Outlook on Adtech in Indonesia in 2019

The digital advertising industry in Indonesia is growing very fast. Report “2019 Global Digital Advertising Trends” not only predicts that Indonesia's digital advertising spending will reach $2,6 billion in 2019, but also states that there will be rapid growth of 26%. This figure beats growth in other ASEAN countries, including Thailand.

In terms of programmatic advertising, the "superior" category in the adtech world, the Indonesian market has shown an extraordinary good performance and its growth is in line with global trends. In this report, the total growth rate of segment advertising spending is estimated programmatic advertising in Indonesia will reach 89% compared to last year. This makes this archipelagic country the fastest growing country in the world.

While the statistics presented above may sound overwhelming, the reality is that they are not quite as attractive and optimal. After we experienced firsthand digital advertising in Indonesia for many years, the Tagtoo team concluded three points against the actual view adtech in Indonesia in 2019.

The point of view on adtech in Indonesia is still fragmented

In Indonesia, there are no major adtech players in the field of programmatic advertising which is gaining significant market share as Indonesia shifts its growth focus towards the digital economy. The competition between foreign and local adtech companies makes the point of view or picture of the adtech industry still fragmented.

The split picture is in fact reasonable. Foreign companies find it difficult to get a strong and stable position in Indonesia because of the business culture under the table in Indonesia and strict regulations from the government for the ownership of foreign companies. Meanwhile, local companies are still struggling to keep up with foreign companies by developing leading technologies.

The magnitude of the difference in knowledge about digital marketing

As Indonesia moves into a new digital era, business owners and entrepreneurs are becoming more savvy and open to new technologies. The power of performance-oriented adtech will be indispensable as it plays a very important role in the development of the digital economy.

Therefore, Indonesia will face a fairly large gap in the field of digital marketing science. Big companies and local unicorn startups will continue to be able to adopt the latest adtech products and services thanks to their strong capital reserves.

On the other hand, small and medium-sized companies are still struggling to survive and thus have no chance to master digital advertising marketing. They will continue to fall behind from day to day.

Immature infrastructure holds back industrial progress

Even though Indonesia has 171 million inhabitants Internet users in 2018, according to the Association of Internet Service Providers in Indonesia, imperfect internet infrastructure will continue to be a major barrier for adtech to develop at maximum performance.

Examples of metrics conversion rate, a general metric that takes the percentage rate of visitors website to measure the performance of digital marketing ads. Slow page loading times are sometimes the driving factor for dropping ratings conversion rate, instead of mistargeting the market.

The problem isn't just how effectively adtech can help target the market, but conversions won't happen if the user loses patience and leaves the page. website before the content is displayed in full.

Conclusion

The point of view of digital advertising will continue to change in Indonesia. With more and more companies and startups trying to strengthen their online networks and increase their online sales, the demand for digital advertising will certainly be even greater in the years to come.

Most importantly, after following the digital advertising trend, the Indonesian adtech community will become an interesting game to watch; who will be able to survive till the end and win the top spot?

- This article was written by Edison Chen at Tagtoo blog. Translated by Sherly Venesha