Online advertising expected to boom: Marketing expert

Ni Komang Erviani ,  Contributor ,  Denpasar   |  Sat, 11/29/2008 11:29 AM  |  Bali

Indonesia's online media will gain a bigger share of advertising dollars in the next few years, an internet marketing expert said Thursday.

"Currently, the share enjoyed by the online media is still quite small," Virtual Consulting's CEO Nukman Luthfie said during the "New Media: The End of the Conventional Media?" seminar, held in Sanur.

In 2008, the country's online media received just Rp 80 billion (US$6.7 million) of the country's total advertising expenditure of Rp 42 trillion.

"The situation will change in the next few years as the online media will acquire a bigger share of advertising budgets," he said.

The forecast, Nukman said, was based on his observations of the latest developments taking place in the both the nation's major advertising firms, as well as its large private corporations.

"Several major advertising agencies have began to seriously develop their digital departments, while several commercial corporations have decided to promote their new products exclusively through online media," he said.

This shift, he suggested, was driven by the growing level of internet use in the country. Out of a total 30 million internet users in Indonesia, 44 percent surf the web on daily basis, spending an average of two hours online.

"The habit of reading newspapers is nearly extinct among young people," he said, implying that they have switched to online media.

Data released by Zenith Optimedia stated that the share of online advertising will see an annual growth rate of 23 percent annually during the 2007-2010 period. At the same time the advertising shares of newspapers, magazines, television and radio will decrease.

"The worst decrease will be experienced by newspapers," MNC Sky Vision CEO Handhi S Kentjono said.

However, Kentjono said he was convinced that the online media would not wipe out printed media altogether. Despite the prevailing prediction that internet use in Indonesia will increase by 20 percent in the 2007-2010 period, the country's infrastructure has yet to reach the level where it can support a nation-wide internet network. The archipelagic nature of the country coupled with the limited capability of its communication satellites is hampering the effort to expanding internet coverage, he added.

Kentjono projected that media convergence would be the future trend for the country's online and print media, supported by the shift in the behavior of media consumers. The number of consumers getting their information from more than one source has steadily increased, he added.

The seminar was organized by the Alliance of Independent Journalists (AJI) in conjunction with its national congress.

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