Indonesia In-App Advertising Market Outlook to 2030

Indonesia In-App Advertising Market Overview

• The Indonesia In-App Advertising market is valued at USD 900 million based on a five-year historical analysis. This market has grown significantly due to the rapid adoption of mobile technologies and increased smartphone penetration. The continuous shift in consumer behavior towards mobile applications for entertainment, e-commerce, and social media has been a significant growth driver.

• Java and Sumatra dominate the market in Indonesia due to their high population density and robust mobile internet penetration. These regions, being the most urbanized and economically advanced, house the majority of the target audience for digital advertisements. Java, in particular, serves as a hub for major companies and tech firms, making it a strategic location for advertisers aiming to reach a large, diverse audience with varying demographics and purchasing power.
• The Indonesian government is heavily investing in boosting the countrys digital economy, which is projected to reach USD 146 billion by 2024. This includes funding initiatives to support digital advertising platforms and e-commerce infrastructure, both of which will indirectly support the growth of in-app advertising. The governments support for digital startups, combined with incentives for digital marketing innovations, is likely to drive more businesses to adopt in-app advertising solutions.

Indonesia In-App Advertising Market Segmentation

By Ad Format: market is segmented by ad format into banner ads, video ads, rich media ads, and native ads. Recently, video ads have taken a dominant market share in Indonesia due to the high engagement rates they offer. With the increasing consumption of video content, particularly among mobile users, in-app video advertising has become an attractive option for brands seeking immersive, interactive, and engaging ad experiences.

By Platform: The market is also segmented by platform into Android and iOS. Android holds a larger market share due to the widespread availability of affordable Android smartphones, which cater to the majority of Indonesia's population. The open-source nature of Android allows more developers to create localized apps, contributing to a broader range of apps that utilize in-app advertising. iOS, while popular among high-income users, still holds a smaller share in comparison.

Indonesia In-App Advertising Market Competitive Landscape

The market is shaped by several global and local players who offer varying degrees of ad solutions. While Google and Meta dominate globally with their programmatic ad services, regional players like Gojek and Bukalapak also play roles in offering in-app ad services that are more localized to the Indonesian market.

Indonesia In-App Advertising Market Analysis

Market Growth Drivers

• Increase in Smartphone Penetration: Indonesia has seen a rise in smartphone users, with over 190 million people expected to use smartphones by the end of 2024, up from 175 million in 2023, according to credible sources. This rise in smartphone usage is driving the in-app advertising market, as companies seek to reach users directly through mobile applications. The growing accessibility to mobile phones, even in remote areas of Indonesia, has broadened the target audience for in-app advertising, making it a crucial driver for growth.
• Rising Internet Users and Digital Engagement: Indonesias internet user base is growing rapidly, with over 225 million internet users expected by 2024. With digital engagement increasing across all demographics, consumers are spending more time on mobile apps for everything from e-commerce to entertainment. The increasing digital footprint provides a fertile ground for in-app advertisements to thrive, as companies are increasingly allocating ad budgets to mobile platforms to capture the attention of this growing online audience.
• Growing Mobile Gaming Industry: The mobile gaming industry in Indonesia is booming, with over 100 million mobile gamers expected by 2024. As mobile games account for a large share of app usage in Indonesia, advertisers are taking advantage of in-app advertising opportunities within games. In-app advertisements in gaming apps, such as reward-based ads or pop-ups, are becoming a critical advertising channel, attracting major brands targeting younger audiences who dominate the gaming space.

Market Challenges

• High Competition Among Apps: With thousands of apps available to Indonesian consumers, the sheer volume of choices has created a highly competitive app marketplace. Many apps struggle to retain users, making it difficult for in-app advertisements to reach their intended audience.
• Ad-blocking and Consumer Fatigue: A growing challenge for in-app advertising in Indonesia is ad-blocking and increasing user fatigue towards advertisements. With more than 25 million Indonesian users expected to use ad-blockers by 2024, advertisers face challenges in reaching their target audience.

Indonesia In-App Advertising Market Future Outlook

Over the next five years, the Indonesia In-App Advertising industry is expected to witness growth, driven by the expansion of mobile internet services, rising app usage, and advancements in programmatic advertising technology.

Future Market Opportunities

• Growth of AI-Powered Ad Targeting: In the next five years, AI and machine learning will play a pivotal role in shaping Indonesias in-app advertising landscape. By 2029, AI-powered ad targeting solutions are expected to dominate the market, allowing advertisers to deliver highly personalized and context-aware ads based on real-time user behavior. AI algorithms will help improve ad relevance, leading to higher engagement rates and better return on investment for advertisers.
• Increased Adoption of Augmented Reality (AR) Ads: AR-based in-app ads are projected to become a trend in Indonesia by 2029. Major brands, especially in retail and automotive sectors, will increasingly use AR technologies to create interactive, immersive ad experiences. For example, users may be able to virtually try on clothes or visualize how furniture fits in their homes using AR ads, which will boost customer engagement and lead to higher conversion rates.