Working extra hard to assure visitors

Working extra hard to assure visitors

JAKARTA (JP): The world has, and will continue to, witness the
collapse of many dot-coms due to the shortage of operational
funds.

Ads, which webmasters hope to arrive in time to color their
websites, have failed to appear. Only a few have managed to grab
advertisers to spend their money on cyberspace business.

Here in Indonesia, only two operators have achieved relative
success in clutching advertisements for their screens.

Detikcom (www.detik.com), for example, claims to have enjoyed
Rp 6.5 billion in earnings from ads (over US$660,000) last year
alone.

Kompas Cyber Media, or KCM, (www.kompas.com) earned Rp 2
billion for the same period.

Sadly, many websites are still bare of advertisements, a prime
element of the life of such a business. Customer's fees, another
financial source, will only arrive if websites offer great value
for visitors.

What about offering it at a stock exchange?

It's not as easy as a dream. Only sites with brighter
prospects, meaning a website that embraces adequate numbers of
advertisers and visitors, can meet standard requirements for
initial public offering.

Then we come to the question of whether it's still worth
advertising on the Internet.

Future market

Some say that I-advertising, as many put it, is quite
effective. Others believe that advertising in cyberspace will
become necessary in the next few years when more Indonesian
families have their own online PCs at home and the country has a
cheaper and more reliable access to the net.

"We still rarely place ads for our company at other websites
except with our business partners, which is free of charge. For
us, it's still not effective and many people in this country
still have limited access to the net. People in Indonesia also
seem culturally reluctant to carry out transactions (using
cyberspace)," Djoenaidi, assistant vice president for consumers
and e-banking of Bank International Indonesia (BII)
(www.bii.co.id), told The Jakarta Post on Monday.

But Djoenaidi firmly believes that I-advertising in Indonesia
will boom in the future.

According to research, the number of Indonesians who have
direct access to the Internet has reached 6 million people out of
the country's 210 million population.

Unfortunately, there's no guarantee that the 6 million web
users are spendthrifts.

Another important factor to take into consideration is that
the number of internet subscribers via ISP is much lower than the
6 million figure. In other words, many Internet users browse
websites from their offices, warnet (Internet kiosks) and other
people's houses!

This fact reflects the reality that many Internet browsers
here are not coming from a group that intends to spend and spend.

"The growth of dot-coms in Indonesia is faster than the growth
in Internet users," commented an IT observer.

But there's still good news. Many marketing managers in this
country have planned a substantial budget to be spent on the
company's promotion on websites in years to come.

Several indications can already be seen on the horizon.

One of them is the significant growth of ads every year at
Detikcom and KCM.

In line with the estimated boom, some advertisement agencies
have started establishing a special division for I-advertising.
Many dot-coms have begun to realize that their business doesn't
only need advanced and sophisticated technology but also requires
a proper and accountable marketing strategy to lure visitors.

A faster economic recovery in this populous country could help
speed the realization of this hope.

Regular clients

So far, regular advertisers on the Internet here are still
limited. Most of them are companies related to cyberspace and IT
businesses, like Intel Corp., IBM, Zyrex, and those in the
telephone and mobile phone industry.

Similar to "foreign" websites, most of the ads on the Internet
here consist of other websites and sponsorships.

Few firms, which are unrelated to IT, have started placing
banner ads at certain websites in an effort to attract people to
visit their homepages.

So, it's totally different to "traditional" media like
newspapers where readers can directly view products or services.

"In the Internet world, visitors have to spend extra time and
money (for telephone billing) to view a product, while in a
newspaper it's instant," said an IT expert, who refused to be
named.

Advertisers have yet to maximize multimedia usage, which could
provide text, video (in the form of either animation or a movie)
and sound all at once.

But KCM, a portal run by a company that owns Kompas daily,
which has the biggest newspaper circulation in the country, has
initiated an advertising format for its website as part of its
efforts to woo clients.

With round-the-clock news from Kompas networks, up-to-date
articles from its sister publications and with 40 percent of its
visitors living overseas, KCM is the most appropriate website for
I-ads, said Andrey Andoko of KCM, which was previously called
Kompas Online.

Moreover, he added, "I think very few Indonesians haven't
heard of Kompas."

Like in other media, the rate for placing ads on the Internet
differ from one website to another.

"If you claim bigger earnings, you can raise your rate higher
than your rivals. It's unfair, indeed. Thus, this type of
business might require independent accounting to find out the
truth behind the figures they release to the press," an IT
observer said.

From New York, consulting firm Booz-Allen & Hamilton suggested
on Thursday that Internet media networks, or portals, need to
abandon direct marketing and banner advertisements and embrace
brand-building through sponsorships, new service offerings and
co-branded ventures.

In a press release, the firm said consumers are using Internet
media networks as destinations rather than as gateways to other
sites.

While Internet media networks remain enormously popular with
60 percent of Web user sessions including site visits, portals
need to adopt new business models to remain viable.

Users also spend three times more time, an average of 4.5
hours, at Internet media networks than they spend at shopping or
entertainment sites.

The best way for marketers to capture attention is to treat
Internet media networks as brand development venues, paying them
for the total numbers of impressions, or images, they deliver,
the consulting firm said in its report.

Companies should consider sponsorships, attaching their names
and messages to appropriate parts of a portal site or creating
new sections altogether.

However, many Internet media networks still cling to an
outdated revenue model that relies on ad payments based in part
on click-through rates, the report said.

"Marketers must start thinking of portals in the same way as
they think of mass-circulation magazines and television networks
-- as major centers of commerce and content that draw huge
audiences," said study co-author and Booz-Allen & Hamilton Vice
President Horacio Rozanski.

So, we all hope that ads on the Internet will soon realize the
predicted boom, not doom as the business still lies in its
vulnerable infancy.

-- Jon Minofri and K. Basrie