We’ve stopped what we are doing and creating your personalized BrandZ™ report, which will appear in your inbox soon.

Indonesia 2015: Brand Building

Do not enter without an appetite for risk

A wait-and-see approach to digital means missing the boat
       Manoj Damodaran
Head of Digital

More than 100 million Indonesians will be online by the end of 2016. That’s the equivalent of a nation of connected individuals that’s 1.5 times the population of Germany or the United Kingdom, and three times the population of Canada. Among this vast number of people, 60 percent will be between the ages of 20 and 44, a highly attractive audience for marketers given their preference for branded products and ability to buy them; a further 21 percent will be teenagers, a huge pool of people who will soon be in the market for branded goods. In this digital Indonesia, 86 percent of people will own a smartphone, and for 70 percent of them, this will be their primary connection to the internet, a device they will spend an average of five hours a day using online. This vision of the not-too-distant future, built with data from eMarketer and the national web industry body APJII, shows the scale and potential for digital marketing in Indonesia.

Some of the biggest marketers in the country have shown they understand this opportunity, with big investment in testing and innovating with their digital communications. For brands yet to board this train, there is still time. This journey is a long and winding one, with a new turn at every mile.

It is important that brands don’t wait for the ‘right’ time to move into digital – the day when the ideal way of managing this ecosystem is clear. Many a digital guru, platform and media vendor is searching for these answers, but the book setting out the perfect way to manage brands online is yet to hit the shelves. The fact is that digital media is so fast-changing, the search for a ‘right’ way is bound to be elusive; what works today will need adapting tomorrow. Success in digital media is more about a mindset than an ideal structure.

In Indonesia, AXA invests 50 percent of its total advertising spend in digital. This didn’t happen overnight. The insurance brand has taken gradual steps towards becoming a digital business, through the launch of online services and, in tandem, increasing its online communications budget.

To shift a large part of your marketing budget to digital is like moving your personal savings out of a bank account and into a high-risk, high-return investment instrument. Just as advice for novice investors would be to start early, diversify, monitor constantly and take calculated and informed risks, the same applied to digital. This is not a ‘set and forget’ business; it takes constant review and adaptation – and acceptance that there is always a risk.

General Electric, who spend over 40 percent of their global marketing budgets in digital understand the need to experiment, constantly testing and adjusting. GE now produces so much digital content that they call themselves a ‘digital factory’. When Instagram came in the fray, GE was there, testing. It now has more than 180,000 Instagram followers. As CMO Beth Comstock has said: “Instagram is a way to go into our factories and get shots you wouldn't normally see. We're targeting the inner geek in everyone. Most people want to know why things work.”

For brands yet to make such a giant leap into digital, here are three pieces of advice for the year ahead:

Don’t compare digital with other media

This would be like comparing returns from a low-interest savings account with investment in the stock market. Both are important to a brand achieving a balanced portfolio, and each can energize the other. This is not about choosing ‘new’ over ‘old’.

Understand measurement

Digital marketing covers an extremely diverse and complex range of products and approaches, and each requires a different method of benchmarking and measuring. Digital measurement is real, transparent and in real time; brands need to be sure they are tracking the indicators that really matter to their business.

Digital will not solve all marketing problems

If it could, TV advertising would already have been killed off. Leverage digital for its strengths. Don’t try to make it do the work of television – it won’t. Identify exactly what you want digital to do for your brand – perhaps it’s about providing convenience, or entertainment or advice. Let your brand stand for something in your consumers’ digital lives.