The new year has launched with a flurry of activity, promising a dynamic year ahead. Two noteworthy highlights are hovering just above the horizon: Indonesia’s General Election in February and Ramadan in March. These two tentpole events in the Indonesian cultural context are coming at a time when advertisers and consumers are reeling through a muted growth period, fear of impending recession and rise in costs. These events are expected to have far-reaching effects not just restricted to Q1 but will determine how the rest of the year shapes up.
Advertisers are gearing up and perfecting their respective strategies in anticipation of the brewing storm. As different platforms react differently and have different statutes, it is important to understand from a micro-perspective how brands need to adapt to sail through this period of uncertainty. Broadly however, following are two key changes that are expected to impact the entire ecosystem:
- Increase in Advertising Costs: With more and more advertisers focusing on Q1 to win Ramadan as well as to stand out of the clutter, expect rate hikes in the range of 5-30% depending on platform and category. This is predicted based on the conversation with platforms and insights gleaned from dentsu’s past learnings.
- Brand Safety: With the ongoing tensions in the Middle East building in on consumer conversations, brand content is more likely to appear in controversial content.
While platforms have built their safeguards to minimise utilisation of their platforms to disseminate any news that could be detrimental to the emotions of their users, political advertisers are finding workarounds to ensure their poll promises and POV reach out to their potential voters, especially the younger generation who are highly engaged on the internet.
General Elections 2024: Dawn of a New Era
The general election in February will not only decide the country’s president and vice president, but the People's Consultative Assembly (MPR) as well as the direction of the future of Indonesia’s economy. The current Indonesian Presidential campaign is a three-legged race and the winner will be expected to usher in a period of stability in the era of ‘New Normal.’
An interesting aspect in the Indonesia 2024 elections is that the young generation (aged 22-30 years) will dominate at 56.4% or around 114 million of the total voters nationwide. Half of them will be first-time voters. A mere 1.1% of the youth population claim to be interested in politics, pushing political parties and potential candidates to utilise social media strategies to attract them. Additionally, Indonesia has faced challenges related to the spread of misinformation and fake news through intentional misleading campaigns in social media and digital media – though it is expected to be even more rampant in the coming months given the scale and popularity of short, digestible content within Gen Z. Also, with platforms like Google and TikTok banning political advertising and Meta requiring a caveat, expect Key Opinion Leaders (KOL) to be a game-changer in affecting the market’s perception on brands, events, and other public figures, especially during the pre-election period where most of the people are still relatively undecided on which presidential candidate they prefer.
Ramadan 2024: Resurgence of Consumer Power?
Ramadan will also be celebrated within the first quarter of the year. This religious practice spans a full month where individuals will abstain from eating, drinking, and anything that is considered as ill-natured or excessive from dawn until sunset. With approximately 87% of Indonesia’s population celebrating this holy month and spending on food, drinks as well as household goods, this will be a pivotal and strategic point of time for advertisers to execute brand campaigns.
Ramadan 2023 was a relative dampener across various parameters, be it consumer spending or advertiser investment. As inflation rate stabilises and consumer confidence is steadily moving back up, advertisers are cautiously optimistic that Ramadan 2024 should bring back the consumer in the marketplaces to spend, especially on the back of the freebies doled to consumers as part of pre-poll promises.
Understanding impact by Key Platforms
TV
Unarguably, the biggest battle on TV would be on the news channels, since they will be the most coveted spots by the political parties to influence public opinion. News channels tend to see a major viewership uplift and parties will try to ensure their messages are put across to the viewers who have the highest probability of casting votes. Beyond news channels, on the General Entertainment channels, there is a limitation on the number of spots per day to 10 per day per advertiser.
Implications for Brands: News channels provide a great opportunity for brands which primarily target males since male viewership tends to see a high upswing around the election period. However, what needs to be noted is that since news can be polarising, there is a probability that the brand communication can potentially be seen in some negative light; this risk needs to be properly weighed in while factoring in the increased attentive views on the channel.
Across other channels, while elections may not have a significant impact, Ramadan will again be a high clutter. The period witnesses a 10-30% increased clutter, thus early booking is imperative. In addition, brands need to look beyond just commercials and explore investing more on non-loose spots like DBI, Time Signals, Built-in to enhance their relevance factor.
TikTok
TikTok is one of the more up-coming platforms in recent years which had not been a contributing player that influenced public opinion back in the 2019 Presidential elections. TikTok is a new platform which will be used in a presidential election as it had not been used in the 2019 election – so its implications may be slightly more unpredictable. Like other platforms, TikTok is one of the social media platforms which do not allow political advertising. However, it is the prime platform for KOLs to influence their viewers efficiently with their digestible short-format videos. With consideration of TikTok’s audience comprised of the younger demographic that hold most of the audience of Indonesia’s political votes, political parties may utilise this platform as covert advertising or association with influencers. This could be observed through the recent trend of #IndonesiaMelilih2024, #Pilpres2024, #PemudaIndonesia, #LawanApatisme, #SuaraRakyatSuaraDemokrasi that has been on the rise as of November – indicating on the focus on increasing awareness and public opinion amongst the younger generation which makes up most of the voting population for 2024.
