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E-commerce Berlin Expo 2017 - Trends and digital advertising opportunities in Russia

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Dominik Johnson Director Key Account Development Yandex

Russia is Europe's largest internet market, and its home grown search engine Yandex is the market leader, making it an essential channel for any organization wishing to reach a Russian audience. Dominik Johnson will cover key topics including successful strategies in Russia and rules to follow. Dominik will share insights and he will show you trends in several important segments which will help you to define your cross boarder strategy to grow.

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E-commerce Berlin Expo 2017 - Trends and digital advertising opportunities in Russia

  1. 1. Trends and digital advertising opportunities in Russia Dominik Johnson Yandex
  2. 2. Doing Business in Russia ›  Opportunity ? ›  Ecommerce ! ›  Case Study .
  3. 3. 10% 66% 34% 90% Total internet users in 1996 vs. 2014 Source: comScore
  4. 4. territories of Germany 48 territory of Russia 1 =
  5. 5. Statistics on Russia Length: 7500 km Area: 17,125,191 km2 Population: 146,544,710 Internet really matters when distances are this huge
  6. 6. Source: comScore, MMX, Russia Home and Work Location, Age 15+, 2015 58 billion search requests were answered by Yandex in 2015 Search
  7. 7. Belarus 38% Ukraine 30% Kazakhstan 24% Turkey 5,1% Source: Yandex Stat, November 2016 Search Share Russia 55,2%
  8. 8. Doing Business in Russia ›  Opportunity ?
  9. 9. -8 -6 -4 -2 0 2 4 Oct. 2014 Jan. 2015 Apr. 2015 July 2015 Oct. 2015 Jan. 2016 Apr. 2016 Income down 6% Source: RBC, April, 2016 % YoY
  10. 10. 100,0 100,5 101,0 101,5 102,0 102,5 103,0 103,5 104,0 Jan. 2014 July 2014 Jan. 2015 July 2015 Jan. 2016 Inflation up 13% Source: RBC, May, 2016 %
  11. 11. 2000 2100 2200 2300 2400 2500 2600 2700 2800 2900 3000 Jan. 2015 June 2015 Nov. 2015 Apr. 2016 Retail turnover down Source: RBC, April, 2016 Billionrub.
  12. 12. Imports contracting Source: RBC, April, 2016 9 14 19 24 29 34 Mar. 2014 July 2014 Nov. 2014 Mar. 2015 July 2015 Nov. 2015 Mar. 2016 %
  13. 13. Buying power up 300% over a 15 year horizon But is it really that bad?
  14. 14. Retail turnover 27 trillion Rubles (almost 370 billions of Euro) Source: Russian Federal State Statistics Service, March 2016, 1Euro= 73 RUR But is it really that bad?
  15. 15. E-Commerce is growing 16% year on year But is it really that bad?
  16. 16. 12,1 million people went on a holiday in 2015 Source: Russian Federal State Statistics Service, 2015 But is it really that bad?
  17. 17. 2014 – 10 euro 2016 – 3 euro
  18. 18. Consumer Confidence Index - stable Source: Nielsen, 2016 80 80 79 83 85 87 79 72 78 74 74 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
  19. 19. Consumer sentiment Source: Nielsen, 2016 86% Have spare cash to spendIn saving mode 71%
  20. 20. + 31% sales growth in 2015 In 2016 all 25 cars allocated to Russia already sold out Source: AutoBusinessReview, April 2016
  21. 21. Insights
  22. 22. An ordinary day in any big Russian city…
  23. 23. 14.538.837 19.914.323 Jan-Dec 2014 Jan-Dec 2015 Jan-Dec 2014 Jan-Dec 2015 0 500.000 1.000.000 1.500.000 2.000.000 2.500.000 Impressions Promo hunting sets new records Source: Yandex, 2015 +37% 2014 2015 Consumer’s interest in discounted and cheap apparel & shoes rose 37% in 2015 vs. 2014
  24. 24. 59% 0% 35% 4% 1% Started paying more attention to prices Started paying less attention to prices Like before pay attention to prices Like before pay attention to prices of goods new to me Like before do not pay attention to prices Source: Wellhead, OMI, February, 2015 Importance of price as a trigger of purchase soars
  25. 25. 85% of shoppers in Russia expect further price increases Source: GfK, 2015
  26. 26. What factors led to spontaneous purchase in e-commerce? Source: GFK, September-October, 2015 4% 13% 14% 17% 24% 46% 77% Push messages Social network advertising On-line advertising Combined offers, bundles Mail advertising Free delivery Sale
