Indonesia's ad marketing is expected to grow by 11.5% this year to reach IDR108.3 trillion. According to a global ad forecast by Magna, digital ad sales will increase by +20% to reach 43% of total budgets, approximately IDR 47.0 trillion. This comes after 2020's +11.8% performance and reflects a consumer base that is rapidly embracing streaming video and eCommerce solutions.
Much of the growth, Magna said, is driven by mobile device spending (+28% to 64% of total digital budgets). By format, growth is led by social (+26%), search (+17%), and video (+27%).
By 2025, Magna said digital advertising will have continued to gain share and will represent 53% of total budgets, surpassing the spending of linear media formats.
This is in line with the overall trend in Asia Pacific which sees digital advertising powering total market growth. Magna said search (+19%), social media (=24%), and video (21%) remain the growth engines of the region's digital ad market, while static banner formats show only modest growth (+3%).
Meanwhile, Indonesia's GDP is predicted to increase by +4.3% on a real basis in 2021, following 2020's -2.1% real GDP decline. This is despite COVID cases in Indonesia remaining around 5,000 daily. Additionally, Magna noted that only 6% of the Indonesian population is vaccinated against COVID-19, which creates uncertainty for deploying budgets this year.
In this environment, linear ad spend in Indonesia is predicted to increase by +6%, following 2020's -19% growth. This includes TV increasing by +5.9% to reach IDR48.7 trillion, and OOH growing by +39% and almost regaining 2019 totals. Radio, however, dipped sharply during the COVID-19 crisis and will still be less than half the size it was pre-COVID as a result of driving mobility never significantly recovering ahead of COVID-19 levels, Magna said.
As a whole, while Asia Pacific's linear ad spend will bounce back in 2021 due to the weak growth comparison, Magna said linear ad sales are still in a long-term decline.
By 2025, linear advertising sales will represent just 28% of total ad sales in APAC, down from 38% of budgets today, the report said.
Meanwhile in Thailand, linear ad revenues are expected to increase by +5.3%, a small bounce relative to the -18% declines seen by linear formates last year. TV, which still represents a huge portion of total ad budgets (55%) in the country, is expected to grow by +5%, Magna said and only reach 93% of 2019 spending levels. Similarly, OOH is expected to grow by +16.5% but fall short of 2019 spending totals (92% of prior highs), Magna said.
According to the agency, Thailand's economy will expand by a relatively weak +2.6% on a real GDP basis, following 2020's -6.2% real GDP decline. Unlike many markets where 2021 growth more than offset declines in GDP last year, Magna said Thailand will remain weaker than prior total spending.
This is partially because COVID-19 cases in Thailand have increased in the first part of 2021 to 2,500 per day after essentially being zero for the entirety of the crisis before now. Less than 5% of Thailand's population is vaccinated against the pandemic and the Thai government has begun setting up emergency hospital beds in Bangkok and Chiang Mai to combat case spikes. Meanwhile, ad revenue for media owners is expected to increase by +9% this year to reach THB124.7 billion, regaining much of the spending lost last year (-12.9% growth).
Likewise, digital ad formats will continue to see robust growth despite the new COVID-19 wave. According to Magna, ad revenues in this sector will jump by +23% to reach 24% of total ad budgets. This is up from 16% as recently as 2019 as the COVID-19 crisis reshapes consumer behaviour. By format, search (+26%), video (+16%), and social (+32%) will lead growth.
Digital still represents just a small portion of the total ad spend in Thailand, however. Within digital advertising, growth will be driven by mobile devices (+30% growth to reach 77% of total digital revenues).
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