20 Key Take Aways

1. THERE ARE POCKETS OF OPPORTUNITY

Even when budgets are tight, consumers will try a new category or a new or more premium product if they are convinced it’s good value. That means it’s clear value for money, but not cheap. It has to be demonstrably worth what it delivers – perhaps better health, convenience for a busy working household, or even a moment or two of happiness. So, while sales of dairy produce overall were flat in 2016, yoghurt drinks, which carry a strong association with health and well-being, grew by 3.5 percent. Similarly, sales of home care products have been steady, but stain removal products, which extend the life of clothing and furniture, are outperforming the sector. Baby products are also doing well, largely driven by must-haves such as diapers and formula milk, but there has been growth in new baby items as well, including washing gel.

2. MIND THE GENERATION GAPS

The difference in outlook and expectations of Indonesians who have grown up pre- and post-Suharto has always been marked, but there are also quite subtle distinctions between consumers even just a decade apart in age that have a big effect on how they consume media and, crucially, how they relate to brands. Kantar Millward Brown’s AdReaction study shows, not surprisingly, that older consumers spend double the time of teenagers with newspapers and magazines. What’s curious, though, is that Generation Y (aged 20 – 34) are the biggest users of Snapchat and YouTube, and that Gen Z, who are still in their teens, are the most concerned about online privacy and the most hostile to autoplay video ads and pre-rolls. What the generations increasingly have in common is Facebook; more than two-thirds of connected consumers aged between 16 and 50 use the platform at least daily.

3. DON’T OVERLOOK OLDER CONSUMERS

This is a market where the youth of its population is frequently discussed, but one of the great benefits of the past decade or so of economic growth is improved living conditions and increasing life expectancy. The average is now 71 years – a huge improvement on just 45 years at the time of Indonesia’s independence, in 1945. The number of Indonesians aged 65 or older is now 17.5 million – about the same as New York City and London combined. And while the young may be the most active on social media, it’s the more mature consumers who are more likely to have money to spend. And, strange as it sounds, the over-60s are actually the fastest-growing age group in Indonesia, due to a falling birth rate. The UN predicts that by 2050, a quarter of Indonesians will be in this age group. The elderly are the future.

4. LOOK BEYOND JAVA

Jakarta is the capital and business center of the country, but although it’s home to 10 million people, this is less than 4 percent of the nation’s people. Targeting Jakarta only – or even just the island of Java – means missing a huge swathe of the Indonesian consumer market. Be mindful of differences in regional attitudes between cities and regions. In Jakarta and Makassar, there’s been exposure to advertising for many years, and this is where consumers are most cynical about the messages they see, and most resentful of intrusion. In Surabaya, Bandung, Semarang and Palembang, there’s a discerning audience that is open to advertising, but wary of messages they feel may undermine their traditions and values. In rural areas and centers such as Medan and Padang, ads are greeted with enthusiasm as a source of both information and entertainment.

5. BEAT BOREDOM WITH BOLDNESS

People easily get bored, and roughly half of Indonesians say they skip ads whenever they can, either by looking away, doing something else, or installing ad blockers on their devices. The younger people are, generally the less tolerance they have for traditional advertising, and when they do see it, they’re less prepared to give it time and attention than older consumers. But they are prepared to devote time to brands that provide something truly interesting, entertaining or valuable to them in their communications. This is especially the case when consumers are on their mobile phones; they are generally focused on doing something else when they have their handset on, so any intrusion had better be worth it or it will instantly count as an annoyance. There’s more patience with media that feel less intimate, such as cinema ads and outdoor. But a genuinely interesting story, that is also helpful and, ideally, has great music, will be well received.

6. PEOPLE ARE TALKING ABOUT YOU

Consumers are increasingly becoming brand ambassadors for the products and services they love – and the same is true in the opposite direction. If they have a bad experience, they’ll tell family and friends. The fact that consumers talk about brands is not new, but it is relatively new in Indonesia; Kantar research comparing 2010-11 with current consumer habits reveals that people now are 50 percent more likely than before to recommend a brand or product. Now that these consumers have the ability to reach a much wider audience, thanks to rising internet penetration, this is hugely important.

