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10   ❖   Tuesday, September 1, 2009                                                   M T          C O N F E R E N C E S  ...
Tuesday, September 1, 2009                                                           M T          C O N F E R E N C E S   ...
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The Moscow Times: Runet Business Conference


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Runet conference: September 1st 2009 with Vladimir Dolgov, Google Russia, Hanspeter Kipfer, Oracle Eastern Europe and Nick Wilsdon

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The Moscow Times: Runet Business Conference

  1. 1. 10 ❖ Tuesday, September 1, 2009 M T C O N F E R E N C E S The Moscow Times BE ONLINERuNet of Today S ince 1994 — the year when the .ru nancial crisis has changed the way people rience of getting content, but also the way From a business perspective RuNet is domain appeared on the web — the and businesses use the web. In the slow- they search for information. People, saving still one of most attractive platforms, not Russian Internet segment has been down the multimedia web has truly become money, more often look for product prices, just for marketing specialists but also for developing rapidly. Today, 15 years later, a new way of going out for many people comparing them and trying to find special investors and business angels. But the cri- almost 37 million people go online monthly worldwide and in Russia. Users look for offers and discounts. Even people who tra- sis has changed the way investors and in Russia, creating, communicating and free or cheap services for entertainment — ditionally buy offline, more often make de- venture funds choose investment objects. searching for information. music, movies, games and sites for com- cisions based on information they get on- They have become more deliberate in their From being a place for proficient techy munication. line. decisions. The time of projects with un- geeks and early adopters, the web has Free online video has become one of the The growing number of users spending clear business-plans is over. Existing ser- evolved to become a commodity, a liv- hottest global trends of 2009. 20 hours of more time online and searching for better vices have also changed their development ing space for millions of Russian users. video is being uploaded to YouTube every prices on one hand and the necessity to op- strategies — Instead of simply aiming at It has grown from a relatively small digi- minute. And people are not only exploring timize marketing budgets on the other, has the growing audience figures, the site own- tal Russian-language niche of the global professional content, but more and more forced many companies to pay attention to ers are now looking for new ways of con- web, to one of the biggest and most dy- create their own. online marketing instruments. Marketers tent monetization, activating more paid namic markets, attracting multi-million in- Communication platforms as social net- have found more affordable, more targeted features. vestments, local and global players. From a works is playing greater role than ever. Ac- and more flexible marketing tools on the In- Thus, despite the general decline in busi- service where several dozens of tech profi- cording to ComScore research, Russia has ternet, like online advertising in general and ness activity, the Internet is staying one cient users had been exchanging their ideas the world’s most engaged social network- contextual advertising in particular. Accord- of the most rapidly developing industries By Vladimir Dolgov on writing codes it became a place where ing audience and one of the biggest and ing to Zenith Optimedia’s report, the local for all involved groups — site and content Google Russia country manager president of Russian Federation speaks to fastest growing mobile Internet markets in online advertising market will stay in 2009 owners, businesses and users. The RuNet millions of Russian citizens. the world. the same as in 2008, even in the worst case will apparently play a bigger a role in lives In recent years the Internet has been one But the current economic situation has scenario, and will be worth about 7.5 bil- of even more people and will become a way of the fastest growing industries. But the fi- not only had an impact on the user’s expe- lion of rubles. the biggest sales channel ever created.Linking Loyalty to the Customer ternet shopping, adding another dimen- and apply promotions appropriately. lows information relating to customers uct, however, after analyzing purchas- sion to the key challenges facing busi- For this reason Loyalty initiatives were to be held in disparate systems, across ing trends for the niche customer base, nesses today: winning and retaining cus- often set up and then left to run — un- all departments, to be analyzed and then it quickly realized that they were actually tomers, while reducing costs. More than touched and in isolation from the business. acted upon — all within one applica- the company’s most valued, loyal cus- ever before, customers are expecting to The Loyalty program database was often tion environment. Armed with this infor- tomers. Having this level of visibility, the take an active role in their relationship with mined for tactical marketing