Indonesia Slips to Number Two in Mobile Advertising

In a mobile-centric nation like Indonesia, mobile advertising is still continuously growing. With more than 150 million mobile phone users throughout the country, the market potential is still huge. Moreover, Indonesian people usually use more than one mobile phone to communicate.

According to a recent BuzzCity report, Indonesia ranked number two in the Asia Pacific region in terms of mobile advertising traffic. Although the company’s reach and ads served shown negative changes in the country, the figures are still enormous even for Vietnam who achieved the highest change in the region.

Hisham Isa, vice president of marketing at BuzzCity told us that this is the first time for Indonesia to be in the second position. The country has been leading the Asia Pacific since 2007. But in Q4 2010, India’s growth surpassed Indonesia and is now crowned as number one for the first time.

There are two factors, according to Hisham, as to why Indonesia is number two. First, India has a larger population base which indirectly leads to greater growth both in mobile ads and the mobile sector overall. Hisham also explained:

As advertising in BuzzCity network is sold on an auction basis, unit price can vary. When CPC rise and competing advertisers increase their bids, fewer banner ads are required to complete the campaign budget,

This is why ads served and reach in Indonesia were reduced by 13 percent and 5 percent, respectively.

What’s interesting regarding the report is that ‘white box’ phones become the second largest contributor in ads clicked (see chart below). These locally branded phones are very popular among Indonesians mainly because of their low price. Most of these mobile phones are priced below $100 but loaded with mobile internet features like Opera Mini browser and social media applications.

It’s a combination of those features and a hunger for mobile entertainment content that apparently attracts many people. Indonesians addiction to social networking and community oriented services have also made them a suitable target for mobile ads. Therefore, many campaigns promoting those contents generate a lot of clicks, even from cheaper ‘white box’ phones.

Although mobile phone user growth was predicted to be slower this year, mobile ads will continue to grow. There are still many rural areas outside Java that have minimum coverage of mobile networks. And with those low-price, high-tech phones available everywhere, people likely will continue clicking on mobile ads.