7. HAND OVER CONTROL

Brands need to share control over communications with the consumers they’re looking to engage with, rather than interrupt and bombard them. Consumers are growing increasingly hostile towards intrusive ad formats, especially online, and the younger they are, the more likely they are to object to the interruption. Think carefully about using tools like pop-up ads and non-skippable, auto-play video and pre-roll video ads, especially on a mobile screen. Ads that provide rewards in return for viewing an ad – such as points in a game on a mobile app – or that allow the viewer to decide whether to watch or skip a video get a much more positive response. Indonesian consumers often resent the amount of data that ads use up, so be data-light.

8. MAKE ‘EM LAUGH

Indonesia is often viewed from outside as a conservative and quite serious country, but people here love to laugh, and humor in advertising is enjoyed by people of all ages. Visual humor that’s part of a funny story has broad appeal, with more subtle wordplay best applied to specific target groups. There are certain sensitivities to be wary of; Indonesia is a fairly moderate Muslim country, but jokes about religion are not considered funny and could put a marketing boss on the wrong side of the law. Successful deployments of visual humor include the local Snickers take on the message “You’re not you when you’re hungry” video ad, and Lifebuoy’s “The address” ad, a light-hearted moment in the day of a delivery driver.

9. THERE’S UNITY IN DIVERSITY

Indonesians take pride in the fact that they embrace cultural and religious difference. While there are times in which difference in belief creates tension, people are generally proud of the fact that they don’t just tolerate but celebrate the strength of community that extends across religious and cultural lines. This diversity is seen as underpinning what makes the country great; people take pleasure in a shared sense of belonging, feel a sense of responsibility to protect their culture and natural resources, and delight in their still-new democracy.

10. BE SUBTLE WITH GLAMOR

Beauty, sophistication and luxury are to some extent universally admired, but there’s a sense of modesty and restraint in Indonesia that means the way it is portrayed must be handled carefully. Elegance and glamor resonate well and feed on consumers’ aspirations for themselves when they are presented as accessible sophistication, rather than as attributes that mark someone out as separate or elite. There is a word in Bahasa for dignity and self-respect, gengsi, which reflects modesty and a lack of focus on material possessions. Family, community and health are seen as bigger priorities, so personal aspiration needs to be seen in that context.

11. PROVIDE AN EXPERIENCE

Delivering a product or service that does what it promises is no longer enough. Consumers increasingly expect their interaction with a brand not just to be about a sale, but also to be fun, personalized, fast, and to be seamless. It’s as much about the experience as it is about what people are buying; interaction as well as a transaction. This is the case both online and offline. Design stores and online activity to be as integrated with one another as possible, enabling people do what they want – from browsing and buying to checking loyalty points and arranging deliveries – from wherever they are. For shoppers, the digital and physical worlds are not separate entities they switch between; connected consumers are always on, whether they’re at work, on the sofa or in a store. Brands and retailers need to use technology to ensure they keep up.

12. THE JOURNEY MATTERS

When Indonesians strive for success, the journey is just as important as the goal. Society is, as in many Asian markets, more focused on the well-being of the collective rather than the individual, so while people like to strive for individual achievement and the admiration of those around them, they should appear humble about their achievements and proud of the effort that’s gone into it. People like to see others working hard for something that’s important to them – not overnight success. The flip side of this is that success is pursued not just for individual glory but for the benefit of others, too. Pond’s is good at showing women pursuing their own goals but supporting each other and celebrating one another’s success. Dunhill advertising, meanwhile, shows a chef who starts his own business, and stresses the long learning process that leads up to his successful launch.

13. MODERN FAMILIES ARE BIGGER THAN YOU THINK

The family is at the heart of Indonesian culture, but urbanization is changing family structures, and people are finding familial support in communities beyond parents, grandparents and children. As young people increasingly move cities or islands to pursue work and educational opportunities, people are finding a sense of family and shared experience with other people, and advertising should reflect that change. Couples without children, older couples, groups of friends and gatherings of work colleagues or sports teammates can all help tell a story of togetherness and friendship. Bango Kecap’s mother-daughter TV ad focuses on one specific relationship within the family to great effect, without resorting to oft-used, family-at-the-dinner-table imagery.

14. WOMEN’S ROLES ARE CHANGING

Advertising and indeed much of the TV programming made in Indonesia has tended to depict women in one key role: mother and homemaker. The mother as the heart of the family is still a relevant image, but it is starting to be demonstrated in new and slightly more varied ways. Women are still serving meals, caring for children and cleaning homes, but they are projected as being more confident and independent, and their families are shown not just being grateful for a delicious meal but also understanding of a woman’s needs. When it comes to romantic expressions within advertising, a light touch is required; playful flirting is seen as fun, but a message that is overtly sexual is a step too far.