campaigns — mation, companies can then build highly company quickly realized the need to a brand. Launching blanket offers to entice but it took too long to alter the rules of the tailored loyalty offers for customer seg- continue stocking the cheese at a loss — customers is no longer enough. Instead, program to embed short-term promotions. ments or specific individuals. It is also or face losing some of its most devout they expect to be rewarded accordingly This has been principally due to the lim- possible to do this analysis in real-time, customers. In this case, the supermarket for their long-term commitment and pre- ited options for organizations that are con- so businesses are able to present the achieved the right balance between gen- sented with personalized offers each and sidering launching a Loyalty program, be- most appropriate offers and rewards erosity and loss. Without this insight, a every time they engage with a business. cause they have to build a bespoke system while the consumer is engaged online simple decision such as this could have This article looks at the concept of ‘Loy- and manage it internally, then outsource — or, in fact, across all channels of in- had long-term negative implications for alty 2.0’: consumers are savvier today than programs to third-party specialist Loyalty teraction. One US online insurance bro- the business. ever before and businesses need to re- agencies, participate in another company’s ker saw sales go up by an average of $20 Social media has caused a radical spond. Loyalty program and purchase a specialist per customer with this approach. shift in consumers’ expectations. They solution and shoehorn it into the existing But the real value for the business is expect communications with businesses DISCONNECTED IT infrastructure. Until recently, companies the ability to easily identify the key loy- to be as quick, interactive and person- By Hanspeter Kipfer Launching successful Loyalty programs have been limited in their options — lose alty drivers, both online and offline, alized as when they log on to Facebook Vice President Applications has traditionally been complex. Although control of the Loyalty program or invest in against a whole host of variables. For ex- to interact with friends. The ‘Loyalty 2.0’ Oracle Eastern Europe and CIS they have been able to use and act on data additional IT resources. ample, a major French supermarket re- approach offers the potential to respond obtained from customer transactions, the cently faced low sales for one of its pre- to this shift. Failure to embrace it will se- HANDING LOYALTY BACK TOT he fact that 25 percent of purchases reality is that it has been a largely impossi- mium, specialist cheeses, which itself verely hamper loyalty efforts as custom- are now made online is a testament ble task of analyzing multiple reports in a MARKETING AND SALES had a niche customer base. The com- ers tune in to more interesting, engaging to the extraordinary growth of in- vain attempt to decipher customer trends Technology is now available that al- pany considered discontinuing the prod- and rewarding businesses.Opportunities and Challenges of E-Marketing in Russia tail sales for 2009 were $156 billion and ing only accounts for 3 percent to 4 per- to the search results returned to the user. When asked what would make them to will grow to $329 billion by 2010. This cent of the total expenditure in the Rus- This form of advertising is known as Pay- buy online, 58 percent said lower prices growth has been at the expense of bricks sian advertising market but this is grow- Per-Click. Professional agencies will work than in conventional shops, 50 percent and mortar stores. Russian consumers ing despite tough economic conditions. to optimize these campaigns, tracking the said a quicker and more organized delivery spent 110 billion rubles (approx. $3.5 bil- While the global credit crisis has hit adver- user from their initial search through to system, 58 percent a guarantee of prod- lion) online in 2008 according to the Na- tising costs across the sector, it has also the purchase. This constant optimization ucts’ quality and opportunity to replace tional Association of Members of E-com- forced companies to look for the most ef- is essential to bring companies the maxi- bought products and 42 percent wanted merce. fective ways to spend their reduced bud- mum return on their investment. a more convenient and secure system of The 19th release of “The Internet in gets. The Internet as a promotional chan- Companies can also invest in Search payment. While companies should look Russia” by The Public Opinion Founda- nel fits these requirements by giving com- Engine Optimization services that help to boost their brand visibility they should tion estimated that there are 28.7 mil- panies exact targeting and measurable re- their web site rank higher in the standard also seek to address these concerns by lion Internet users in Russia or 25 per- sults. Many Russian companies have yet search results. A good agency will not only users. cent of the population. That places Russia to adopt these western practices in track- help increase the web site position but ex- These trends from developed e-com- above Spain or Italy. In a report released ing e-marketing campaigns. amine the customer experience through merce markets and feedback from their this week, ComScore ranked Russia as the Russia is one of the few countries out the purchase process. The success of own consumers should give Russian re- fastest growing Internet audience in Eu- where Google has failed to dominate online shopping is put down to three key tailers food for thought. If they fail to es- rope, with June figures up by 27 percent, the search engine market. According to factors; trust, convenience and price. The tablish their position within this develop- compared to 21 percent growth in France the U.S.