Indonesia – Shining Through Global Economic Uncertainty
With a stable GDP growth (5%), Low Inflation and Optimistic Consumer Confidence, Indonesia is one of the most resilient economies in light of the uncertain global macroeconomic indicators. Underpinned by a 280+ million population and 70%+ digital penetration as per Dentsu’s Consumer Connections Survey (CCS), advertisers are overinvesting to capture their share of wallets within the diaspora. Digital Ad Spends are pegged at 3.8 billion USD and expected to grow ~8% Y-o-Y, per Statista.
Banner Blindness and The Risk of Stereotyping
With more and more digital advertising, consumers are getting bombarded every moment of their time on the digital space with advertisements; mostly generic marketing messages leading to most advertisements occupying the dreaded Consumer Blind Spot, the biggest enemy of Advertising Effectiveness.
These ad formats, while ‘viewable’, may not deliver on more evolved metrics like attention; advertising needs to cut through the clutter and make consumers not look for the skip button, but to grasp the messaging.
The need to build relevance led to the evolution of segmenting, targeting and positioning strategy (STP). However, the existing STP principles tend to over-rely on broad demographic and behavioral nuances and run the risk of creating aversion among audiences towards brands relying on assumptions or stereotypes.
Source: Dentsu’s CCS Explorer Tool W1
To effectively capture audience attention, we need to stay relevant by remembering what matters to your customers. Customers crave delightful discoveries, not repetitive nudges like abandoned cart reminders, whilst not invading their privacy.
Source: Dentsu’s CCS Explorer Tool W1
“Personalized Communication makes me more likely to buy a particular brand.” (Dentsu’s CCS Explorer Tool W1 2024)
Untangling The Roadblocks
The path to personalization is not without its challenges. While the benefits are undeniable, businesses often face hurdles that can stall progress. Here is a look at some key roadblocks and how brands can navigate them:
Building Trust in a Privacy-First World
Consumers today prioritize data privacy. Building trust requires transparency – brands need to be clear about how they collect and use data. Implement clear privacy policies, offer strong opt-in/opt-out options, and adhere to all relevant regulations. Indonesia’s data privacy landscape is relatively new and evolving, staying updated is crucial.
Adapting to the Cookieless Future
The demise of third-party cookies adds another layer of complexity. Brands will need to adapt their personalization strategies to rely on first-party data and explore alternative solutions.
Bridging the Skill and Tech Gap
Personalization hinges on both human talent and a robust technological infrastructure. Challenges may arise in data management, integrating channels and real-time data analysis. Discussion about personalization efforts often focus on the online journey, but in industries like retail, a large portion of sales happens offline. Brands that enhance personalization in both online and offline experiences will stand out.
Personalization 2.0 – Turbocharging Media Outcomes with CXM Integration:
Customer Experience Management (CXM) has emerged as a game-changer in the marketing landscape. It goes beyond simply delivering a product or service; it’s about crafting a holistic experience that resonates with consumers at every touchpoint, while ensuring privacy and respect for consumers and the amount of data they are willing to share. With increasing data privacy concerns and the expected demise of 3rd party cookies, Savvy Indonesian marketers are recognizing the importance of CXM to drive brand success. However, it needs to be seen not as a separate function, but an integral part of media strategy. By integrating CXM insights with media execution, brands can achieve a deeper understanding of customer preferences, behaviors and pain points. This knowledge fuels personalized marketing campaigns that go beyond demographics and purchase history, creating meaningful connections that drive loyalty and advocacy.
CXM enables personalization not just at digital media channels but has the potential to personalize across physical and digital channels. Imagine brick-and-mortar stores transformed by advanced analytics. Tailored product recommendations, AI-powered personal shoppers and facial recognition unlocking personalized offers – these are not futuristic concepts, but readily available tools. To capitalize on this opportunity, brands must meticulously map key touchpoints in the customer journey, seamlessly integrating digital and physical channels. Consider how a clothing retailer could utilize digital capabilities to enhance conversion rates in their offline stores:
Source: Dentsu’s CCS Explorer Tool W1
Another way to harness Media-CXM synergies is to maximize Customer Lifetime Value; for companies that play across multiple categories, they can curate audience personas basis their current buying behavior and harness this to identify cross-selling as well as upselling opportunities – The incumbent advertiser has a visible advantage compared to its competitors in that they understand the audience better and can personalize communication to nudge audiences towards entrenching themselves deeply within the advertiser. Leveraging Dentsu’s deep understanding of the Indonesian consumer and its advanced analytics capabilities, brands can unlock the full potential of their customer data to drive personalized marketing and maximize CLV.
Source: Dentsu’s CCS Explorer Tool W1
Seizing the Opportunity
Personalization isn’t a luxury; it’s the future of Indonesian marketing. To thrive in this competitive landscape, brands must navigate the complexities of data privacy, evolving technologies, and ever-rising customer expectations. This means moving beyond generic blasts and crafting experiences that resonate with each individual while respecting their privacy.
It’s about understanding that timing is everything. Analyze customer behavior to deliver the right message at the right moment. Remember, customers are on a shopping journey, not just waiting for a reminder to buy.
And most importantly, remember that the customer doesn’t care about your internal silos. They see one brand and expect a unified experience across every touchpoint. Break down those barriers to deliver a consistent and personalized journey.
The Future of Brand Loyalty and Competitive Advantage
The future belongs to those brands that understand that customer experience IS the brand. The most successful companies will be those who build a value exchange with their customers – enticing them to willingly share their data (zero-party data) in exchange for truly personalized experiences.
When customers see the benefits of sharing their information – more relevant ads, curated recommendations, exclusive offers – they’ll be more open to it. This transparent, value-driven approach not only builds trust but also fuels a continuous cycle of personalization, leading to deeper engagement, stronger loyalty, and ultimately, an unbeatable competitive advantage.
The time to act is now. By embracing the power of personalized CXM, Indonesian brands can transform their marketing, forge lasting customer relationships, and drive unprecedented growth in this exciting market.
Authors:
- Najla Salsabila, Associate Planning Manager, dentsu Indonesia
- Faheem Merchant. AOR Director, dentsu Indonesia
