Opinion: How Indonesian ad agencies can capitalise on inventory to drive domestic bookings

In 2020, APAC’s travel ad agencies are faced with an industry ravaged by the COVID-19 pandemic. Agencies must navigate continuing uncertainty and every dollar spent must deliver ROI. Recently, Indonesia announced that it would not reopen Bali to international travelers until 2021, costing the Indonesian travel industry a whopping US$15 billion to US$16 billion and putting even more pressure on agencies to deliver. But there’s hope. In 2018, eight million tourists from Indonesia spent US$9 billion overseas and 9.8 million domestic tourists visited Bali, with that revenue nearly matching the IDR116 trillion spent by foreign tourists in 2019. 

The changing landscape

Banner blindness is the biggest challenge travel advertisers face. Consumers are inundated with ads, often as many as 4,000 per day, and agencies must determine how to break through the clutter. Now, as available inventory has increased across channels, price points have dropped, putting previously unaffordable inventory within reach. In just five years, the cost of video ads have decreased considerably, dropping as much as 20% to 30%. Given the affordability, Indonesian companies are projected to spend US$159 million this year just on video.

With multi-product and multi-vendor inventory available at lower price points, agencies must change core ad buying strategies. For example, mobile and desktop direct response campaigns that leveraged better quality inventory, such as native or video, tended to be reserved for brand awareness and reach. With the right targeting, this type of rich media can be as effective as display and create new ways to interact with customers. A recent report by Integral Ad Science found that desktop and mobile viewability rates are increasing in Indonesia for both publisher direct and programmatic, giving agencies better quality avenues to find success. In an uncertain market, agencies must leverage every tool in their toolbox to appeal to travellers.

The full-funnel approach

For agencies to take advantage of the changing digital landscape, it is imperative to take a full-funnel approach. The Bali hotel industry is a great example of full-funnel strategies at work. The product is always the same, offering potential guests refuge and relaxation, but price points change depending on the season. Direct response campaigns for most major travel advertisers focus on distribution, such as targeting travelers in a specific location with available rooms at various price points. Brand campaigns are designed for a broader audience, using a combination of display and rich media to tell the brand story and reach consumers at all points along the customer journey. While these give potential consumers a feel of what it would be like to stay at a particular property, there’s a better way for advertisers to choose media mix and measure impact. 

The path to capitalisation

So how do agencies capitalise on the market? A great first step is leveraging social media and other emerging channels. According to a Hootsuite report, YouTube, Facebook, WhatsApp, Instagram, and LINE are the most active platforms in Indonesia. In January 2020, there were 152,890,000 Facebook users in Indonesia, a whopping 55.9% of its entire population. Not only that, 60% of independent hotels say that metasearch is very or most effective for marketing. While most agencies don’t currently offer metasearch, it’s important to stay ahead of the curve and continue evaluating options.

In addition, agencies must focus on internal integration to break down budget silos and train team members around pricing and availability. With more channels than ever, testing strategies will be key. For example, a buyer may still pay a slight premium on native versus display, but it makes sense if the ROI is there.

Thanks to cost-effective multichannel inventory, ad agencies can increase conversions, and offer better value for client spend. By reorganising internal processes and thinking outside of the traditional media buying box, agencies can market across the entire customer journey and capture domestic tourism dollars.

In summary, Indonesian agencies must shift focus to the domestic market, leverage the plethora of available inventory, and enact digital strategies to deliver results like never before. By taking a holistic approach that includes social media channels and metasearch, agencies can win the hearts of domestic travelers and drive bookings. 

The writer is Lina Ang, general manager, APAC at Sojern.