Heaptalk, Jakarta — Retail media networks are becoming an increasingly popular advertising channel for marketers in Indonesia, having the highest projected annual growth rate (CAGR) in Southeast Asia. These findings result from the latest research from GrabAds, an advertising service from the superapp Grab, and Kantar, an advertising research company.
Furthermore, the study estimates that retail media network (RMN) advertising spending in Indonesia will jump by 219% from 2023 to 2030 with a CAGR of 13.41%. This figure is 1.9 times higher than global growth projections, underscoring the increasing importance of RMN as the leading advertising platform for brands and marketers in Indonesia.
On a global scale, RMN ad spending is set to surge by 73% in the next seven years, surpassing growth rates in search (47%) and social (45%). In Southeast Asia, brands are expected to increase their investments in RMN this year, with projections indicating that year-on-year advertising spending growth will accelerate from 8% in 2024 to 11% in 2030.
Serving relevant ads to consumers
Retail media networks are retail ecosystems that use first-party data to create ads that are appropriate and targeted to specific consumers. Therefore, this advertising channel provides maximum impact for brands and advertisers while ensuring proper ad measurement. RMN utilizes unique user data to optimize advertising campaigns (close the advertising loop) and enable advertisers to target consumers precisely. This way, advertisers can directly measure their ads’ effectiveness.
Based on the Kantar Media Reactions 2022 study, RMN ranked first in advertising equity in various media. Advertising equity measures how well an advertising message is received by consumers, and advertising campaigns with positive advertising equity have been shown to be seven times more effective. Grab, the superapp with the highest advertising equity in Indonesia, based on data from Kantar Media Reactions 2023, also proves this.
“RMN enables advertisers and brands to serve relevant ads to consumers by showing them products that match their needs and behavior on each consumer purchasing journey. This advertising approach can help brands provide added value to consumers without disrupting consumers’ shopping experience on the app,” said Regional Managing Director at Kantar Katie McClintock.
Users prefer restaurants that offer integrated omnichannel
Unlike other types of retail media networks which only cover certain purchasing stages, RMN on superapps, such as Grab, can reach consumers at all stages of their purchasing journey, from product awareness to purchase. This includes an omnichannel shopping experience involving physical and online shopping. 79% of buyers in Southeast Asia have used both online and offline channels, and using both increases the likelihood of receiving positive advertising by 5%.
The 2023 Daily Culinary and Shopping Trends Report released by GrabAds in Indonesia revealed that 9 out of 10 users prefer restaurants that offer an integrated online-to-offline or omnichannel (O2O) experience and indicates that the demand from technology-savvy consumers paving the way for RMN to develop rapidly in Indonesia.
According to Director of Grab for Business (GFB) at Grab Indonesia Roy Nugroho, GrabAds offers personalized advertising by understanding the shopping behavior of those who tend to look for a combination of online and offline shopping experiences. “This approach tailored to consumer needs is essential for brands that want to engage the Indonesian people who are very mobile-savvy and prioritize the convenience aspect of shopping,” concluded Roy.
