From Russia, With (Search) Love
Over the past few months I have had the opportunity to learn more about the current digital market and advertising opportunities in Russia from Preston Carey who is heading up Yandex’s new business opportunities outside of Russia. While China often gets the attention for its growth and opportunity, Preston showed me that Russia can also offer opportunities for companies looking to expand their international reach.
I first experienced the online opportunities in Russia while presenting an academic paper on using the internet to reach overseas markets at the Saint Petersburg University of Economics and Finance in 2004. During the presentation I asked about internet usage and while many of the professors and business leaders attending did not indicate much usage, the students all were using the internet and many of them spent time with me after the presentation asking very specific questions on how they can use the internet and search to gain exposure for Russian goods and services to the rest of the world. Since that meeting I have been to Russia a few times and every time the interest from the young entrepreneurs and growth of the market amazes me.
Russian Language Internet Users
The numbers vary but most sources regard Russia as the 8th largest online market. 2010′s usage estimates show Russia has around 44% of its 142 million people online. The Russian language is also the 8th largest language population with over 43 million RuNet (Russian language internet users) when you lump in other markets like Belarus, Ukraine and Kazakstan’s Russian speaking online populations.
Internet usage in Moscow leads the way compared to the rest of Russia—and even many western countries—with nearly all of the youth population online.
The Russian Online Advertising Market
According to the Russian Association of Communication Agencies (RACA) the Russian online advertising market seems to be growing despite the global downturn. Growth has been especially strong with text based ads followed by online display advertising. Market estimates from the first half of the year reflects a $790 million dollar market with over $500 million going to search text ads nearly doubling from last year’s numbers. Overall, digital advertising will account for over 11% of the total advertising spend.
Interestingly in Russia, paid search advertising has been primarily used as a marketing tactic of small and midsized companies. Due to increased awareness by companies and their advertising agencies, it is growing in popularity especially by financial services, tech B2B and the automotive makers from the US, Europe and Japan. Larger companies are now embracing search marketing as a very effective way to reach a highly qualified and often affluent audience. While this is good news to search engines and digital agencies, this increase in demand has resulted in an increase in click rates quarter over quarter.
Russian Search Engine Market Share
Russia is one of the few markets where Google is not dominant. In Russia, Yandex is the primary search engine with 62.4% share of usage as of June 2010 according to stats site Liveinternet.ru, with Google a distant second with only 22%.
The primary reason is the of handling Russian language content and relevant search results. Various Russian users I’ve spoken with have indicated that Google is getting better at handling Russian language content but still has not been able to pry users away from Yandex.
Russian Search Patterns
In August, Yandex released a detailed study of Russian Search Patterns documenting how Yandex’s users search. The data is quite interesting and should help marketer’s better target their ads and content to match the way Russian searchers are looking for it. For example:
- 45% of all the queries are from Russia’s 10 largest cities, with the most coming from Moscow.
- 16% of all search queries show local intent which helps explain the exponential increase in mobile search in the major cities.
- 7% of all the search queries on Yandex feature the name of the city where they live.
- 55% of the time searchers conduct a single query to find a result, with searchers in Moscow doing a single query 58% of the time.
- On an average searchers conduct 6 or 7 different queries within two or three search sessions.
Russian Mobile Search Opportunities
Yandex has indicated that roughly 10% of its general search volume now comes from mobile devices which is growing exponentially quarter over quarter. Mobile search queries generate around 3% of the total PPC clicks on Yandex. Recent reports also indicate the click rate on PPC ads on mobile devices runs nearly 40% higher than normal PPC ads.
Planning To Enter The Russian Search Market?
As always, do your homework. Start with extensive keyword research and market entry feasibility studies. I am amazed at the number of companies, especially large multinationals that have not even looked at the existing traffic they are getting from the Russian speaking markets—let alone the keyword query demand for their products.
Russia, like any other new market is not for the faint at heart. The language is complex and does not lend itself to machine translation tools. The local and commerce regulations add to the challenges. However, if your company already has an established physical presence in Russia or you connect with the right partners you can tap into the vast opportunities Yandex and the rapidly expanding Russian market has to offer.
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