Russian online market overview
Russia has the largest number of people online (50.8 million unique visitors), higher than any other European country, according to a 2011 comScore Media Metrix report, but this is not surprising considering the population size of Russia. What is maybe more surprising is that based on a Google’s Consumer Commerce Barometer, only 40 % of those online in Russia actually make online purchases, compared with 86 % in Finland and a European average of 64 %.
So why is online purchasing relatively unpopular in Russia compared to the European average? A recent BBC Business News report on online shopping in Russia discovered that this is partly because Russians don’t trust payments that aren’t cash based. Partly because the take up and access to credit cards and other online payment systems is very low, and partly it is a question of logistics and trust. They currently don’t trust the goods they order online will actually be delivered, and transport infrastructure means they do not have the same level of domestic postal and delivery network services of other markets in Europe.
Despite these obstacles, Russian research agency Data Insight reported that the Russian ecommerce market in 2010 was worth 8.5 billion US dollars, and the ecommerce market was expected to grow by 120 % over the next 5 years. In fact they reported that 2011 has already recorded a 29 % increase from 2010 ecommerce sales. Interestingly most of the growth in 2011 was coming from cities outside Moscow and St Petersburg, and this trend seems set to continue.
What do Russians buy online? A Citibank 2010 study of the purchase behaviour of customers using its bankcards showed that the top purchasing categories included travel (airline tickets, rail tickets, hotels, travel agents), shopping (clothes, consumer electronics, computing), and telecommunications (mobile networks).
It is clear that Russia is a rapidly growing market, with huge potential for companies willing to advertise their services via online channels. The question is how can this online market be targeted effectively as an advertiser? The easiest way is through search engine marketing.
The Russian Search Engine Marketing landscape
It may not be common knowledge, but unlike most other markets Google is not the largest search engine in Russia. In fact Google has only 25 % of the search market, in Russia the dominant search engine is Yandex, with a 60 % market share.
So Yandex is the leader, but what does that 60 % share mean in real figures? Yandex reported that in 2010 its Yandex Search service served 100 million search queries daily, and that 45 % or 18.5 million of these searches came from ten large cities, Moscow, Saint Petersburg, Khabarovsk, Novosibirsk, Omsk, Ekaterinburg, Samara, Nizhny Novgorod, Rostov-on-Don, and Voronezh. On average they calculated that there were 6 or 7 daily searches per person, in 2 or 3 separate web browser sessions.
However Yandex is not just a popular search engine, it is a portal similar to Yahoo. Yandex services include webmail, weather, maps, news, a photo hosting site, and even one of the leading online payment systems in Russia, Yandex Money. Yandex sites in December 2011 according to Yandex own figures, attracted 45 million unique visitors, which is about 76 % of Russia’s total internet audience, thus making it not only the most popular search engine, but also the most visited website in Russia.
It becomes quite clear with these statistics that Yandex should be a key part of any search engine marketing strategy in Russia. However don’t forget Google, its 2 5% share of this huge market is still a considerable number of people, and Google should also be a key part of a Russian search engine marketing strategy.
How does Yandex search advertising compare to Google Adwords?
Yandex as with Google, uses keywords its advertisers select to display text based ads against relevant search queries, or alternatively it displays relevant ads in its Advertiser Network based on content of websites contained within. It is basically an equivalent system to Google’s Search and Display Network, and like the Google Display Network it is also possible to run display (banner/rich media) advertising campaigns on Yandex’s network of sites.
One difference with Google is that search engine marketing campaigns on Yandex must always use Russian keywords and ad texts. On Google you could run English ads and keywords, but of course it is always best to run ads and keywords in Russian.
Yandex process and challenges
So how do you even start the process of getting a campaign live on Yandex? The simplest way for most advertisers is to use an agency that actively runs or has run search campaigns in the Russian market.
Why should you consider using an agency rather than go to Yandex direct? There are a number of reasons. Agencies such as Dagmar have a dedicated English speaking Yandex account manager, who can help provide local expertise in finding keywords and ads that would work in the Russian market, as well as provide realistic estimates of available traffic and the costs involved. Agencies also get a media discount that can pass additional media value onto their clients.
Launching a search engine marketing campaign on Yandex has some extra challenges for non-Russian advertisers, aside from the obvious language barriers.
Yandex requires that campaigns are paid in advance, and are paid in US dollars, or Russian Roubles, as they don’t accept Euros. Significant delays with the international banking transfer process in Russia mean that you must aim to send your payment to Yandex well before you wish the campaign to go live.
Yandex’s interface is not that similar to Google Adwords, so setting up a campaign on Yandex for a novice requires more effort, though thankfully most of the interface is in English. This is another very good reason to use an agency familiar with Yandex’s workflows and with experience of running campaigns on Yandex.
On the other hand it is relatively easy to launch a search campaign on Google Russia, if you already have an Adwords advertising account. It’s just a case of creating campaign(s), then targeting the Russian market.
How about the results on Yandex, is it worth using? From our own experience yes, we have used third party tracking to track Yandex search engine marketing results and have seen good ROI results, across various industry categories. This is apart from the obvious need not to miss Yandex’s 60 % share of the search market.
If Russia is a market that is strategically important to your business, then you should consider a search engine marketing campaign, ideally with a good partner with experience in the market. Through Yandex and Google search engine marketing you will have a very effective way to reach into the heart of the Russian online market, delivering your brand and product message to millions of Russians, who each year are getting more affluent, and more likely to make purchases via online channels.
Data Insight.RU – Ecommerce in Russia: Market overview 2010-2011, 2011
Google’s Consumer Commerce Barometer: data is based on polls covering 2000 users from the surveyed countries. Unless otherwise specified, the data represent Google queries originating in Russia over the period from January 2008 to September 2010.
BBC Business News – Russians Learn the Art of Online Shopping, 17 May 2011
comScore 2010 Europe Digital Year in Review, Feb 2011
comScore Media Metrix, Sep 2011
Yandex: Search Patterns of Web Users in Russia’s Regions, 27 Aug 2010
Yandex: Company Factsheet, Q4 2011