The rise of micro-influencers are among Indonesia’s top prospects

2018 was a rocky year for Tagtoo, the digital advertising company I work. But, by the end of the 12-months, we were ahead of where we were at the end of 2017.

The road was filled with hardships and hurdles and we had a close call with failure. But, we persevered through the tough times and eventually found success.

A major reason our hard work paid off is we got a grasp on how we could make a breakthrough in Indonesia.

Since our entrance into this market, we have been paying close attention to the digital marketing development in Indonesia.

As an ad-tech company, we are fortunate to receive first-hand information of future growth trajectory through clients we collaborate and approach. Coupled with insights gained from interviewing marketing professionals, we cherrypicked four key marketing trends to watch out for in 2019.

We hope this can help more companies prepare themselves better for the upcoming challenges.

The strong growth in digital advertising

The demand for digital advertising — banner ads, video ads, and native ads — will become stronger as more Indonesians have access to internet service via their desktops and mobile devices.

Despite 2017’s internet penetration standing at only 54.68 per cent, The Association for Internet Service Provider in Indonesia has revealed that the total number of internet users (around 144 million) signifies a lucrative digital advertising opportunity.

The outlay for mobile ads will account for nearly 50 per cent of total digital ads expenditure in 2019, reaching US$312 million. Since buying a decent smartphone is increasingly conventional, mobile ads are becoming the first touchpoint for advertisers to enter an Indonesian user’s personal space.

The emergence of more personalized ads on mobile devices is anticipated. More Internet user data will be collected from smartphone use.

The next problem for Indonesian e-commerce is how to harness user data to drive more conversions.

In addition, ad-targeting is going to shift from traditional demographic targeting to advanced behavioural targeting. This transformation will show a significant increase in the effectiveness of digital ads and drive more transactions.

More transparent reports are needed

Indonesia’s digital advertising is at a nascent stage.

Many companies are just beginning their online presence and have a limited understanding of digital advertising. This situation creates a grey area or a loophole that can be exploited.

Transparency and reliability in digital advertising remains a serious issue in Indonesia.

Also Read: Internet penetration in Indonesia reaches 143M people: APJII Report

Fake reports and incorrect data are frequently disclosed after advertisers outsource digital advertising to some traditional agencies.

It’s hard to judge the campaign performance.

Most advertisers don’t know if their ads are properly displayed or if the post-campaign reports are authentic. Many are mislead by the incorrect data and falsely believe their advertising campaign performs well.

“That’s why we highly encourage our clients to set up Google Analytics,” Mick Lu, head of Indonesia, Tagtoo, shared.

As more advertisers become tech-savvy, the use of a third-party tracking tool, such as Google Analytics, will help more professional ad-tech companies rise to the top.

“Learning how to interpret their own data in a correct way is critical for the business operation. That way, it helps clarify the performance attribution between agencies and clients, avoiding unnecessary trust issues,” Lu continued.

A report that fully reflects the real performance is what the Indonesian market desperately needs.

This 2019, we are positive that digital advertising will become more transparent.

Agencies offer more strategic values

There is a huge gap in terms of digital marketing in Indonesia.

Top internet businesses have built relatively competitive digital advertising teams and are well-equipped with the latest digital marketing skills.

On the other hand, SMEs and budding startups are trying to catch up.

Indonesia will see this gap becoming bigger in the coming years as more capital is instilled to cooperates and unicorn startups. Most digital placements are tightly grasped and leave no room for small players.

To surpass these difficulties, digital agencies play an important role.

They could provide strategic value through strategy, campaign execution, and scale; helping smaller companies compete with bigger names.

By collaborating with professional agencies to leverage their expertise, smaller companies can stay focused on their core business and product optimization with limited resources at hand.

This way, it could create more chances for smaller companies to survive and transition into the next stage where more resources and capitals are available to assemble a competent team.

Also Read: Happened in Indonesia: Bukalapak launches R&D centre, bike-sharing service in Bandung

“Most Indonesian entrepreneurs haven’t realized the importance of data collection while many international companies have been utilizing data for product optimization for so long,” shared Kent Kong, marketing director of Wellcomm, Indonesia’s largest electronic gadgets retailer.

“With more new methodologies and marketing tools brought by agencies, I strongly believe it would help radically change the way Indonesian entrepreneur does business,” Kong continued in the exclusive interview with Tagtoo.

Micro-Influencer marketing becomes popular

Influencer marketing is the next holy grail for Indonesia companies to push sales to another level.

By utilising the influence celebrities have on their huge fanbases, companies gain an additional secret weapon to stimulate the stagnant growth of revenue.

However, not every company, especially for SMEs, can afford to pay a celebrity millions of dollars for a simple one-time campaign. This amount of money is enough for a startup or small company to run operations for several months.

Actually, turning to micro-influencers (those with 50,000 followers and below) in a specific field could be a more realistic and cost-effective method.

Also Read: 4 startups making an impact by including corporate social responsibility in their business model

While these micro-influencers may not possess as many followers as popular celebrities, their fanbases are far more focused and more likely to make conversions.

Unlike megastars, these micro-influencers seem much more relatable to the average person.

The grassroots spirit they represent shows greater authenticity and reliability, which people can easily resonate with.

Think of it this way, a friend’s recommendation is always more impactful than what TV stars boast of.

The importance of tapping into Influencer marketing is well recognized.

With more micro-influencers mushrooming up in major platforms, such as Instagram and Vigo, it’s widely believed that micro-influencers will become mainstream in 2019.

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