The state of agencies in Indonesia: 3 must-knows

Majority of advertising services in Indonesia are now in the digital and social media space (74.5%), followed by above-the-line advertising (60.8%), and media planning and buying (37.3%), according to a survey done by the Indonesian Advertising Agencies Association (P3I) Jakarta Chapter. The survey also found that three main groups of clients of the respondents came from the FMCG industry (60.8%), food and beverage (41.2%), as well as finance and telecommunications (31.4%). The survey was conducted online from 25 to 31 August 2020. There were 51 respondents of the survey, all being members of the P3I Jakarta Chapter.

The survey also found that 70.6% of the respondents reported having billings valued above 50 billion in 2019. However, until Q2 of 2020, most companies had not reached their target. Having said that, the majority of respondents (64.7%) had already reached half or more than their 2020 target, while 5.9% have exceeded the target. It is also added that the majority of respondents projected that there will be a decrease in billing compared to last year, while 25.5% said they have the same or higher billing projection as compared to 2019.

Meanwhile, P3I’s survey also found that approximately half of the respondents carried out salary deductions. For companies that have cut wages, majority (31.4%) made cuts at the management level, while 19.6% made cuts across all levels. Meanwhile, 49% of the respondent companies said they did not make salary deductions at all.

The survey also showed that of the respondents, most of the companies (70.6%) are delaying hiring of new employees. On the other hand, 60.8% of them said they did not have any layoffs during this period, while 17.6% said they are still hiring. However, there are also companies that have laid off part of their staff (19.6%), and one company in particular said it laid off most of its employees.  

Looking at the future, most companies (74.5%) said it will be able to sustain business at the end of 2020. Furthermore, 15.7% said the business will be able to grow. Meanwhile, 7.8% of the respondents said they are not able to assess how business will be projected at the moment. Only a small percentage of respondents (2%) said it will be unable to continue with its business. 

When asked what some tips are for companies going through the COVID-19 pandemic, most companies said digital transformation is vital. Some of the other advice include minimising operational costs, building optimism within the company, adjusting prices, adopting new products and services, looking for new business opportunities, as well as maintaining client trust.

Through the survey, it is noted that some respondents hope that P3I, as an association, will help socialise the importance of advertising, lead digital transformation, synergise between agencies, work with the government to distribute jobs, and negotiate for more concrete tax incentives.

Elwin Mok, chairman of P3I, added that the Association of Indonesian Advertising Companies (P3I) said this survey was done to get an overview of the condition of the advertising industry in the midst of the COVID-19 pandemic to know where the agencies stood as we welcome in 2021. Mok said, “Given we middle of a crisis, there are always hidden opportunities, which require creativity to achieve the good for the people.”

Janoe Arijanto, chairman of P3I, said: "Based on the survey, we can see that the advertising industry has been responding to this pandemic in various ways. Because the core business of advertising is creativity, P3I believes that we can overcome the crisis creatively by various forms of organisational innovation, business processes, and new collaborations to deal with the crisis."

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(Photo courtesy: 123RF)

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