  27. 27. Share of shoppers buying on sale is up Source: Sberbank CIB, 2016  Q2 2015 Q1 2016 50% 60%
  28. 28. Doing Business in Russia ›  Ecommerce !
  29. 29. Rapid growth of online trade Source: eMarketer, 2015. 1$=0,94 Euro according to the rate of the Central Bank of Russia by 01.12.2015 30,6 32,9 34,5 35,5 36,6 2014 2015 2016 2017 2018 Amount of online buyers in million 14,52 17,82 21,26 24,98 28,71 2014 2015 2016 2017 2018 Orders trough internet in billions EUR Forecast Forecast
  30. 30. 29% of Yandex Market customers buy with Smart Devices Source: Yandex, 2016
  31. 31. 25% clicks in YAN comes from Smart Devices Source: Yandex, 2016
  32. 32. │  In 2014 16% of Russians like ads in general │  In 2015 the share grew to 21% Source: GFK, 2015
  33. 33. Cross-border trade
  34. 34. Cross-border sales of physical goods in Russia Source: RBC, October 2015 30% 10% 55% USA UK & Europe China Where Russians prefer to shop (GMV):
  35. 35. Reasons for choosing a particular store Source: GFK, 2015 73% 34% 32% 21% 9% 7% 6% 0, 0,15 0,3 0,45 0,6 0,75 0,9 Smaller price Not sold in Russia Wider assortment Unique assortment Better quality Fast delivery For fun
  36. 36. 30% 18% 16% 16% 14% 13% 11% 6% 4,7 4,7 2 4,8 3,7 2,9 2,5 2,1 Most popular categories for international e-shopping Source: GFK, September-October, 2015 Percentage of users who made orders from international online stores Clothing and shoes Children goods Phones, smart phones and tablets Cosmetics and perfume Home and garden goods Video, audio and photo equipment PC and laptops Small household appliances Avg. amount of orders over last 12 months
  37. 37. Opportunities for Businesses
  38. 38. Russian Internet Self-Identification: Runet Core numbers: MAU – 80.5 mln people (age 12+) (in cities 100,000+, 47 mln) DAU – 66.5 mln people (age 12+) (57% of MAU) 70% 99% 46% 95% 13% 53% 2007 2016 12-24 25-44 +45
  39. 39. Devices used to go online 55% 50% 58%Russia 0+ 29% 12% 12% 60% 53% 61% 34% 11% 15% Russia 100,000+ 50% 46% 53% 24% 13% 9% Russia 100,000-
  40. 40. Customer behavior: Desktop, Mobile, Tablets Mobile phone – on public transport Tablet – at homeBrowser – at the office
  41. 41. Mobile as a natural filter Russian cities 100k+, % of population in each age group 12-24 25-44 45+ 2014 2015 2016 10 30 50 70 90 desktopmobile 2014 2015 2016 10 30 50 70 90 2014 2015 2016 10 30 50 70 90
  42. 42. Runet: core values and features Diversity: the freedom of choice Search: Social Networks:
  43. 43. Runet: core values and features ›  Yandex.Market ›  eBay ›  AliExpress ›  Avito e-Commerce hubs: ›  Yandex.Taxi ›  Gett ›  Uber Online payments: ›  Yandex.Money ›  PayPal Movie databases: ›  IMDB ›  Kinopoisk Russians are natural multiusers, not just fans of one particular provider Music streaming: ›  Yandex.Music ›  Zvooq ›  Google On-demand rides:
  44. 44. Runet: core values and features ›  Yandex.Market ›  eBay ›  AliExpress ›  Avito e-Commerce hubs: ›  Yandex.Taxi ›  Gett ›  Uber Online payments: ›  Yandex.Money ›  PayPal Movie databases: ›  IMDB ›  Kinopoisk Russians are natural multiusers, not just fans of one particular provider Music streaming: ›  Yandex.Music ›  Zvooq ›  Google On-demand rides:
  45. 45. Taxi Navigator Maps Trains Parking TransportTraffic Geoservices Information services Weather News Market Jobs Personal services Disk Mail Money Transfers Fines Money Media servicesSearch services Flights TV Search Video ImagesDirect Translate Radio Afisha Music
  46. 46. Before we start, please try to remember how Yandex main page looks like
  47. 47. 48
  48. 48. and for Star Wars
  49. 49. 50
  50. 50. 51
  51. 51. This is how it worked
  52. 52. 53
  53. 53. Is Runet Sustainable? Local technology Local data Local rules
  54. 54. Local technology
  55. 55. MatrixNet MatrixNet
  56. 56. AI is controlled by human-generated signals Smart (AI) algorithms
  57. 57. Disco Disco Recommendations Service
  58. 58. Crypta MatrixNet
  59. 59. [a] [b] [c] [d] Speech and image recognition Some text… a b c d
  60. 60. Local data
  61. 61. Huge amount of data from lots of sources partners