Additionally, due to Ramadan, there is an expected 25-30% increase in CPM as advertisers and brands are competing for impressions from their respective audiences at higher prices. With an increase in consumer spending, advertisers aspire to gain more share of wallet leading to more demand for inventory.
Implications for Brands: Despite the platform’s policy regarding not allowing paid political advertising, there are chances of a lot of organic political content being passed on and thus it is strongly suggested to utilise TikTok ‘s inventory filter solution to ensure that this type of content is neither directly nor indirectly associated with brands as an added layer of safety. However, it would be a good rule of thumb to be more wary of influencer marketing or KOL opportunities in case they decide to create content that can be related to certain political parties.
To counteract the expected increase of CPM during Ramadan, it is suggested to utilise new creative assets to accommodate the new season whilst also utilising RNF campaigns. Additionally, it would be wise to distribute the budget amongst different ad formats or try a new Ramadan-specific package to gain an edge from the rest – be it relevance-wise or otherwise.
META (Facebook + Instagram)
Facebook and Instagram have two vastly different audience segments – wherein Facebook users are primarily comprised of Millennials or older audiences, and Instagram where it is primarily made up of Generation Z and younger. This changes the strategies on how each platform should be approached.
Facebook is comprised of user-generated content. Although it does not allow political advertising on its platform, it does not hinder the fact that public opinion can easily be expressed through a single comment, post, or multi-media format in public posts and groups. Looking back at 2019 where misinformation and hate speech had been rampant nearing its presidential election, advertisers are advised to be particularly careful regarding keyword-blocking or contextual targeting to ensure brand safety. During Ramadan, Facebook has had a history of experiencing an increased budget from Consumer-Packaged Goods (CPG) advertisers following the estimated growth on the economy pace.
Presidential candidates had utilised Instagram to engage with the public and build rapport with the audience they wanted to focus on. However, like Facebook, Instagram had its own fair share of issues with misinformation and hate speech in 2019. Unlike 2019’s presidential election, however, Reels format is now available – making the digestible content even more digestible in the shape of short-form videos. With its main users comprised of Centennials, influencer marketing and KOLs may have a part to play in swaying the public opinion about which presidential candidate they should vote for. During Ramadan, the same regarding CPG advertisers could be applied to Instagram.
Implications for Brands: Ads within the Reels placement will be crucial for future advertising strategies, although it should be known that the CPM for both Facebook and Instagram are expected to be higher by 5-10% in Q1 of 2024 than it was in 2023 – due to having a normalised inventory supply within the coming year. This normalisation will most likely affect META in its entirety. In addition to that, due to certain advertisers’ increased activity, competition in securing impressions at certain peak hours will be higher – it would be best to book in advance to counteract this. To avoid the possibility of misinformation and hate speech that had happened in the previous presidential election, brands are strongly suggested to revisit their Brand Safety Keywords to ensure their ads are kept away from appearing on controversial topics.
Google + YouTube
Google and YouTube have the most well-rounded audience – encapsulating both younger and older generations. While Google does not allow political advertising, CPG advertisers historically tend to be more active on YouTube during election seasons. This is primarily because of an observed higher disposable income among audiences during the election periods. In addition to that, Indonesia’s market tends to have a higher spend on CPG products during Ramadan. Due to this, we can expect an inflated CPM of 10-20% within Q1 for this platform as well. In addition, YouTube creators will be creating content relating to either the presidential elections or Ramadan in the coming months due to its relevance – partnering with certain brands or political parties are to be expected.
Implication to Brands: To cater to the market behaviour of increased spends across categories, there are several ways to capitalise on the altruistic nature celebrated during the month of Ramadan, such as: Ramadan-specific packaging, offers and bundles driven by performance campaigns, capturing high intent keywords on Search, building on the high Charity Quotient, ensuring that the creatives are carrying over certain social aspects of Ramadan, among others. We can also tap into the YouTube Content Creator library especially the ones who have a high association with Ramadan-specific content to build brand recall and stand out of the clutter. To capitalise on the moment, advertisers are suggested to utilise Programmatic Guaranteed (PG) Deals or secure guaranteed impressions at their earliest to minimise competition. Brand Safety should also be safeguarded through enabling exclusions of Political Content, utilising keyword exclusions and Roadblock/Creator Connect on non-political content by Affinity.
Based on the lessons learned regarding each platforms’ trends of user-generated content nearing the presidential election in the yesteryears, while also being mindful to the precarious state of the world, it seems like 2024 would be a year which focuses on improving Brand Safety and reviewing Keyword Exclusions. Securing Brand Safety can ensure that advertisers can stay ahead of the curve, make informed decisions, and achieve their marketing goals while also being mindful of the social climate and macro-economic changes.
The writers are Hasya Petranto, Associate Programmatic Manager, dentsu Indonesia; and Faheem Merchant, AOR director, dentsu Indonesia. This article originally appeared in Marketing-Interactive.