Ads from the advertisers' perspective

Ads from the advertisers' perspective

JAKARTA (JP): Projected advertising expenditures in Indonesia, across all media, will amount to Rp 3,113 billion this year. Commercial television and newspaper will have the lion's share between them, carrying advertising worth 80.8 percent of overall expenditures, according to Media Scene 1994/95. The remaining adspend is roughly distributed between magazine, radio, and outdoor advertising equally. Cinema receives the tiny remaining percentage.

How do the client companies choose their advertising agencies? How do they decide on which to select from the wide range of advertising agencies now operating? In choosing an agency the first consideration is reputation. If this is insufficient guidance, companies then brief a number of agencies and ask them to submit proposals, from which they may base their decision on which advertising agency to use. Credibility, alacrity, proven creative ability and creative prospects are key assets of sought- after agencies.

Deregulatory packages since 1983 and recent reforms have produced a robust banking sector in Indonesia, with, at last count, 240 banks in competition in 1994. At Bank Bali, Product Services Development and Management Manager Eric Gunawan and Public Relations Manager Dian Syarief are happy to deal with the "top 10" advertising agencies. But a drawback with the big agencies can be that they may already have many established clients and not have sufficient time for a new one. "That's the first constraint," Dian says. Second, "if they are in the top 10, their fees are very high, in which case we have to be "creative" with our budget and look to smaller, cheaper agencies."

Is there then always a place for the smaller, domestic agency? "Yes, why not? And there is also a place for nationalism!" Dian says. "I have also found that the local agent, whether he is a writer or a director, is very creative, and that the expat is not necessarily the expert."

"Since the early 1990s many new advertising agencies have sprung up in Indonesia "The growth has been tremendous," Indra Abidin, from Fortune Indonesia, says. It is the view of Paul W. Kamardi, of Matari Advertising, that of the about 800 agencies operating (Abidin puts the figure at about 700), about 50 percent are advertising placement agencies, "placing adverts in the classifieds". Of the remaining 400, half of these agencies produce billboards, signs, etc. This leaves a remaining 200 that are "genuine" advertising agencies, "one hundred of which are doing most of the business".

Potential client companies are frequently visited by agency representatives with a portfolio of work in hand. And, the client companies will look at what is on offer. "Why not?" Dian Syarief laughs. Sometimes companies might discuss with their "visitors" the effectiveness of the advertising that they are currently using. Companies seem to feel quite relaxed about being actively sought after in this way. Agencies are not so happy about a situation which they characterize as price-cutting competition.

But it isn't just the agencies who knock at the door. Production houses and the media also approach potential clients, bypassing the agencies altogether. Clients who gave this information wondered what the reasons were behind this phenomenon, which seems to be quite marked this year.

When asked about its relations with the media in other respects, Bank Bali talked about shared information and news exchange. Given that it is within the media's brief to turn down advertising that is against public interest, has the media ever had occasion to reject advertising because of content? There had been one occasion when an advertisement was rejected by a radio station on the grounds that it mentioned the names of the competition. This is disallowed in Indonesian media.

Comments from both the client companies and advertising agencies suggest that both prefer long-term associations, to develop a better understanding of client cultures and objectives. Indra Abidin likened the relationship to that between husband and wife, first entered into after the agency has assured itself that the relationship is workable and to mutual benefit. Synergy of purpose. "We have our own way of identifying the client: First, the product, and second, the people behind the product". Paul Kamardi said that agencies prefer to have clients with whom they are "comfortable", who share that "x-factor, body chemistry".

Bank Bali prefers a long relationship with an agency, seeing it as beneficial for both sides. When an agency and a client have known each other for some time there is no need to start from scratch each time there is a new campaign. "They already know us, they know our corporate culture, they know our product. We hope for a long relationship, but if our needs are not met, we have to be honest, we have to be "creative" (and find another agent to suit)."

It has been suggested that agencies have problems keeping banks as clients. Bank Bali suggests that it may be because of the very tight time constraint in bank advertising campaigns.

Mobility is a problem for client companies. Rapid staff turnover in the advertising sector interrupts the continuity of this long-term client-agency relationship. When key staff leave an agency, time is required once again to build relationships and understanding anew, for replacement agency staff to get to understand a client's situation and their characteristics all over again.

Banks differ on the question of conflict of interests. Whereas Matari Advertising will only accept a single client, such as one bank, from each area, Citra-Lintas has several banks on its books, clients that clearly see there is no compromise or conflicts of interest in the services offered by the agency. But with the view that not many advertising agencies have such a "clear separation of accounts", Bank Bali prefers to be the sole banking client at the one agency. Whether there is conflicts of interest within a large agency would depend on the organization of resources within the company.

For a company such as PT LippoMelco Electronic Indonesia, which markets advanced high-technology products such as Mitsubishi refrigerators and televisions, it has been essential to have an agency with an infrastructure equipped to service the needs of high-end, exclusive product marketing. LippoMelco has been with Matari Advertising, who also offers them market research, for about nine years.

Managers at LippoMelco, Johny C Wijaya, marketing, and Soeroto I. Santoso, promotion and research, subscribe to the view that the large advertising agency, with international links, suits them best. It is also a matter of track record. They say the "natural law" applies: if agencies were creatures in the wild, it would be the biggest animal which was the strongest. Though the smaller might be lighter of step, and quick on its feet, it is size that counts.

Bank Bali, on the other hand, mixes it. Today it has dealings, depending on activities, with a range of advertising agencies, from large long-established agencies like AdForce, which has international links, to small local agencies like Kristal and Komunika.

"Once there is no creativity and the agency no longer delivers good service, then we have to search for another agent," Dian Syarief says. "Of key importance is professionalism. What I mean is that they give good service in being on time. Punctual. We need the agency's support in bringing our projects in on time." That is to say, service delivery.

For their part, the advertising agencies recognize that clients will shift when they are not satisfied, and will look elsewhere for more creativity, a lower price, more timely delivery, or additional manpower.

If a client leaves, "agencies only have themselves to blame", Paul Kamardi says. Though it should be pointed out that a change at head office overseas, to another agency, will mean the Indonesian subsidiary has to follow suit and also change.