  62. 62. What’s the result?
  63. 63. Runet Advertising Revenue, 2015 97bn RUR € 1.25bn Total online ad market 18.7bn RUR € 0.25bn Display ads 78.3bn RUR € 1bn Context ads 25bn RUR € 0.33bn Mobile ads
  64. 64. In comparison Yandex generates more ad revenue than the biggest Russian media holding with the most popular TV channel €0.76 bn Gazprom Media €0.78 bn Yandex
  65. 65. Doing Business in Russia ›  Case Study .
  66. 66. Premium Ad Block Yandex Direct on SERP
  67. 67. Ad Formats Text & Image Ads Ads for Mobile Apps Smart Banners
  68. 68. Smart Banners can look different, based on more than 15 templates available to advertisers. Item Сarousel Single Item Discounts Special OffersItem Mosaic Smart Banners
  69. 69. Campaign parameters ›  Budget – $ 500 ›  Duration – 2 weeks ›  Number of product offers – 886 Results: ›  Impressions – 162 560 ›  Clicks– 4 390 ›  Revenue –$ 6 244 ›  Transactions – 22
  70. 70. СРС & СРА Comparison x1.3 X2.4 x0.4 Смарт-баннер Рекламная сеть Директ (Поиск) Директ (Бренд) CPC x2.0 X1.3 X0.06 Смарт-баннер Рекламная сеть Директ (Поиск) Директ (Бренд) CPA Smart Banner Yandex Ad Network Yandex Direct (Search) Branded Traffic Yandex Ad Network Branded Traffic Source: Yandex Smart Banner Yandex Direct (Search)
  71. 71. Website Visitors Target users who visited your website and had specific on-site behavior* Behavioral Target users whose interests, behavior, and recent searches match your ad copies content Targeting Options *Targeting website visitors requires Yandex.Metrica
  72. 72. Bid Strategies Choose from a variety of bid strategies to optimize CPA and ROI Geo Targeting Target your customers in select geographic areas Bid Adjustments Modify your bids by time, device types, and users’ on- site behavior* Optimization Options *Requires Yandex.Metrica
  73. 73. Case Study
  74. 74. Case Study #1 Online Retailer Store ▌  Goal: to assess traffic volume by hour
  75. 75. Hour-by-hour Traffic
  76. 76. Moscow Never Sleeps
  77. 77. Adjust Bids by Hour >  Bid up during working hours >  Decrease bids on weekends
  78. 78. Desktop vs. Mobile Traffic by Hour
  79. 79. Case Study #2 Online beauty store ▌  Goal: to show ads to a particular set of users
  80. 80. Create Segment
  81. 81. Create Segment
  82. 82. Build Remarketing Lists
  83. 83. Bid up on Yandex Search who have been looking for New Year gifts Gifts for new year Gifts for the loved ones Gifts for New Year and Christmas. Sales! Skin Care Bath and Shower Gift Certificates Telephone & Address. 8 (800) 123-45-67 . Mon-Sun 09:00-22:00 • Free delivery • High Quality siteforyandex.com/gifts
  84. 84. Retarget Users on Ad Network who have been looking for New Year gifts Gifts for the loved ones Gifts for New Year and Christmas. Sales! Skin Care Bath and Shower Gift Certificates siteforyandex.com Address and Telephone
  85. 85. Recommendation
  86. 86. Increase frequency of touchpoints with a consumer Beware of longer planning and review cycle Consider premium offerings
  87. 87. We are the gateway More details to come
  88. 88. “The simpler and more transparent your site is, the better it will be indexed.”
  89. 89. Thank you! Questions?
  90. 90. Thank you. dominik@yandex-team.ru +41 (41) 248 08 60 @dominik_johnson https://www.facebook.com/dominik.johnson Dominik Johnson Yandex, Director Key Account Development
  • Danhetrakul

    Oct. 19, 2017
  • HaniehArjmandi

    Sep. 30, 2017
  • MichaWjcik10

    Mar. 10, 2017
  • VitaliyPopkov

    Feb. 16, 2017
  • giuliog

    Feb. 12, 2017

Dominik Johnson Director Key Account Development Yandex Russia is Europe's largest internet market, and its home grown search engine Yandex is the market leader, making it an essential channel for any organization wishing to reach a Russian audience. Dominik Johnson will cover key topics including successful strategies in Russia and rules to follow. Dominik will share insights and he will show you trends in several important segments which will help you to define your cross boarder strategy to grow.

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