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