-based search research group ROMIR, released a survey ing market they risk loosing out to foreign By Nick Wilsdon and 15 percent growth in Spain. company commands a 33 percent market in August that investigated why Russians brands with advanced approaches to e- CTO E3internet−Marketing However the amount spent on adver- share compared to the 51 percent held by are reluctant to make online purchases. marketing. As the Internet sector in Rus- tising online in Russia is small compared local search giant Yandex. This figure rises These included a lack of information on sia matures it will become harder for new-E -marketing is an essential chan- to other countries. Figures released in to 60 percent when including, who the products (48 percent), delivery prob- comers to break the hold of established nel for businesses to promote their March this year stated that $590-$600m use Yandex results to power their portal. lems (34 percent), the process was too brands. The opportunities for Russian brands and increase sales. Accord- was spent in 2008 with an estimated 22 Both Yandex and Google run systems complicated (24 percent) and insufficient companies online have never been greatering to Forrester Research, U.S. online re- percent rise for 2009. Internet advertis- that allow companies to place adverts next payment methods (23 percent). than today.The MT Conferences section did not involve the reporting or the editorial staff of The Moscow Times.
  2. 2. Tuesday, September 1, 2009 M T C O N F E R E N C E S The Moscow Times ❖ 11Changes in Consumer Preference on the Internet The Domain: Invader or Victim people. In Moscow the number of Inter- years 91 percent use the Internet. And if AvtoVAZ acquired the rights to www.av- net users is not increasing as it used to, we look at Russia as a whole, this figure and domain names, since the market is already close to its becomes 83 percent which is a little bit while LAD-M failed to cancel the registra- saturation. If there were only 5 million lower, but still huge. tion of the and users in the capital 2 years ago, today This means that in midterm perspec- domains, since their registration occurred we see around 5.7 million people using tive the audience will grow owing to older before its trademarks’ priority dates. the Internet at least once a month, which groups (starting from 35 years) and we There is one more approach that stipu- is 60 percent of the Moscow population already see this in Moscow. lates that a domain name may not be clas- aged 12 years and older. Moscow is a good example when we sified as a result of intellectual activity and Although in other big cities like St. Pe- talk about Russian Internet market per- means of individualization, and, therefore, it tersburg and Yekaterinburg the level of spectives. But there’s always the back- is illegal to use the concept of priority in re- Internet penetration is a little lower than side of the medal. By increasing the pen- spect of domains. In this regard it is recom- in Moscow, it’s considerably higher than etration level, the Internet suffers a risk mended to use the legislation on protection in the rest of the Russian cities. In St. Pe- of losing the premium status of its au- of competition. tersburg 54 percent of the population has dience. A few years ago we were saying This approach seems to be more ad- access to Internet and in Yekaterinburg it that the biggest part of the Internet audi- equate since it is based on actual provi- is 56 percent. ence is the most attractive to advertisers sions of the legislation. Besides, single use Gradually the regional cities become segment — active, well-to-do, advanced of ‘first come, first served’ principle without By Inessa Ishunkina more like Moscow, not only in terms of consumers of middle and young age. And By Anna Shmalyuk Intellectual regard for all the aspects of a case does not Project director the Internet users number, but also in they are still there. However we saw that Property Specialist bring an equitable resolution. TNS Russia terms of Internet access type available to apart from them, there are other catego- Capital Legal Services The legislation on protection of com- their inhabitants. Thus, in July 2009 the ries of the population among Internet us- petition, however, is not always appro-T he Internet occupies quite a unique broadband access to Internet from home ers. In other words, by its structure of n the Middle Ages, domains were a priate to use, since competitive relations place in the Russian media market. On one hand it’s unlikely that any-one will doubt its mass character, and onthe other hand the number of Internet us- was available to 17,982 million Russians, and from their office or school — to 5 547 million people, which exceeds last year’s figures by 47 percent and 3 per- the audience, the Internet