DAN Indonesia's Chairman, Harris Thajeb, has steered the company to become one of Indonesia's leading advertising agencies. With the acquisition of home-grown independent ad media group Dwi Sapta, DAN Indonesia initiated what is considered to be one of the biggest mergers in the history of the country’s advertising industry.
While Thajeb was in Mumbai as part of the AdAsia Bali delegation, he spoke to exchange4media exclusively about DAN Indonesia's future plans and Indonesia's advertising industry.
Please give us an overview of Indonesia’s advertising industry.
Indonesia’s advertising spend in 2016 was around $15 billion. Of that, a good 67% went to TV. The sectors that are witnessing a decline are print and radio. Digital advertising is on a growth curve but the ad spend on digital is limited to 10%. That said, digital is witnessing a year on year incremental growth of 50–60%. Fifty-six per cent of our population is in the millennial generation, and this audience is digitally savvy, therefore advertisers are actively investing larger budgets on digital advertising. The e-commerce sector has become the most dominant advertiser in the country. Their spends on advertising are also very significant. E-commerce platforms not only use digital media for their advertising but also conventional media like print and TV.
What is the growth strategy of Dentsu Aegis Network Indonesia? Please share your thoughts on the acquisition of Dwi Sapta.
DAN’s growth strategy worldwide and regionally is heavily skewed towards acquisitions. The acquisition of Dwi Sapta has made us the number two agency in Indonesia. Our worldwide aim for 2020 is to have 50% of our revenue to come from digital marketing. So, our next acquisition will be in the digital space because currently our digital portfolio needs more digital agencies. Our focus will therefore be on increasing our revenue from digital. Currently, about 20–25% of our entire portfolio is focused on digital advertising. Dwi Sapta is still more of a conventional agency and not digital, so we need to bring up their digital portfolio as well. We are in talks with some digital agencies for acquisitions.
What was your goal for DAN Indonesia at the beginning of 2017 and how far have you come?
We started out with the aim to become a strong number two in the Indonesian advertising market. The acquisition of Dwi Sapta has helped us get there already. Now we have a very homogeneous market share. Dentsu brings in Japanese businesses, state agencies and local agencies. With Dwi Sapta, we have the conglomerates of Indonesia. Finally, with Aegis we have the global conglomerates.
India has seen its share of disruptors that have helped the country achieve digital milestones in a very short span of time. Does Indonesia have a disruptor that has changed the way the country now functions?
Indeed, this is the era of disruptors and we have seen our fair share of disruptors. Someone in Indonesia thought of creating an app to order our ubiquitous motorcycles to come pick us up and ferry us around the city. Now this service has gone beyond the ferry service to enter food delivery. The delivery I am talking of is not from restaurants but street food from roadside stalls. The service has also expanded to logistics like moving and packing. The GoCar services have been very well monetized.