15. INSPIRE, DON’T JUST EXPLAIN

This increasingly discerning consumer audience doesn’t want advertising that presents them with a list of facts and a price. The sheer amount of advertising that people are exposed to means that ads failing to make an emotional connection will simply add to the clutter. Facts are still important, but they’re the beginning, not the end. The most powerful and effective ads in Indonesia are those that provide useful information but that also tell an emotionally compelling brand story that brings the factual information to life. They show the effect of using a product or service, rather than tell consumers what it does. In fact, the more information is packed into an ad, the more likely people are to switch off and remember very little. Human, emotional stories are far more memorable.

16. SHOPPING IS STILL DONE IN SHOPS

The rise in e-commerce in Indonesia in the past three years has been tremendous, and there is still considerable scope for growth, as many people are still yet to make their first purchase online. But it’s important to remember that for most people, the majority of their purchasing still takes place in a physical store, and more often than not, that store is a traditional, individually owned store. The modern retail trade continues to expand, fuelled by the rapid expansion of mini-markets in the past year. Mini-markets account for 14 percent of all FMCG sales in the country now, and hypermarkets for an additional 8 percent, meaning that 78 percent of goods sold are traded in traditional outlets. These stores are not just distribution points but also key points of influence; friends and neighbors bump into each other as they shop, and in the smaller stores, shopkeepers who have the ear of their customers can make or break new lines. Organizing point-of-sale promotions in small stores can be a challenge, but this is not a challenge to be overlooked.

17. TRY NEW FORMATS – AND BE HONEST

Consumers expect innovation in both products and in brand communications, so think about innovations such as sponsored lenses for picture sharing on social media, which change the way people look in their selfies. Or try sponsored filters, to change the background of a shot in a fun way. Branded video content is widely preferred to many more traditional forms of online advertising, with tutorials and expert reviews enjoyed most. Consumers object, though, to discovering that a piece of content they’ve been enjoying turns out to be sponsored by a brand. Be honest about a brand’s involvement from the start; it’s true that there’s a chance they’ll stop watching once they know, but those people will feel cheated if they find out later.

18. KEEP SPENDING ON TV

While a lot of the excitement among advertisers is about the potential of online and mobile in particular, for most brands looking for national exposure, building television into the media plan still makes sense. People are still tuning in, in huge numbers, and new opportunities for advertisers – such as sponsorship within programming – is giving brands new ways to make an impression beyond the traditional spot in an ad break. Indonesian consumers spend an average of about two hours a day watching traditional TV, in addition to the TV content they’re watching on smaller, more portable screens. The younger they are, the more likely they are to be using a mobile either as well as or instead of a TV set.

19. 1+1 = 3

TV works and digital works, but when both are used in combination, then brands can get the best of both worlds. Indonesians are said to have the highest rate of multi-screening in the world, with a reported 70 percent of people regularly using their mobile phone while they’re watching TV. And they’re not using one screen to escape from the other when their interest wanes; Kantar Millward Brown research shows they’re often “meshing”, looking up content on one device that relates to what’s being consumed on another. Combining media effectively, therefore, doesn’t mean hitting a consumer many times on every screen they have with the same message. Smart brands are using multiple touch-points in different but related ways to achieve both reach and personalization. Inviting people on TV to vote or enter a competition through an app is just one approach.

20. THINK DIFFERENTLY BEYOND BORDERS

It used to be just Garuda Indonesia and Indomie that were known outside Indonesia, but growing numbers of brands are looking to expand throughout the region and beyond. While the ASEAN free-trade agreement has yet to effect a huge flow either out of the country or an influx of foreign brands entering, brands should be aware that local advertising doesn’t travel well outside the country, and the same applies in reverse. This didn’t used to be the case; ads made in nearby markets such as Thailand, the Philippines and Malaysia used to work pretty effectively in Indonesia. In 2005, Kantar Millward Brown found that 54 percent of ads were transferable between Indonesia and the rest of Southeast Asia. That figure has since dropped to 39 percent, as Indonesia’s unique blend of modernity and tradition makes it increasingly distinctive.

BrandZ Indonesia Top 50 2017

BrandZ Indonesian 2017 Report Top 50 Report

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Methodology and valuation by Millward Brown


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