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Facebook to Open Limited Liability Company in Indonesia

Leading American online social media and social networking service Facebook will open a permanent business entity (a foreign limited liability company, in Indonesian: Perseroan Terbatas Penanaman Modal Asing, or PT PMA) in Indonesia later this month. The move is in line with Indonesian government requests. Earlier, Facebook only operated a representative office in Jakarta.

Samuel Abrijani Pangerapan, Communications and Information Ministry Director General of Information Applications, announced Facebook’s decision to open a permanent office in Indonesia on Wednesday (02/08).

Over the past one or two years Indonesian government officials had been ventilating their displeasure with the so-called “over-the-top” (OTT) giants, a term used for networks that deliver film and TV content via Internet, as these platforms had been hesitant to set up permanent corporate establishments in Indonesia and therefore pay few taxes to the Indonesian government. Besides Facebook, it also involved Google, Yahoo, and Twitter.

Rather than opening – and booking transactions and revenue at – a permanent office in Indonesia, they preferred to continue booking earnings (that were partly derived from Indonesia) at their regional headquarters in Singapore, implying Indonesia missed out on tax revenue.

But there were more reasons cited for the importance of setting up a permanent business entity in Indonesia. One is that Facebook would be in a better position to tackle negative content and fake news (hoaxes), an issue that has become a big problem in Indonesia (and can even destabilize the country), while communication with the government would also improve.

Indonesian authorities urge social media platforms such as Facebook to combat the spread of fake news and said it would help if these platforms would set up local entities in Indonesia because it would ensure better quality services, while they would also be able to familiarize themselves with Indonesian perspectives and the local cultural context (the local context determines the degree of sensitivity of the fake news message; a fake news topic that may be harmless abroad can be a major issue in Indonesia). With a proper company in Indonesia a social media network is much quicker to respond to “negative content”, which include hoaxes and pornography, because they have a better understanding of the local culture.

Besides hoaxes, Facebook also expressed its commitment to act on reports of “illegal content” such as radicalism, terrorism and pornography. Facebook will create a special algorithm for Indonesia to deal with this matter.

Facebook will follow the new Standard Industrial Classification – in Indonesia known as KBLI – that categorizes all businesses for the purpose of economic analysis, decision-making and policy-making. Before the revision, the previous KBLI did not recognize digital businesses and therefore Facebook received a license as a management consulting company. However, it now needs to change this classification to a commercial portal or web platform.

Number of Social Media Users at Start 2017:

Platform    World
(in million)
Indonesia
(in million)
Facebook    1,788     88.0
WhatsApp    1,000     12.3
Instagram
    500     28.0
Line     220     30.0
Twitter     313     16.8

Source: Investor Daily, Indonesia Investment

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Measuring The Return on Facebook Likes

Marketers often find it hard to prove the ROI of social media investments. Here’s an easy way to quantify the value of recruiting people to like your Facebook page.

You will need:

A metric.

What is your goal in acquiring likes? Is it to increase sales, change offline behavior, or accomplish something else? Your Metric should reflect behavior that is measurable. For some metrics, such as sales, measurement is pretty straightforward; for others, such as brand attitudes, you may need to do extra work, such as administer a survey.

An invitation method.

You need to invite people to like your page. One simple way is to obtain e-mail addresses of people in your target market.

Then follow these steps:

Acquire likes.

Invite half your sample to like your page; this is your “treatment group”. The other customers form your control group. Record the group to which each customer is assigned.

Confirm your assumptions.

Check to see whether the liking induction worked–you need to make sure that a good chunk of people took you up on the invitation. You can approximate the number by looking at the increase in your Facebook followers at the time you issued the invitation.

Advertise.

Run some advertising on Facebook to expose your new recruits to your marketing messages. You can do this by paying to promote posts.

Check your response.

Measure the behavior you defined up front. Say it’s sales: If the average spend of those in the treatment group is higher than the spend of those in the control group, the difference is the value of a like. Of course, your results will contain some “noise”; for example, you might miss the purchases of people who check out using an e-mail address that’s different from the one you have on file. To increase accuracy, aim for a large sample size and make sure that your e-mail list as current as possible.

by Harvard Business Review Magazine, March-April 2017.
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