begins to look more and more like the Russian popula- tion in general. The same thing happened to the TV audience at some point in time. I privilege of the crown and its vassals. Domains served as a means of en trenchment of royal power and as the main should exist, and that is difficult to con- firm in the case of classic cybersquatting, which consists of registration of a domain name solely for purposes of its resale and source of income of feudal lords. Althoughers continues to grow. cent accordingly. And thereupon the de- All the above refers to Internet in gen- the domain moved from the tangible world provided no commercial activities are con- Thus since the beginning of 2009 the velopment of the broadband Internet of- eral. However, the picture will be incom- to the virtual reality and almost anyone can ducted under such domain name. The pro-number of the Russian Internet users fers big opportunities for providing more plete if we don’t mention the web proj- become the owner of a domain, the value visions of IP law cannot be applied either, ects that attract most people irrespective of some domains is quite equivalent to the as far as potential mixing with a trademark of their socio-demographic characteris- value of a fief. For instance, a $22 million pertaining to similar services/goods shouldToday, at least 60 percent of the Moscow tics and behaviors. Among the top 5 Rus- bid was made at an Internet auction for the occur following use of a domain. sian Internet portals there are Yandex, domain name. Lack of proper legal regulation also cre-population that is 12 years and older uses the, Rambler and social networks The number of domains in the world ates grounds for so-called reverse do- and Prac- main hijacking by registering a trademark.Internet at least once a day. tically every Internet user visits one of the wide web, which celebrated its 20th Although the Russian Civil Code prohib- anniversary this year, is growing rapidly: mentioned web sites once a month. As This July the number of domain names in its registration of a trademark identical togrew by 6 percent. According to the July complex Internet content to users. of July 2009, the total audience of these the .ru zone stepped beyond the symbolic a domain name registered earlier, the no-2009 TNS Web Index data 32.2 million The Internet usage is influenced web sites is around 22,287 million Rus- milestone of 2,222,222 names. Domains tion of identity provides vast opportunitiespeople use Internet on average once a mostly by the age of the audience: the sians, which is 1.3 million greater than in are becoming ever scarcer with each pass for speculation.month, and 19.1 million people use it on younger the Russians, the higher is the January 2009. ing year, as currently there are no four- The procedure elaborated by the Worldaverage once a day. share of the Internet users among them. Hence the Russian Internet contin- letter .com domains or three-letter .ru do- Intellectual Property Organization, called We witnessed the most considerable There are practically no youngsters left ues to demonstrate positive dynamic de- mains left. the Uniform Domain Name Dispute Reso-growth 10 percent in the relatively small that don’t use the Internet. For exam- spite of the current difficult economic sit- The number of disputes is growing at a lution Policy, which is applied to resolvingcities with population of around 800,000 ple, among the Muscovites aged 12-24 uation. commensurate rate, both between the domain disputes in approximately 60 do- owners of domains and with holders of main zones, including .com, .net and .org. exclusive rights to means of is more efficient. The WIPO has over 10Anti-Virus Software Is Not Enough individualization, and the number of cases of Internet fraud years examined over 15 thousand cases within the framework of the UDRP. The main requirement of this method, with is likewise growing, as they take the form of cybersquatting (registration of a domain respect to registration and use of a do- motion and we have to be able to proac- portance on the management and protec- name which includes another party’s main name, is that a bona fide intent is tively manage and protect this vital as- tion of this vital asset. trademark or a company name, for the present. Within this context the Resolu- set. The new legislation on protection of This kind of information can be alarm- purpose of its sale or advertising the tion of the Presidium of the Supreme Ar- private information coming into force in ing, but businesses should not panic. It’s squatter’s own goods or services), bitration Court on a case pertaining to the Russia 1st January 2010 will require both important that businesses and users of the typosquatting (registration of well-known domain name is rather signif- public and private sector organizations to Internet understand the seriousness of the domains with insignificant ‘typos’ to attract icant, since the court took into consider- comply rigidly with the rules on how this threat, but at the same time it is possible clients from other sites, for instance ation the resolution of the WIPO Arbitra- information is secured. to protect information effectively. or jandex. ru), or phishing tion and Mediation Center and indicated Every year Symantec issues an Inter- The most important factor to bear in (creating domains for the