The document outlines the growth of the online classifieds market in Russia and Ukraine, highlighting its potential and unique local characteristics. Strategies for creating and managing classified sites are discussed, including partnering with national sites and audience acquisition methods. The future trends indicate that mobile and social media platforms are reshaping online classifieds, increasing competition and the need for innovative features.

1. Growing Online Revenue:
Advertising, Sales and Classifieds
Moscow, Russia
27 – 28 September 2012

2. Agenda
Topic Presenter
 Online Advertising Market Overview Ross
 Sales Teams: Organization & Motivation Ross
 Advertising Networks Ross
 Online Classifieds: Local Opportunities Ross
 Social Media: Building Audience & Revenue Kevin
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3. Online Classifieds
A cautionary tale : “Now you see them…now you don’t!”
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4. Online Classifieds
Many different types of online classifieds businesses exist.
The Big Three
Recruitment - Jobs Real Estate/Rentals Auto
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5. Online Classifieds
But online classifieds also encompasses directory products, free
classified services, and calendars.
Directories Free Classifieds Calendars
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6. Online Classifieds
And there are dozens of other specialty sites - a few examples.
Dating/Matrimonials Education/Course Listings
And many more, often very successful specialty sites – motorcycles,
surfing, biking, wedding services, pets,...
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7. Online Classifieds
Online classified advertising in Russia and Ukraine is in the early
years of development, but still represents a potentially large market.
Estimated Online Classified Market Classified Advertising Overview
(millions) Online revenue is often from print
€70 – 100 revenue
mm
Fundamentally changes the nature
of print classifieds
Requires data to manage the
€15 – 25 mm
business online and in print
Cost accounting information
critical to managing the transition
from print to online.
For comparison: US = € 2.0b
India = €130 mm
Source: Company reports, 2011; eMarketer, Avendus
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8. Online Classifieds
The online classified market in Russia and Ukraine has attracted
many large international competitors.
Alexa
Rank Site Category Corporate Ownership Alexa Rank Site Category Corporate Ownership
#18 Avito.ru Free Classifieds Privately Held - Accel Partners (US) #30 Slando.ua Free Classifieds Allegro Group/Naspers (S. Africa)
#27 Auto.ru Auto Privately Held #59 Work.ua Recruitment Privately Held
#28 Slando.ru Free Classifieds Allegro Group/Naspers (South Africa) #88 Rabota.ua Recruitment Grupa Pracuj (Poland)
#45 Drom.ru Auto FarPost Group (Vladivostok) #119 Freelance.ru Recruitment Privately Held
#50 HH.ru Recruitment Mail.ru (Naspers 29%) #164 Avtobazar.ru Auto Privately Held
#62 TIU.ru Directory Allegro Group/Naspers (South Africa) #187 OLX.com.ua Free Classifieds Naspers (South Africa)
#92 IRR.RU Free Classifieds Trader East Media/Hurriyet (Turkey) #192 Infocar.ua Auto Privately Held
#150 OLX.ru Free Classifieds Naspers (South Africa) #195 AutoUA.net Auto Privately Held
#218 Rabota.ru Recruitment RDWmedia.ru #308 Jobs.ua Recruitment Privately Held
#241 Molotok.ru Free Classifieds Allegro Group/Naspers (South Africa) #434 AutoPortal.ua Auto Privately Held
#304 Autonews.ru Auto RBC Holdings/Handelsblatt (Germany) #476 Domik.net Real Estate Privately Held
#338 AutoRambler.ru Auto Rambler Group
#351 Job.ru Recruitment Trader East Media/Hurriyet (Turkey)
#401 FarPost.ru Free Classifieds FarPost Group (Vladivostok)
Due to its small size and unique language, the Georgian online
classified market is dominated by a few local competitors
– MyMarket.ge and sister sites, jobs.ge, HR.ge, …
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9. Online Classifieds
What do you think are the main characteristics of the online
classified markets in Russia and the Ukraine?
Databases: All are powered by structured databases of content:
- Auto = Make, Model, Year, details, …
- Real Estate = Location, Size, details, …
- Jobs = Job Category, Job Title, requirements, …
Content: Content is mostly contributed by the user/advertiser.
Transactions: Most sites do not complete the transaction.
When a site enables a transaction to be completed (payment paid, product
delivered), it is an e-commerce site.
The basics of the site are still the same.
Local: Very few large competitors exclusively local.
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10. Online Classifieds - Strategy
Depending on the type of classifieds and your company’s strengths,
there are several different local classified strategies to consider.
Go It Alone: Build, sell and market your own classified advertising site.
Build a Network: Work with other local media to create more audience,
build one site together; each partner markets and sells the site separately.
Partner with National Site: Work together with a national classified site.
National classified site provides technology platform, perhaps national
marketing and sales; local partners sell and market in locally.
Traffic Partnership: Sell a traffic sponsorship to a national partner; do not
create or sell local online classified advertising.
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11. Online Classifieds - Strategy
“Go It Alone” strategy requires technology, sales and marketing
strengths.
KP22.ru “Go It Alone” Overview
Build, sell, and market an independent
classified site.
Strengths Required:
- Dominant offline classified business
- Strong local sales and marketing
- Strong technology team
Risks:
- Focused competition from national site
- Cannibalization of print by online
Longterm Strategy:
- Dominate locally; expand regionally
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12. Online Classifieds - Strategy
“Build a Network” builds on a group of similar like minded media
sites to seize a larger part of the online audience for classifieds.
“Build A Network” Overview
Partner with other similar media
companies to build a larger audience to
compete with national players.
