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.