Indonesia does not have a robust PII (personally identifiable information) system, making it difficult to track personal details and establish reliable consumer profiles.

Despite this challenge, the local market offers great opportunities for ad tech vendors as it has one of the world's top 10 largest media spend and is quickly transitioning to digital media, according to Adskom CEO and co-founder, Italo Gani.

The DMP provider last year raised just over SGD$1m in funding, which it said would be used to develop a DMP and support the company's expansion plans into Singapore, Thailand, and Malaysia. It currently has a team of 25 engineers and product developers based in Jakarta, in addition to another five senior engineers in Redwood City, US.

In his Q&A with ExchangeWire, Gani outlines the Indonesian ad tech market and explains why brands should operate their own DMPs.

ExchangeWire: How would you describe the state of programmatic in Indonesia?

Italo Gani: It's really driven by the agency and focused on educating the client about what it entails. Currently, all the major agency trading desks are just starting to build their team in Indonesia, where most would still only have one or two people on the ground. Some agencies rely on their team in Singapore to support the Indonesian market, which is not effective since running ad campaigns here requires heavy discussion with the local team. Also, the ad-ops team needs to really understand the local display landscape.

How does it compare with the rest of the region, in terms of maturity and adoption of programmatic?

Indonesia has one of the biggest digital budgets in Southeast Asia, where the ad network model currently still dominates the budget. However, this is shifting quickly as clients start demanding for more performance-based KPIs, such as cost per lead.

What kind of challenges do Asian marketers there face with regards to ad tech and programmatic?

There are two big challenges, one of which is the need for education on digital media, specially, programmatic. Many marketers don't understand how to tap programmatic advertising in a strategic way.

Second, the market needs local DMP players that are able to offer more quantity and quality local data. We don't have enough DMPs in each country and this needs to be addressed. Southeast Asia is very fragmented, where each market has its own unique data characteristics.

Where are the growth areas for you in Indonesia, as well as the rest of the Asian region?

More and more brands are switching to performance-based KPIs and metrics, such as lead gens and so on. However, the ad network model can't support such performance-based KPIs and is instead focused on the performance of a display banner, which results in a lot of duplication in terms of audience or cookies that view the ad. In comparison, programmatic ads focus on the performance of the audience or cookie, which is what advertisers want to engage their audience. I refer to this as ad unit buying versus audience buying.

I believe advertisers will move on from only reviewing banner impressions and visits.

What is driving this change and what challenges will they face from switching to performance-based KPI metrics?

Banner impressions and site visits focus only on the quantity, not quality. Advertisers will start using conversion metrics to check whether each visit is a quality visit, such as tracking page views per visit, complete video views, lead generation, and online orders. Web analytic tools such as Google Analytics will help track this conversion.

Bear in mind, banner impressions can be easily boosted artificially through fraud bots.

What unique challenges do you face as a DMP provider in Asia?

First, it's the ability to work with local companies to help them become data partner. Not all organisations understand the meaning of data monetisation.

Second, especially for Indonesia, we don't have a robust PII (personally identifiable information) database. The country doesn't have a national ID card or social security number, so the government doesn't have an integrated database of its citizens. This means that many Indonesians are able to create multiple identities, making it really hard to track their real profile or personal details, such as mailing address.

Many other industries and organisations have been affected by this inefficient system. Credit card penetration is really low in Indonesia, where fewer than 10 million own a credit card compared to the country's population of 230 million. The mobile telecommunications market also has a post-paid subscriber rate of only 3%, with pre-paid accounting for 97% of the market. This is because banks and telcos don't have access to a reliable ID system to track their users to prevent fraud. As a result, many companies don't have a good PII database or data, which is crucial for us to understand the consumer's profile. It's not easy to establish this in the Indonesian market.

What are your thoughts on brands that feel protective of their data and decide to build their own DMPs?

Yes, data should be owned by the brands. They are right to operate their own DMPs, but they don't need to build it themselves. They can work with reputable ad tech vendors that have a good on-ground engineering team because collecting and processing data require know-how regarding a lot of technical processes. Many DMP players in Southeast Asia, though, only have a team of two to five business and sales staff, with their engineers usually based far away in Europe or the US. This makes it very hard to support customers in Indonesia or this region.

Generally, brands are willing to share data if they feel the DMP provider is able to clearly demonstrate the technology and security deployed. The location in which data is hosted also should be in the same region. In fact, some brands require the data to be hosted on their premises.

In addition, the DMP solution needs to support custom integration to address local needs. With many foreign DMPs run by a small team here, it is challenging to deliver local requirements.

That said, brand don't have the skills to build their own DMP as it's too technical for them. They should work closely with a local DMP.

How do you think publishers should challenge themselves? What do you feel they need to do that they're currently not doing?

Since advertisers are moving to have better conversion metrics, the CPD model will not work. Publishers need to be able to deliver more targeting-based campaigns to deliver better conversion.

Adskom was founded and is headquartered in Singapore, but you chose to launch your services in Indonesia. Can you explain the rationale behind this?

There are several reason why we chose to launch in Indonesia. First, is one of the world's top 10 in terms of media spend. Also, the transition from conventional to digital media in Indonesia will happen soon, driven by increasing mobile internet penetration. eMarketer predicts that, in 2018, Indonesia will be the fourth biggest market for digital ad spending, after China, Japan, and Australia.

In addition, Indonesia's economy will be among the top in the world and its ecommerce market already is the biggest in Southeast Asia. Indonesia also has the biggest internet population among Southeast Asian markets, and no other publisher in this region can compete against Indonesian publishers based on volume.

Can you provide some details about your roadmap and growth strategy?

Our business this year is growing more than 50% on a monthly basis, and we continue to focus on enhancing our DMP by collecting and processing more local data to establish more granularity of the audience.