The opportunities are vast in Europe’s largest internet market, but advertisers need to know how to navigate it, argues Jon Myers MD & VP EMEA, Marin Software.
Does Russia matter?
Most certainly yes. Politically, it might feel like Russia is becoming more distant from Europe, but the scale and speed at which its web economy is developing makes it an increasingly attractive market for brands the world over.
Online advertisers in particular should be embracing this gift horse. In 2013, Russia had 73.8 million online users, or 53.7% of the population— mainly based in major cities. The top 25 brands searched for by Russians were all international. Combine this with rising incomes and the prospect becomes compelling. If you’re not already considering how to make the most of this opportunity, you should be.
How to reach Russians
87% of Russian consumers use search engines, but as difficult as we all find it to think beyond Google, in Russia they are not the behemoth. Russian search engine Yandex is one of the world's largest websites, with more than 100 million users globally, reaching 96% of Russia’s online audience through its ad network. Currently, searches in Russia on Yandex outstrip those on Google threefold (60% vs 30%).
It is also worth noting that despite the volumes of people already online, there is still huge potential for the market to grow. To date, online sales in Russia account for just 2% of retail sales but this is estimated to rise to 5% or, more significantly, by $46bn by 2015.
At Marin Software, we are already starting to see brands taking the leap. However, new markets pose new challenges, especially if they are a few years behind parent markets. On the most basic level, we all know that running campaigns across several geographical locations and channels produces a volume and quality of data any advertiser would struggle to process manually.
This is why it is important to automate the management process of international campaigns from a central platform - whether they are on Google, Bing, Baidu, Yahoo!, Naver or Yandex – to get a complete view of what spend is doing where and how this affects the overall ROI for search budget. That is why we have recently added support for Yandex to our platform.
A multi-step approach
Every market has different requirements for trading and arguably, Russia’s laws are more complicated and changeable across regions than most. Stay abreast of the current situation when planning any Russian venture. The UK government website is helpful for this. Try to understand things like logistics of product delivery and what the reach of your Russian delivery network is, given the geographical scale of Russia.
Roll your search campaigns out on the biggest search engine in Russia - Yandex. We have covered the reach, but Yandex also holds your hand through the launch process with a dedicated account manager (for those spending more than $500 per month). The account manager provides you with a resource who has the Russian language skills to help you create your keywords and ad copy in addition to having a deep understanding of the search mechanics within Yandex.
Once your campaigns are up and running there are a few general optimisation considerations on Yandex:
a. Serving accurate campaigns in Russian is key as using purely English brand names results in a loss of between 13% to 68% of target audience. Do not forget common typos. Bidding on phrases with typos will increase the number of impressions more than 30% (use typos for each version of spelling). There is also a lot to consider with match types on Yandex, given for example there are 6 different ways to say table in Russian. However, the match type options deserve a whole blog post of their own.
b. Russia’s size and nine time zones also presents a challenge. It is all too easy for advertisers tackling huge territories to spend too much of their budget on eastern regions before the sun rises in the west. It is important to effectively pace your budget throughout the day based on the size of Russia.
c. A good way to do this is to prioritise audiences. Russian internet users can generally be categorized into three tiers based on geography:
- Tier 1: Moscow and St Petersburg – the largest and most affluent cities.
- Tier 2: Cities with populations larger than one million people.
- Tier 3: Smaller towns and villages. Population much less affluent and significant in terms of online penetration.
As roughly 40% of the overall search volume comes from Tier 1, if you are dipping your toe into the Russian market you should optimise spend on this tier before others and grow your way down the tiers based on success in the first tier.
The Russian market has the makings of a great ecommerce opportunity: it is tech savvy and vast, and they love global brands. The key to making the most of this chance is to make sure you have the right tools to make life as easy for yourself as possible in place.