Digital transformation has always been one of Tempo’s biggest challenges for sustainability.
Our publication started as a weekly print magazine in March 1971 and has developed a reputation for investigative and independent news reporting. The dictatorship regime in Indonesia banned us in June 1994 because of our daring investigative reports on corruption, and we only were allowed back in business in 1998 after a massive student and pro-democracy movement forced then-President Suharto to resign.
Tempo’s republication received a warm welcome from our loyal readers and advertisers. In less than a year, we regained our position as the top publisher in the Indonesian magazine market.
In the reform era, with more open political space and liberal market policies, we strengthened our brand as the most independent and trustworthy voice in the media landscape.
Three years later, we were listed on the stock exchange after a successful IPO and published a new daily newspaper to expand our revenue streams.
A dual revenue strategy
However, our success in the print market made it more difficult for us to pivot to digital. It wasn’t until 2011 that we invested in our digital presence.
From the beginning, we decided to keep our brand as a quality journalism provider whilst at the same time building a wider and younger digital-minded readers base.
To achieve that, we built two main sites: a free Web site to publish breaking news stories and SEO content to expand our audience and a premium Web site with a paywall to generate reader revenue through digital subscriptions. This strategy has been and still is our main playbook to achieve financial sustainability.
To make this strategy work, we have to create a seamless readers journey from our free Web site to our premium site that publishes our exclusive investigative stories. We analyse audience behaviour on our site to decide which segment has the most potential to convert readers into subscribers.
Those segments receive customised offers to read our premium content and hit our paywall. The higher the paywall stop rate we achieve, the more subscribers we can get. The conversion rate will partly depend on the compatibility of our pricing strategy with the targeted segment.
Balancing the free Web site with the premium one is not an easy job. Since the free site also needs to generate revenue and build its audience base, sometimes we have to make hard choices about which keywords to pursue. We must maintain the same high standard of quality content, even though the free Web site publishes 10 times more stories in a week than the premium site.
On average, we have 15 million monthly active users in a slow news cycle and can get twice as many when a newsworthy event happens — yet we have only 10,000 subscribers, when we start revamping our subscription platform back in 2021. The numbers have grown steadily, but our digital advertising revenue still contributed more than 75 percent of our total revenue --much more than the revenue from subscriptions.
The advertising challenge
This condition sometimes creates tension because, financially, we depend on advertising but want to shift to a reader revenue model in the near future.
In Q3 2021, the tension manifested into a real business problem when we realised most of our programmatic ad revenue comes from agencies that provide unfiltered content — some of which carry mis/disinformation. These native advertising articles often promote herbal medicine, weight loss pills, skin whitening lotion, hair formula, etc., using fake personas, manipulated images, and testimonials from figures claiming to be health experts.
Those tactics violated advertising regulations in Indonesia but not a single authority filed complaints about our sites. These ads were also published on many other sites and created a lot of dilemmas among the publishers.
Understandably, we all need the revenue but also don’t want to be affiliated with mis/disinformation campaigns. One of the big digital players in the country took a drastic step by immediately dropping all of those native ads, whilst many others cannot afford to lose the much-needed cash.
I sat down with the editorial and advertising teams at Tempo to decide the best approach to resolve this issue. Obviously, we cannot let these advertisements appear on our site because that will harm our readers’ journey to convert them into subscribers. So the stake is higher for us: Not only do we risk jeopardising our users’ experience, but also losing potential subscribers.
Taking control of the truth
After several brainstorming sessions, we realised the solution was staring us right in the face.
As a member of International Fact-Checking Network (IFCN) and certified third-party fact-checker for Meta, Tempo has a team of fact-checkers working full-time around the clock to debunk claims made on various social media platforms. We assigned an extra task for this team to check on the content of native ads provided by our advertising agency partners.
We proposed this solution to our ad agencies and they agreed to create new procedures that involve fact-checking their content before they push the ads on our site.
We evaluated this programme after three months and were happy to see the results. We don’t see any drops in our conversion rate and not a single complaint from our loyal readers about the quality standard of our content. We have seen a slight decrease of revenue from programmatic ads, but it is better than losing the revenue stream altogether.
We believe we have found a middle ground that can save our conversion rate and user experience, maintain our strategy to build digital subscriptions, and keep our revenue from native advertising — all at the same time.