Dentsu leads the Indonesian market, but how long can it hold pole position?
Dentsu is one of the top agencies in Jakarta, but its lead in Indonesia is far from guaranteed. We catch up with CEO Prakash Kamdar to hear his plan for remaining competitive.
Dentsu employs over 1,000 staff in Jakarta / Unsplash
On paper, Indonesia is a great missed opportunity for agencies and multinational brands operating in Asia Pacific. The World Bank expects its economy to grow 5.1% this year, compared with a predicted 2.9% global average increase, and since the turn of the millennium it has been one of the fastest growing economies on the planet. Yet, it is neighboring markets such as Singapore and Kuala Lumpur that host regional headquarters and agency hubs.
Indonesia’s huge population is spread out across more than 4,000 islands and speaks over 800 languages. And there are vast disparities in wealth – of a population of over 273 million, the World Bank estimates that only 20% are middle class consumers while its four richest citizens have more wealth than the poorest 100 million.
So Dentsu’s chief executive officer in the country, Prakash Kamdar, faces an interesting challenge if he’s to maintain the network’s tentative lead over agency rivals there. The agency has operated in Indonesia since 2000 and now has over 1,200 staff. ”It’s one of the few markets in the world outside of Japan where Dentsu is number one,” says Kamdar.
Dentsu led both Recma’s qualitative rankings and the COMvergence new business rankings between 2020 and 2021, he adds. ”In terms of new business rankings, we’ve come top for two consecutive years. It’s a solid business.”
Kamdar, who also leads Dentsu International’s Singapore presence, needs to maintain its growth in Indonesia. Before he took up the role in February, Maya Watono was Indonesian CEO for four years and set a high bar for the business, he says. ”She’s done an incredible job. How do I succeed that? She’s a highly respected, loved, successful female leader. Talk about having massive shoes to fill.”
Since taking on the gig, he has been splitting his time on either side of the Java Sea and has begun to brush up on his Bahasa Indonesia (closely related to Bahasa Melayu, the primary language of many Malaysians and Singaporeans).
Though its staff there represent Dentsu Creative and media arm Merkle, Dentsu’s operations in the country focus on performance, commerce and martech. ”But we’ve only scratched the surface,” he says. The market is full of opportunities for digital agencies willing to take on diverse clients, from ”multinational corporations as well as large local enterprises”. Notably, it’s home to 13 ’unicorn’ tech companies – firms that have reached a valuation of more than $1bn – including GoTo, Ovo and Traveloka. ”The investments we’re making include building out our e-commerce offering to ensure that we are prepared to support long-term partnerships.”
There’s also a growing market in small, independent traders, which Kamdar says ”can’t digitize everything themselves... so it’s a bout how can we help lift them, which is an opportunity as well as a responsibility”.
Kamdar suggests that by working with select, early-stage startups as well as pushing international clients towards more purpose-driven advertising in the country, it can blunt some of the side effects of Indonesia’s uneven growth.
”90% to 95% of the clients we work with are multinationals. So, how do we help them go from pursuing growth to waking up to the reality that they need to be better and do more good? What role can we play in that? The other 5% to 10% of our clients are startups. So, how can we help them scale as quickly as possible with our capabilities so that they can make a greater impact in the world? By working at both ends of the spectrum, we can move the needle.”
There are obstacles for Kamdar to steer around if he’s to continue Dentsu’s growth trajectory in Indonesia. Other agencies have their eyes on Indonesia; just this July, M&C Saatchi Performance revealed it had hired 65% more staff and picked up new clients right in Dentsu’s patch. The agency already handles the media brief for tech firms Traveloka and GoJek (now merged as GoTo).
Roshat Adnani, director of growth markets APAC at M&C Saatchi Performance, says: ”Our agency specializes at driving growth for digital native companies, helping brands to navigate the changing and evolving world of digital marketing. This expertise is essential in a mobile-first and fast-moving market like Indonesia.”
M&C’s creative strengths in the market have given other holding-company agencies a run for their money in Indonesia; it picked up millions of dollars more in creative business than established rivals Ogilvy and Wunderman Thompson (and indeed Dentsu) in May 2022, according to data from marketing consultancy R3.
Though Dentsu picked up business from Suzuki and Japan Tobacco last year, it has to fend off WPP, which has also operated in Indonesia for decades (Ogilvy first set up an office in Jakarta in the 80s). Last year, R3 data showed media agency Mindshare beat Dentsu X to pole position for new business.
The other challenge is rivalry for new hires. Agencies, tech companies, local-born startups and brands all want to hire local and are all recruiting from the same pool of educated Indonesians.
”The expectations around Indonesia can only be fulfilled if there’s enough talent,” says Kamdar. ”It’s a supply chain issue. Our growth is limited, crudely, by how quickly we can get people off the production line.”
He says he’d like to see the agency make a concerted effort to hire outside its typical pipeline of young graduates. ”You’ve got a lot of people out there feeling like they’ve been left behind in the digital economy. But they have experience and they tend to be a bit more loyal. But it’s a win-win-win outcome because suddenly you increase the entire pool of talent while everyone else is focusing on the young.”