Ads spending may reach Rp 5 trillion
Ads spending may reach Rp 5 trillion
JAKARTA (JP): Indonesia's growing consumer trend is expected
to boost advertisement spending to almost Rp 5 trillion (US$ 2.05
billion) this year, up 20 percent from Rp 4.14 trillion last
year, an advertising executive has predicted.
Chairman of the Association of Indonesian Advertising
Companies (PPPI) Yusca Ismail said over the weekend that from the
total amount of spending this year, about 55 percent (Rp 2.77
trillion) would go to television media, 27 percent (Rp 1.34
trillion) to newspapers and the rest to magazines, radio, movie
houses and billboards.
Yusca, who is also general manager of the Perwanal advertising
agency, said the advertising industry would continue to have a
bright future "at least in the next five to seven years".
"This is a short-term prediction based on fluctuations that
always prevail in the industry," he said, after speaking at a
seminar on communications and marketing.
Yusca said that after enjoying an average growth of up to 40
percent a year since 1989 -- when the government first allowed
television stations to air advertisements -- the industry's
growth was likely to decline slightly to between 20 and 25
percent in the coming years.
"But even these figures are good and will no doubt provide
lots of job opportunities," he said.
Yusca said there were currently "too many" foreign workers in
the industry's middle and top-managerial levels. Most worked as
creative, media, operations and art directors as well as
copywriters.
But he was optimistic that in the next five to seven years,
Indonesians would be able to fill most of the positions at these
levels.
"Foreigners will then be used strictly for their technical
expertise and advise, but everything else will come from
Indonesians," he said.
Yusca said employing Indonesians in the advertising industry
had great advantages because they could better understand the
cultural nuance of Indonesian consumers.
"It's true that culture influences the advertising industry...
My company, for example, once made an advertisement designed
entirely by a team of foreigners and it was a total flop," he
said.
But foreigners were presently still needed to pass on
technical and professional skills to the local staff, he said.
"That's why, right now, up to half the employees of some
advertising agencies are foreigners," he said.
The industry, consisting of about 150 advertising agencies,
currently employs up to 7,500 people across the country,
excluding administrative staff.
A World Development Report last year listed Indonesia as the
second biggest consumer country in East Asia after the
Philippines.
Indonesia's consumption expenditure was 61 percent of its
gross domestic product in 1994, below that of the Philippines,
which spent 71 percent of its gross domestic product on
consumption.
In 1980, Indonesia spent only 52 percent of gross domestic
product on consumption.
Data from the Central Bureau of Statistics showed that
household expenditure on food-related consumer goods increased by
5 percent a year during the 1990-1995 period while expenditure on
non-food consumer goods rose 12 percent a year.
In 1990, 60.36 percent of Indonesian households' expenditure
was on food and only 39.64 percent on non-food consumer goods. In
1995, they spent 56.86 percent on food and 43.48 percent on non-
food consumer goods. (pwn)
Table: Advertising expenditure (in billions of rupiah)
1989 1992 1996 1997
Television 29 390 2.203 2.770
Newspapers 243 377 1.202 1.344
Magazines 72 95 270 325
Radio 73 100 189 206
Movie houses 7 10 10 9
Billboards 57 55 266 307
Total 481 1.027 4.140 4.961
Source: Media Scene Indonesia Gross figures, which do not include
discounts, advertisement-barters that allow ads to be published
in the print media free of charge, and ads publicized at special
rates.