Rin Hindryati – Indonesian ad agencies say their business is heating up, thanks to improving consumer demand and a strong holiday season. And foreign multinationals are among the big spenders.

Despite Indonesia's continuing social unrest, consumers across the archipelago are buying more soap, shampoo and cars as the economic crisis abates. Foreign companies, meanwhile, are eager to expand their operations into what is potentially Southeast Asia's biggest market.

"Our clients say their sales are going well and, therefore, they're ready to spend on advertising," said Bukit Ketaren, of the Indonesian advertising company Inter Admark. The country's total advertising revenue is now 90% of what it was in 1997, the year before the country's economic meltdown.

Many leading advertising agencies have been in a rush to secure advertising slots on several private Indonesian television stations in the past two months. This is despite advertising costs that have increased between 10% and 15% from a year ago. One private Indonesian TV station, Rajawali Citra Televisi Indonesia, or RCTI, said it had to reject requests for advertising space because of its booked schedule in recent weeks.

"This is the first time we've received so many orders that we can barely meet demand," said Kanti Imansyah, the head of advertising sales at RCTI.

"All the golden time spots have already been fully booked, while the second- and third-grade periods are 90% full."

Indonesia's improving economic trend has partly induced this upsurge. The government is predicting 4% economic growth in 2000, with interest rates continuing to come down and product demand improving. Consumer-product companies such as automaker Astra International and Matahari Putra Prima, an operator of retail malls, have been reporting profits over the past two quarters of 1999, after suffering sharp losses in 1998. "This trend should continue," says James Riady, whose Lippo Group owns Matahari.

Indonesian ad companies say that multinational companies have been particularly aggressive in increasing their advertising in recent months. They've been seeking to cash in on Indonesia's December-to-February holiday season, which includes the Muslim fasting month of Ramadan, Christmas, New Year's Day and the Lunar New Year.

According to a report by research company Media Scene, ad spending for personal-care products, such as hair-care products, has shown steady growth over the past two years, despite the crisis. The ad companies agree that consumer and personal-care products have commanded among the largest spending for advertising in the past three months. These are including cigarettes, women's care products and milk, said Lisa, marketing director of Adforce Indonesia.

Seen from ad spending budget allocations, Unilever has been the largest advertiser. According to data from Media Scene, in 1998, the company spent at least 92.59 billion rupiah ($12.8 million) on advertising five of its brands, namely Sunsilk and Clear shampoos, Lux bath soap, Rinso detergent and Pepsodent toothpaste.

"The rise in monthly ad spending over the last three months is around 43%, compared to the monthly average for the first nine months of 1999," said Wanlie one word is of Indo Ad, an affiliate of Ogilvy & Mather. Among Indo Ad's clients are Unilever Indonesia, Astra International, Diageo, with Guinness beer, Food Specialties and American Express. Indonesian consumers generally spend more during these months, particularly on the post-Ramadan Lebaran holiday.

The election of President Abdurrahman Wahid and the calming of Indonesia's fractious political environment have also persuaded companies to increase their marketing budgets, advertisers say. Before October's presidential election – and particularly during last year's campaign season – many clients of ad companies said they were freezing their advertising spending until the situation cleared.

RCTI, the TV station, for instance, saw a 60% rise in its December advertising sales from a year earlier. The sales group manager, Ms.

Imansyah, declined to disclose the figures, but said, "December is always a good sales season for us, but this time it has been multiplied by the fact that many clients have held their budget for the first semester and, therefore, doubled their spending this month." According to the Indonesian media watch dog, P3I, total revenue from television advertising in 1998 was 2.2 billion rupiah.

Ad promotions are changing with Indonesia's improving economic fortunes. Last year, when the economy crashed, the advertisers say promotions focused on themes of "national unity" and public- service announcements. Indonesia's Mega Bank, for example, tried to promote racial harmony on advertising spots that ran on RCTI. The two-minute spot described scenes from a lifelong friendship between three men from different ethnic groups: Javanese, Batak and Chinese.

Now, companies in Indonesia are focusing again on more-commercial themes, and pitching luxury goods. Astra International, for example, is running an ad featuring a couple who just had a child and so need a comfortable new Astra car.

Advertising companies also are focusing on TV, rather than magazines and newspapers to get their message across. "It's now in a ratio of 2 to 1," said Bukit Ketaren, account director at Inter Admark agency, an affiliate of Japan's Dentsu.

But the question these advertisers keep asking is will this last? Indonesia's financial system remains saddled by nonperforming loans and shortages of new credit. And social unrest is keeping foreign investors cautious. Still, says Ms. Wanlie, "as long as the greater economic growth figures continue to improve gradually, advertising businesses will too."