Creative industry upbeat on Google entry

JAKARTA. Whereas government entities differ in opinion on the communication regulations that apply to Google, advertisers and content providers are unified. For the latter, Google’s presence means greater interest in online advertising from brands and more tools for local content developers.

Google has invited the media for a gathering in Jakarta on Friday where Julian Persaud, the managing director for Southeast Asia, will unveil the much-anticipated Google Indonesia office and its team.

“We will be educated by Google,” said Nanda Ivens, director of IndoPacific Edelman Indonesia. The domestic digital advertising industry had skipped the search engine marketing stage and had headed from banner advertisements straight to social media marketing, he added. Thus, few advertisers and brands had a good command of search engine marketing.

Hence, Google had to invest long term and in the continuous training of advertisers in an array of products and services it had in store, he said.

“They need to educate us because we cannot sell their products unless we have knowledge of these products,” he said.

He further said that Google must provide market players with wide access to Google data, including behavioral research results, to gain numerical evidence of the Internet’s impact.

Once advertisers were equipped with the right know-how, they could then capture more brands to advertise digitally, which would be a boon for Google’s business as well.

“Google will empower the creative business industry by creating new revenue streams,” he said.

Andrew Darwis, co-founder of Indonesia’s largest online community, Kaskus, said that Google might initially take away some advertisers from Kaskus’ website.

According to Darwis, Kaskus, which fully relies on advertising revenues, experienced a 100 percent increase in advertising between 2010 and 2011.

Kaskus was one of the first websites whose extension application became officially available in Google Play when the application store was formally launched in Indonesia recently.

“However, as the market becomes more educated on online advertising, the overall number of online advertisers will rise, offsetting the number of advertisers who moved away from us,” he said.

Gerry Leo Nugroho, Detikcom Group’s head of Marketing Services, said Google’s presence would provide “a breakthrough in the distribution of our content” given that Android had become the second-largest operating system after BlackBerry in the consumption of detik.com’s mobile content.

Indonesia’s biggest online news portal is detik.com which, along with Kaskus, has its extension application in Google Play.

“As an online media presence in Indonesia, we hope that Google can expand and accelerate the adoption level of Internet usage in Indonesia,” he said, given that Google consistently delivered “technological breakthroughs”.

Andy Zain, an expert in digital content, said that Google’s local presence would allow local content developers and businesses, especially small and medium enterprises (SMEs), to capitalize on the various tech-based utilities Google had, such as Google Maps.

“On the negative side, there will be a great dependence on this singular platform,” he said. “That is why we should not remain passive either and start creating applications, such as local ad networks, to serve the market.”

Communications and Information Ministry spokesman Gatot S. Dewabroto also noted that while the government “appreciates Google’s decision to enter Indonesia”, the company’s presence should not overshadow local content providers.

On the regulatory side, Gatot noted that the ministry did not yet have a set of rules applicable to Google, given that the company was an over-the-top player.

Over-the-top technologies are those that facilitate the distribution of voice, video and data without going through telecommunication operators.

As such, Google could not be controlled under the government decree on communication providers falling under the 1999 Telecommunications Law.

“That is what we are working on through the convergence bill,” he said.

The bill will unify several laws, such as the 1999 Telecommunications Law and 2002 Law on Broadcasting.

However, Danrivanto Budhijanto of the Indonesian Telecommunications Regulatory Authority (BRTI) said that once financial transactions between Google and its users took place, the company would be liable to the 1999 Telecommunications Law and 2008 Information and Transaction Law, depending on the form of payment.

Google offers paid applications through its Google Play application store. Google’s AdSense advertising service levies fees as well.

“Under these regulations, Google has to establish a data server in Indonesia not solely for security purposes, but to also ensure that customers receive the desired level of quality service,” he said.

Yet, Zain noted that the government should not be “paranoid” with Google’s entry.

“Google has come to Indonesia for this country’s potential,” he said. “Now, we too have to capitalize on the potential we have.”