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Why top brands in Indonesia are pouring ad dollars into retail media and eCommerce advertising

Why top brands in Indonesia are pouring ad dollars into retail media and eCommerce advertising

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This post is sponsored by Tokopedia.

In a world marked by economic slowdowns, lower market consumption, and marketing budget constraints, marketers are facing an uphill battle in determining the right platform to generate the most return on ad spend. The quest for a high-growth, high-ROI marketing strategy has become more challenging than ever.

The 2023 Annual Marketing Report by Nielsen reveals a stark statistic, with only 54% of marketers expressing confidence in ROI measurement across various digital channels.

In the midst of this challenging landscape, advertising on retail media (eCommerce and on-demand platforms) emerges as a beacon of hope. The latest research from WARC Media projects a substantial 10.2% increase in spending on retail media this year, with a further 10.5% growth anticipated in 2024, resulting in a total investment of $141.7 billion.

This trajectory positions retail media as one of the fastest growing advertising channels. What it means for business is that we are seeing once again the value advertisers place on leveraging first-party data to target the right message to the right person at the right time, which has been the advantage of retail media.

A dominant facet of retail media ads is advertising on eCommerce platforms, also known as eCommerce advertising. In 2023, eCommerce giants Alibaba and Amazon collectively secured a 68% share of global retail media investment, signalling a resounding global surge in enthusiasm and trust in eCommerce advertising.

Ecommerce advertising: Unleashing high ROI through eCommerce’s ability to analyse and predict purchase

Focusing our lens on Southeast Asia, the e-Conomy SEA 2023 report from Google, Bain, and Temasek indicates that there is an increasing demand towards eCommerce advertising. This is highlighted by the significant 43% contribution of advertisements as a driving force behind eCommerce growth.

Moreover, research from Carousel Media Group found that 87% of Asia-based marketers have future intentions to include retail media as part of media planning over the next 12 months.

While Indonesia, Southeast Asia’s largest digital economy country, witnessed a striking surge in the adoption of eCommerce and eCommerce advertising. Projections for 2025 paint a growth of 15% in the eCommerce sector, reaching a total of US$82 billion. This surge has compelled numerous brands to allocate a significant portion of their advertising budgets to eCommerce.

Tokopedia, a major player in the Indonesian eCommerce landscape, is a testament to the impact of this trend. From early 2020 to 2023, there has been a staggering 52x growth in the number of brands investing in Tokopedia’s digital marketing platform – Tokopedia Marketing Solutions.

Among these clients are international heavyweights such as Samsung, Coca-Cola, P&G, Unilever, L’Oréal, Levi’s, and TCL. The results have been astonishing, with Samsung, for instance, achieving an impressive 139% boost in revenue, supported by an 18x Return on Ad Spend (ROAS). Similarly, Indonesia's largest dairy company, Frisian Flag, experienced a remarkable 297% upsurge in orders with a 10x ROAS. Meanwhile, the Lego Group attained a 163% surge in revenue through Collaborative Ads managed by Tokopedia Marketing Solutions.

Edwin Chayadi, vice president of Tokopedia Marketing Solutions, underscores the accomplishments of eCommerce advertising, attributing Tokopedia’s triumph to its adept use of first-party data for discerning current user needs and predicting future purchases.

“In eCommerce, most of the consumer journeys happen on the platform. It allows us to learn and analyse the behavior of our consumers,” he says.

“By capitalising on these insights, Tokopedia empowers businesses, particularly sellers on its platform, to engage with customers highly likely to be interested in their offerings. In parallel, our Lookalike Technology extends the reach of brands by identifying new audiences that mirror the characteristics of the brand's existing customers."

Precision in performance measurement, and the seamless ecosystem

In addition to its vast audience data and insights, eCommerce platforms establish their distinctiveness through precise performance measurement, seamlessly combining store data with media data. Unlike conventional digital marketing platforms that predominantly only gauge impressions and click-through rates, eCommerce advertising offers marketers the unique ability to correlate purchased ads with store sales and orders directly.

The hallmark of eCommerce platforms lies in their closed-loop ecosystems, presenting users with an uncomplicated journey from discovering products to doorstep delivery. This simplicity, bolstered by security and convenience, resonates profoundly with contemporary consumers.

For businesses, this model serves as a vehicle to reach a vast user base without the encumbrance of excessive overhead costs, constituting a compelling selling proposition.

Tailored solutions for diverse marketing backgrounds

Furthermore, eCommerce platforms' marketing solutions have evolved to encompass a comprehensive array of advertising products, capable of accommodating a broad spectrum of marketing objectives. Whether a business seeks to create brand awareness or pursue ongoing performance marketing, eCommerce platforms stand ready to provide customised solutions.

“In today's digital world, advertising on eCommerce platforms is no longer optional – it's a must,” Edwin says.

“This shift reflects how consumers seamlessly integrate the digital experience into every aspect of their lives. Businesses that embrace this change position themselves strategically, gaining a competitive edge. This transformation highlights the adaptability of modern marketing strategies, even in the face of enduring challenges.”

The recognition of the benefits of eCommerce advertising was further demonstrated at the Marketing Excellence Awards 2023 in Indonesia. Tokopedia Marketing Solutions, a digital marketing platform designed to unlock businesses’ maximum growth on eCommerce, won gold in the Excellence in Data-Driven Marketing category and a bronze in Performance Marketing.

A panel of 15 marketing experts, who served as judges, commended it for its proficient utilisation of cutting-edge business intelligence and data analytics to enhance targeting. This innovative approach has led to sustainable growth for thousands of its clients.

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