Strengths Required:
- Good offline classified business
- Strong local sales and marketing
- Strong technology team
Risks:
- Focused competition from national site
- Cannibalization of print by online
Longterm Strategy:
- Dominate locally; expand network
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13. Online Classifieds - Strategy
“Partner with National Site” strategy recognizes that national sites
have strong technology and local media have strong local sales and
marketing.
“Partner with National Site” Overview
Partner with a national classified site.
National site provides technology; local
partner provides sales and marketing.
Strengths Required:
- Good offline classified business
- Strong local sales and marketing
Risks:
- Cannibalization of print by online
- National site takes over sales and
marketing at the end of the contract
Longterm Strategy:
- National site wins; exit classified business.
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14. Online Classifieds - Strategy
“Traffic Sponsorship” leaves all sales, marketing and technology to
the larger national competitors.
“Traffic Sponsorship” Overview
Sell a national classified site the ability to
gain new users by linking their site to yours.
Strengths Required:
- Strong local web traffic to main site
Risks:
- Traffic fluctuations.
- Negotiations
Longterm Strategy:
- Focus on traffic growth.
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15. Online Classifieds – Business Operations
After selecting your strategy, there are two key areas that need some
planning – content acquisition and audience acquisition.
Content Acquisition: The Problem of The Chicken & The Egg
- Classified sites with no content have no audience
- How do you get the content to start?
Source #1: Offline Classifieds
- Create an automated/manual post system to ensure that each offline
classified ad is included on the new online site.
- Evaluate reverse publishing from online to print.
- Evaluate charging for cross-posting online to print, print to online
- Technical integration can be difficult and time consuming process
Source #2: Aggregation
- Create an automated tool to “copy” free classifieds from other sites
- Create a process to input classifieds from free-standing bulletin boards.
Source #3: Consumers Direct
- Create pricing and promotional offers to encourage new posts.
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16. Online Classifieds – Business Operations
Audience acquisition often requires large amounts of marketing
support to start.
Audience Acquisition: How do I generate trial?
- What can I do to get people to try the site?
- Post an Ad? Respond to an Ad?
Source #1: Offline Marketing
- Use your own in-house media to create awareness and generate trial
+ Contests that link print and online classifieds (e.g. treasure hunts)
Source #2: Online Marketing/SEM/Social
- Make your site as visible to search engines as possible
- Track views per ad; evaulate buying search traffic to guarantee ad views
- Evaluate creating a social media page for your classified site
+ Distribute ads on the page.
Source #3: BBS Seeding
- Find local BBS’s where you can cross post important ads to generate trial.
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17. Online Classifieds – Business Operations
Increasingly online classified advertising takes a free plus premium
services model.
Free: Most general classified sites, many directories and calendar sites are
free to post a standard listing.
For completely free to post sites, all revenue is from contextual ad networks,
like Yandex Direct and Google AdSense.
Many free classified sites require commercial sellers to pay.
Free + Premium: In these models, a standard basic ad is offered free to
generate content. Then the client is allowed to add new features for small
additional fees.
Typical Premium Features include:
- Pictures - Bulk upload
- Web links - Anonymous email contacts
- Video - SMS notification
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18. Online Classifieds – Business Operations
Pricing can also involve bundling and upselling from your offline
product.
Upselling: Adds a special premium usually to the print ad to automatically
cross post to the online site.
- Upsell is often calculated as a percentage of the base price
- Upsell % are generally small, but should reflect all the costs of cross
posting and some margin
Bundling: Used especially with small businesses and frequent classified
users to encourage volume buying.
Typical bundle might be volume packages – Buy two get one free.
But a cross media bundle may also work to encourage online users to try
print.
“Place your ad online for free and
get 50% off of the price of a classified ad to also include it in print.”
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19. Online Classifieds – The Future
Classifieds meet a simple need to publish small bits of structured
information.
In the simplicity is the source of the speed of their evolution.
Online Classified Trends
Mobile: The emergence of classifieds in India and Africa have created
demand for mobile posting, access and payments.
Social: The growth of FaceBook and other social media have created a new
way to post and distribute classifieds.
Payments: Mobile and online payment processing have made online
classified sites much more like online e-commerce sites.
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20. Online Classifieds – The Future
Mobile classified platforms have boomed in India and Africa.
Roopit.com
SMS classifieds
Based in Bangalore
Free to list or search
Also Verse Technologies
Google Trader (goo.gl/trader)
•Launched in Africa and Thailand
•Allows for free listings
•Designed for activity on mobile
phones
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21. Online Classifieds – The Future
Classifieds on Social Platforms like Facebook and Twitter have moved
classifieds to a more secure personal platform.
FaceBook/Oodle.com
Oodle built app inside FaceBook
Provides some security, friend or
friends of friends
Rapidly building audience
CLDmkt.com
•Built as an application on Twitter
•Simple listing creation
•Access listings online, on Twitter,
on mobile
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22. Online Classifieds – The Future
Classified sites are also undergoing a rapid conversion to e-
commerce sites with the development of simple mobile payments.
Square
Brings credit card transactions to
individuals
Simple sign-up and service
Processing US $ 8 billion in 2011
M-Pesa/SafariCom
•SMS enabled banking system
•17 mm ises in Kenya/10 mm in
Tanzania
•Creates bank accounts for people
with bank services
•Provides for simple person to
person transfers
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23. Online Classifieds - Summary
The online classifieds market is a small but rapidly growing market in
Russia and the Ukraine and will present both opportunities and
challenges.
Strategy: Know your strengths and weaknesses.
- When to enter the market?
- Why to enter the market? Protecting core offline classified revenue? Or
new business?
- When to exit the market?
Operations: Be aware of the need to stimulate classified content which will
build audience.
Pricing models need to reflect the competition and internal costs.
The Future: The simplicity of the model results in rapid fragmentation and
the evolution of new features.
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