online).

Solution adtech in Indonesia

In recent years, there has been a shift in the advertising industry towards the use of advertising technology (adtech) well online as well as in more traditional settings. Startup adtech Indonesia is taking advantage of the country's growing population and increasing use of the internet and mobile phones to market products and services.

Based on data from Statista, the total value of the advertising market in Indonesia in 2018 was around $2,57 billion and is projected to increase to $5,3 billion by 2024. Technology has changed the landscape by bringing greater efficiency to the way companies spend their advertising.

Even though, startup adtech Southeast Asia still faces several challenges, such as insufficient investment, the tendency of consumers to switch to new channels, and increased competition due to increasingly sophisticated technology. Plus the pandemic situation that creates a lot of uncertainty but also opportunities in today's business world.

As the existing business develops, solutions adtech also designed "embedded" into a platform that has a large user base. For example, on the platform online marketplace Tokopedia, merchants can advertise their products to specific target users. The trend is that more and more applications with large user ecosystems will make this digital advertising model one of their business models.