Snapshot: Crisis management in Indonesia and other challenges

Indonesia has one of APAC’s fastest growing digital landscapes, but brands remain unprepared when crisis strikes, says industry pioneer, Harry Deje. 

Growth figures across all facets of Indonesia’s digital ecosystem are phenomenal. One third of the country’s 260 million people are actively using the internet. The remaining two thirds are expected to come on board as infrastructure and access to devices improves – especially on mobile.

Indonesians have embraced social media, in particular, Facebook, Instagram and Twitter. For example, the country has the third largest number of mobile Facebook users (76 million) behind the United States and India, but has the world’s highest number by penetration – 98 percent of Indonesians using Facebook access it from a mobile phone.

According to figures from eMarketer, digital ad spend in Indonesia grew 80% in 2015. This year it will grow a further 65%. Mobile internet spend made up 15.5% of total digital ad spend last year. By 2019, it will account for 54%.

As a result, bricks and mortar companies in Indonesia are all going digital, without fully understanding what that entails, says Harry Deje, director, digital and technology, Burson-Marsteller Indonesia.

“Brands in Indonesia know how to use digital to sell, but marketers who have been in the field for 30 years can get a big shock when a crisis happens,” he says.

“It could be something as simple as a product defect – a product defect is not a crisis. It becomes a crisis when you are not dealing with it very well.”

In a market like Indonesia, digital becomes an essential tool for disseminating information quickly, with mass reach. Naturally, it also gives brands the ability to interact directly with their consumers.

Deje cites the fast response from social messaging app Line’s decision to quickly remove its LGBT themed stickers from its Indonesian sticker library after an online backlash in February. It also faced government pressure to remove the stickers.

Line used Facebook to apologise to its Indonesian users, and explain the stickers’ removal from the store. This resulted in a second government message, praising Line’s efficient resolution of the culturally sensitive material.

Deje offers the following checklist as a starting point to a crisis-management strategy:

1. Be well prepared using the 5 Ws and 1 H: who, what, where, when, why and how.
2. Make worst-case scenarios, including indicators of how an issue can lead to a crisis.
3. Have your ‘red alarm’ standard operating procedures. i.e. Who should be doing what, who will take charge, who will do digital content and who will deal with the media etc.

While Deje’s current focus is on crisis management and the role of digital to reach key stakeholders, his career spans both agency and brand sides. Here he shares his insight into three of the biggest myths of Indonesia’s digital landscape.

Indonesia’s digital landscape: Myths and misconceptions

Myth 1: Online activations work very well on their own

Indonesia is a unique market. Activating an online campaign works very well, but needs offline activation to kickstart it, says Deje.

As an example, the ‘Share a Coke’ campaign in the United States allowed consumers to order Coca-Cola online with customized names and messages, which were then delivered to their homes.

For the Indonesian market however, an offline activation was initiated first which included road shows and pop up stores. Fans could take selfies or photos with their friends, then posted them on social media in the form of images, gifs, videos and memes.

 

 

“Indonesians need that face-to-face interaction, they want to see how it’s done,” says Deje. By combining the web microsite with the offline activations, Coke was able to boost the campaign’s awareness in Indonesia.

Myth 2: Video is big

Yes, video in Indonesia is huge. According to eMarketer, average daily pre-roll ad impressions increased from 5.2 million in Q2 2014 to 90.2 million a year later. That’s growth of 1635%.

Unfortunately, the country’s digital gap – the digital literacy and adoption disparity between urban and rural areas due to infrastructure, economic and educational limitations – means this type of growth is largely occurring in urban areas only.

Urban areas of Indonesia boast good 4G networks but in many rural areas, people are still relying on 2G networks.

“While students in Jakarta are video streaming 24/7, the farmer in Bali doesn’t even know what browsing is,” says Deje.

“There are a lot of uncultivated opportunities but infrastructure and regulatory challenges must be tackled first,” he says.

Some progress is being made by technology and telecommunications organizations to reduce this gap – with better access to cheaper smartphone devices and applications such as Facebook’s Facebook Lite and Slideshow for emerging markets (which reduce data use for images and video).

For marketers, it means understanding the audience. Who are you targeting and what is the segmentation? If a brand is targeting both urban and non-urban areas, it will need two different marketing strategies, because the way each group consumes video is not the same, he says.

Myth 3: Monetization is too hard

Wrong, says Deje. Indonesians have been using online platforms for their businesses for quite a long time.

“Not the sophisticated e-commerce kind of way, but by combining offline and online platforms,” he says.

For example, Kaskus, one of Indonesia’s biggest community market places has cash on delivery as its main payment method.

Indonesia, like many emerging markets, has low credit card penetration. While cash on delivery remains one of the most common forms of payment, many innovative alternatives have evolved.

Doku is a digital wallet, which can be linked to credit cards, PayPal accounts or topped up at convenience stores and ATMs.

Another e-payment platform gaining traction in this market is iPaymu, linked to more than 100 banks in Indonesia.

The big challenges to ecommerce are regulatory, says Deje. Issues around taxation, sales regulations, legal framework for seller and buyer terms and conditions, warranty problems, delivery issues and competitive action regulation, are not there yet.

Indonesia’s flourishing ecommerce landscape is well recognized from a business and consumer point of view, and it’s now time to get regulators involved, he says.