Companies ad budgets grow with the economy
JAKARTA (JP): Industrial and financial companies have begun to increase their spending on advertisements to take advantage of improvements in the country's economy, seminar participants addressing the country's advertisement spending said on Thursday.
Prominent government critic and economist Sri Mulyani said that many companies had begun to place advertisements in order to correct their images, which had been "distorted" as a result of the economic crisis.
Sri said companies "included in the Indonesian Bank Restructuring Agency's (IBRA's) list of the 200 biggest debtors are placing big ads to give the message that they are still in operation and exist in the market," Sri said during the seminar organized by The Jakarta Post and D&R weekly magazine.
General manager of advertising company PT Perwanal D'Archy Yusca Ismaiil said that many companies had increased their advertisement budgets, which had been severely cut due to the economic crisis.
He said that riding on the early onset of Indonesia's economic, total domestic advertisement spending this year could increase by about 25 percent.
"Spending on advertisements will be about Rp 4.5 trillion (about US$642.85 million) this year, as compared to Rp 3.6 trillion last year on better economic conditions," he said, quoting the latest report by market research firm AC Nielsen SRI (Survey Research Indonesia).
He said the Rp 4.5 trillion 1999 projection was equivalent to the 1997 advertisement spending figure.
He said some companies had already begun their advertisement activities, particularly companies in the car industry.
"The car industry has made a good start with intensive advertisements. Given the greater availability of housing loans, banking will soon follow suit and real estate will do the same," he said at the seminar.
Speakers at the seminar included Sri Adiningsih of the Gadjahmada University, operations director of private television station RCTI Nenny Soemawinata and food company executive Sudhamek AWS.
Speaking of the recovery in advertisement spending, Nenny Soemawinata of RCTI said her clients currently had to file advertisement orders two months in advance, compared to only two weeks in advance during the crisis.
She said she was convinced the positive outlook would continue because there were new product categories for advertisements which would soon appear.
She predicted foreign lubricant oil makers would soon begin intensive advertisements, following the government deregulation measures which had allowed them to distribute and sell their products directly in Indonesian markets.
She also said foreign banks were set to pursue an aggressive advertisement campaign.
"We can already see there are many foreign bank branches in Jakarta and other big cities. They have done the advertising and will do much more."
Nenny said State-owned companies would also use advertisements in order to boost their performance levels, because they were now required to operate professionally.
"The government privatization program, by which these state- owned companies are sold to foreign parties, are also forcing the state-owned companies to market themselves for good marketing and a better image."
She said social service advertisements had also been gaining a momentum and would continue to display strong growth in the near future.
Nenny said that in the domain of television advertising, traditional advertising mainstays such as products advertising hair care, cigarettes and traditional medicines would continue to dominate advertisement spots. (udi)