One thing Kompas has done is to create a CEO forum for the leaders of the largest corporations in Indonesia. These CEOs are invited to regular events (some quarterly, one annually), where they can meet with each other and hear from others, such as government ministers about global business trends.
In turn, the CEOs are encouraged to support Kompas’ journalism by buying digital subscriptions for their employees or to donate subscriptions to educational institutions.
100 newsrooms and more than 2,000 journalists
Founded in 1965 as a daily newspaper, Kompas, parent KG Media has grown to become the largest media company in Indonesia.
Today, in addition to its daily newspaper, and related website Kompas.com, KG Media has interests in television, radio and magazines. The company operates around 100 newsrooms throughout Indonesia with more than 2,000 journalists, Budiman said.
“The combination of the fundamental change in our industry with the situational change in the global settings affects a lot of our revenue streams,” he said.
Print was “quite dominant” before the pandemic and still contributes nearly 50 percent of KG’s overall revenue, Budiman said. However, the amount of revenue coming from print through copy sales and print advertising has fallen by half during the past three years.
“On the other hand, digital has grown quite nicely through the years,” he said. “But we’re seeing the same slowdown in 2022 in terms of digital advertising growth.”
Pageviews have been driving digital growth, and Budiman said those peaked at 2.5 billion a month – yes, that’s billion, with a b – in April 2022, when the pandemic hit Indonesia. However, he added, since then, overall pageviews have declined to the level they were at in 2018.
“We also track how our pageviews correlate with changes happening on the intermediary side and also how our traffic relates to the various rise and falls of various news aggregators in Indonesia,” Budiman said.
This has been incredibly important for KG Media because a whopping 90 percent of their pageviews are actually through intermediaries.
Another reason pageviews are falling, Budiman said, is because “Indonesia has always been more of a watching culture rather than a reading culture. So when internet becomes cheaper or ubiquitous throughout the nation, we realise the biggest growth is not in text content, but in video content.”
Video views are booming
“We have invested heavily in video production,” Budiman said. “We’re now producing 100,000 plus new videos per month, and gathering more than 2 billion video views per month.”
KG Media has nearly 650 video journalists who publish 150,000+ videos monthly.
These video views are served on intermediaries: YouTube, TikTok, Facebook – “so that means the ups and downs of our video views are also largely determined by what’s happening on the intermediary site,” Budiman said.
And therein lies the problem, he added.
KG Media’s current business model is heavily dependent on the number of views they get, and therefore also heavily dependent on intermediaries, which means they create as much content as they can and then try to leverage SEO to get the highest number of users coming in from search.
“But as we all know, these anonymous users are low in value, low in loyalty and low in ARPU. That means in response to that, we try to monetise these users by exposing them to more and more ads until there are more ads on a page than content itself,” he said.
This in turn destroys the user experience in terms of the journalism because by putting more emphasis on quantity and SEO, there’s less emphasis on journalism and niche content creating commoditised content that you cannot differentiate it from one news outlet from another.
Creating their own video solution, and exploring ecommerce
To help address these issues, KG Media has spent the past couple of years developing an all-in-one solution they call “KG Now!” which includes a video CMS, a video player, and video ad serving, Budiman said.
One of the aims of KG Now! is to help KG Media become less dependent on various ad networks to monetise their pageviews through programmatic advertising.
KG Media is also investigating the potentials of ecommerce, which is a major trend in Indonesia.
“The affiliate model exists in Indonesia, but the percentage model that we’re getting based on the basket size is quite small, so it’s not yet the model that is working for us,” Budiman said.
“How we work with ecommerce is we have a data handshake with various ecommerce marketplaces,” he added. “That means they can do retargeting directly. Usually they do retargeting through ad networks, but now we have the capability for them to do advertising for the reseller or retargeting directly with the ecommerce marketplace with us.”
Another big trend has been the rapid rise of TikTok, which in Indonesia is not only a social network but also a major ecommerce platform that allows people to purchase things they see instantly.
Here, Budiman said, KG Media is trying to develop influencer agencies.
“We talk with various influencers and then we talk with brands to see if they want to work with this influencer to try to sell their products in their influencer TikTok accounts.”
‘Digital is not yet the promised land’
Ultimately, though, KG Media, like many others is still making its way through the transition process.
“At this stage, for us, I think digital is not yet the promised land of sustainability,” Budiman said. “What we need to create is a more sustainable, thriving model for journalism with digital as part of it, but not all of it. A sustainable model of driving journalism revolves around how well you can strengthen the direct relationship with your customers, which has been disrupted for years by our own over-reliance on intermediaries.”