Indonesia Poised for Online Ad Boom

By webadmin on 09:03 am Sep 03, 2011
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Wahyudi Soeriaatmadja – Straits Times Indonesia

In the past two years, has offered Indonesians a lucid, comprehensive take on everything from the investigation of terrorist ringleader Umar Patek to a pilot strike at the country’s biggest airline, proving a hit with readers and advertisers alike.

The news website is one of dozens that have sprung up in recent years, riding on a wave of increased spending on advertising across all media in Indonesia.

Though online ad sales remain a tiny sliver of total advertising, the figure is poised to jump, analysts say, thanks to the rising use of smartphones and a booming consumer culture.

“Now is really an exciting time,” said David Webb, Hong Kong-based managing director for ad solutions at Nielsen. “As long as the industry can really get together and get behind developing the industry currency, as long as the data, the matrix that are out there are consistent… Over the next few years we can see accelerated growth.”

According to Nielsen, a global information and measurement company, ad spending across all media in Indonesia rose 20 percent to 15.6 trillion rupiah in the first quarter this year, compared with the same period last year. Television ads continue to dominate, with 62 percent of total ad spending, followed by newspapers at 35 percent, and magazines and tabloids at 3 percent.

Nielsen does not yet monitor online ad sales but Webb estimates it is between 2 and 4 percent, similar to neighboring Malaysia, but trailing Singapore’s 8 to 9per cent.

This translates to roughly 150 billion rupiah that companies spend on online advertising each month in Indonesia.

The figure has crept slowly up in the past three years, said Webb. Now, he said, “increasingly, there has been pressure from businesses to invest more online and put more advertisements online.”

There’s no shortage of online media vying to take those ads.

In addition to vivanews, other popular sites include, which focuses on the stock market, and, with celebrity and entertainment news. was profitable just 20 months after its inception in late 2008, according to its founder and content director, Karaniya Dharmasaputra.

Karaniya said his site gets one million visits a day. Readers come for the analyses and in-depth political and general news articles written and edited by the site’s 60 staff, many of whom have newspaper and magazine experience, and are paid above-market rates.

Karaniya, 42, is a former managing editor of Indonesia’s most respected and best-selling magazine, Tempo. The website is financed by investors and current shareholders include the diversified Bakrie Group, local businessman Teddy Thohir and Australian media mogul Rupert Murdoch.

“Most of those aged under 30 don’t read newspapers any more even though their parents still subscribe to one or more,” Karaniya said.

He declined to give revenue figures, or say whether might in future charge a subscription fee, a model many news sites are moving towards.

In 2000, there were 1.9 million Internet users in Indonesia, according to Euromonitor. By 2010, that number hit 45 million ‑ with access through personal computers as well as mobile phones, according to Director-General of Post and Telecommunications Budi Setiawan.

Meanwhile, the middle class in Indonesia grew from 37.7 percent of the population in 2007 to 56.5 percent ‑ or 134 million people ‑ in 2010, according to the World Bank.

As a growing middle-class moves online, advertisers are increasingly seeking them out there.

The vivanews site, for example, currently features ads from mobile phone operators, banks and an electronics brand.

Vivanews ranks second in a list of most popular online news web sites, according to ComScore, a company that tracks online traffic, including on smartphones.

It was just behind, which has been around for 11 years, and ahead of the 15-year-old, part of Indonesia’s most read newspaper.

Newspapers such as Bisnis Indonesia and Republika are now beefing up their online news, adding sections and staff.

“They are old players but had not managed their online portals seriously,” online media analyst Heri Susanto said. “Now they are mobilizing efforts.”

Many Indonesians read the news using their smartphones. Mobile phone subscriptions numbered 180 million last year, out of a population of 238 million.

Still, challenges remain for online newspapers. Until there is a good online ad monitoring service, some advertisers remain reluctant to place online ads, said Webb. Nielsen is planning to launch just such a monitoring service next year.

Janet Steele, associate professor at George Washington University’s school of media and public affairs, agreed the market is still nascent.

Steele, who is an expert on Indonesian media, told The Straits Times about recent discussions she had with students and journalists in Jakarta.

“I asked how many of the participants had ever clicked on an Internet ad,” she said. “’Only by accident,’” was the general response, and ‘annoyed’ was another.”

Reprinted courtesy of Straits Times Indonesia. To subscribe to Straits Times Indonesia and/or the Jakarta Globe call 021 2553 5055.