purpose of har- that the UDRP may be used for resolving net Security Threat Report which pro- mind is that attacks are becoming more vesting personal information from a user). court cases with respect to the domains in vides a view of malicious activity detected sophisticated and merely installing anti- One instance of cybersquatting was the the .com zone. by our Global Intelligence Network. More virus software is not enough to protect a registration of the domain In recent years, particularly in connec- than 240,000 sensors in over 200 coun- system. name, which coincides with the name of tion with the new forthcoming system of tries monitor attack activity on the Inter- Malicious code these days consists of the Federal Service for Intellectual Property, generic top-level domains (New gTLDs) net. Our latest report issued in April 2009 several components, all of which attack but owned by a private patent agency. introduced by ICANN and delegation of the showed that we blocked more than 245 a computer sometimes simultaneously. Unfortunately, Russian companies are Cyrillic domain .rf (.рф), problems associ- million attempted malicious code attacks A user can unwittingly download a Trojan reluctant to take legal action to protect theirated with domain names are being exten- worldwide every month during 2008. by clicking on an automatically-generated rights, as they prefer buying domains, thus sively discussed and new regulations are By Nick Rossiter As malicious code attacks contin- spam message, the Trojan can then install facilitating the growth of this illegal being developed. Nevertheless, the cur- Regional Director Russia/CIS ues to grow at a record pace we’re also code that disables a computer’s security business. However, court practice shows rent situation requires prudence from the Symantec Corporation seeing that attackers have shifted away reporting function, and sends out instruc- that in some cases it is possible to succeed. owners of domain names and trademarks: from mass distribution of a few threats tions for other functions to be executed Domain disputes of an economic nature prior to registration of a domain or filingT he Internet security threat land- to micro-distribution of millions of dis- such as gathering user id and passwords, are examined by commercial arbitration a trademark application, one is advised to scape has become more sophisti- tinct threats. Cybercriminals are profiting and so the process continues. With this courts, and companies that provide make sure that there are no possible ob- cated and more aggressive, requir- from creating and distributing customized type of threat an anti-virus alone would services on registration of domains may be stacles and to assume complex measuresing a more sophisticated form of pro- threats that steal confidential information, not protect a computer. engaged in such proceedings as third against their occurrence in future.tection for computers and users. Mali- particularly bank account credentials and Companies must install software with parties.cious activity has increased sharply over credit card data. multi-tier protection — including firewall, In some cases courts refer to priority ofthe past year, compelling users to adopt Web surfing remained the primary network access control, anti-virus, anti- CAPITAL LEGAL SERVICES rights when resolving such disputes. Thus,more sophisticated protection software. source of new infections in 2008, and this spyware, host- and network intrusion pre- Attorneys at lawNinety percent of malicious code activity trend is continuing into 2009. Attackers vention, application (software) control andconcentrates on stealing confidential in- are relying more and more on custom- device control. Moscow: + 7-495-970-1090 St. Petersburg: +7-812-346-7990formation. Malicious activity continued to ized malicious code toolkits to develop The unfortunate reality is that innocentgrow at a record pace throughout 2008 and distribute their threats. Threats with a web users can visit a compromised web Full range of legal servicesand into 2009. keystroke-logging capability—which can site and unknowingly place their personal • Corporate and Þnance transactions • Protection of intellectual property Traditionally we just looked at keeping be used to steal information such as on- and financial information at risk. Or plug- • Tax advice and tax litigation • Domain disputes resolutionthe bad things out, now it’s about keeping line bank account credentials—made up ging in an infected USB device can dev- • Real estate transactions • Protection of trademarks andthe good things in as well! The informa- 76 percent of threats to confidential infor- astate an entire network. Computer us- • Dispute resolution copyrightstion companies have and need to run their mation, up from 72 percent in 2007. Or- ers have to be extra vigilant about their se- advertisingbusinesses is growing at over 60 percent ganizations in Russia have a much larger curity practices, and they need to care-per year. We now have the virtual officeand the information follows the employee volume of personal information when compared to their counterparts in the rest fully investigate the technology available to ensure their systems are protected at SURF THE CRISISaround so it is vulnerable at rest and in of the world, which places even more im- all levels. WWW.CLS.RU