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.