8 Interesting Things About Russia

June 22, 2009

Here’s a list of some of the most intriguing social media insights about Russia that the class uncovered this week:

  1. Russian social networks are huge, but insular. There are two large social networks in Russia that the vast majority of Internet users belong to – Odnoklassniki.ru and Facebook-clone Vkontakte.ru. These networks are almost wholly in Russian and present an important, but insular, form of social networking between Russian speakers – but also prevent the rise of more global players like Facebook or MySpace who are each setting their sites on expansion in Russia.
  2. Yandex is a Google-killer (so far). Russia is one of the few countries besides China (with Baidu) that has a dominant local search engine that trounces Google, and given the Russian sense of pride in this achievement, it shows few signs of changing anytime soon … even despite Google co-founder Sergeiy Brin’s Russian background.
  3. Moscow area accounts for over 70% of Internet usage in Russia. The majority of Russia is largely rural and sparsely located, particularly when it comes to Internet usage. The implications of this for social media marketing programs is that it may be reasonable to have a real life element to a program if the majority of people are in relatively close proximity to one another.
  4. Twitter isn’t redefining social media in Russia. Social networking is still the king of social media in Russia, followed by blogging. When it comes to Twitter, the site has been hampered in its growth due to difficulty users have with the comparatively long Russian alphabet and fitting meaningful dialogue into 140 characters. Come to think of it, we have that problem in English too …
  5. Mobile adoption is huge … and mobile marketing is on the rise. Though mobile penetration by some accounts is even more than one per person (a strangely confusing stat), there is no doubt that mobile messaging is the communication of choice for the country’s youth. Marketing through this channel, though, is growing but has not yet reached full maturity.
  6. Russia is much more than one market. Several sources of marketing reading looking at the entire country pointed out that what works in Moscow won’t in Siberia. From ethnicities, to languages, to cultures, the nuances of Russia create a challenging communications environment.
  7. Russia’s President has a video blog. Currently on LiveJournal (interesting platform choice), the leader of Russia does have a video blog and tends to keep it relatively up to date. It’s an interesting irony as the government is still notoriously sensitive to criticism, yet it does signal an acceptance from the Kremlin that these tools are important and can have a global impact.
  8. Rise of aspirational Russian advertising. For many years, advertising in Russia was of necessity and simply relayed information to people on where to buy something. In recent times, this has shifted to advertising that actively sells and promotes – and is mostly aspirational.

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Mind Needs to Catch Up With Growth

June 20, 2009

I was shocked to find that Russia has the fourth largest social networking market and the fastest growing internet population in Europe (internet users grew 27% year over year in June 2008).  It’s wonderful that this large country is becoming connected in the online world in such a fast paced manner. Quick to jump on the social networking band-wagon, the top ranked Russian social networking sites, in particular Odnoklassniki, does not yet understand the basic rules and principles that we’ve come to learn the hard way.

The “walled-garden” of the AOL days in the 90′s are a distant memory but taught us all a great deal about the internet.  Suzanne Choney said it perfectly when she described it as “the internet on training wheels.”  In the mid-1990′s, we were all content with our knowledge and use of the AOL internet as we knew it (moderated chat rooms, pre-spam, “You’ve Got Mail,” and all), but only because we had no idea of what it could be.  In just the past 10-15 years, we come very far in both what the internet can do for us and our scope of what the internet will hold for us in the future.  Now we have Social Media tools that have allowed us to grow and learn immensely like Blogs (i.e. WordPress and LiveJournal), Social Networking (i.e. Facebook, MySpace, LinkedIn), Micro-blogs (i.e. Twitter and Jaiku), Wikis (i.e. Wikipedia, wetpaint), Social Tagging (i.e. delicious), Collaborative Social News (i.e. digg), Collaborative Opinions (Yelp, Epinions), Photo Sharing (i.e. Flickr), Video Sharing (YouTube), and Virtual Worlds (i.e. Second Life), to name a few.  Things only kids dreamed of in the ’90s…

With all of this, came a progressive sort of learning.  We learned what worked.  We learned what didn’t work.  It was a hit or miss.  Trial by error.

Russia has advanced so rapidly in its population’s online activity that the users are simply unaware of the “olden days” of the internet.  For them, the internet IS social media, and it’s never been anything different.

So the question is, do they fully understand what makes the internet, as we know it now, work?  I’m not so sure.

The entire notion of breaking the “walled-garden” allows users to converse, interact, and exchange freely and openly, not matter what.  When I read a post by Russian blog guru Svetlana Gladkova, I was not too surprised to hear Svetlana’s reports that popular social networking site (similar to Facebook) called Odnoklassniki restricts members from sending messages with any text containing its largest competitor’s name (Vkontakte.ru).  Further, it also restricts specific images and logos that users post in order to display to their friends that they’ve ‘moved on’ from the Odnoklassniki site to Vkontakte.  Sounds to me like Odnoklassniki is doomed to fail.  The minute users feel like they are being unfairly restricted, surely they will jump over to the more free (and popular) option.  But, how could they know any better?  They didn’t get to see the movie…

There are probably even more examples of this happening in Russia, but alas, I do not read Russian, and not many have been translated into English (scroll to bottom).

Facebook, on the other hand, does know better.  Facebook does not censor its competition from user’s messages and images.  On the contrary, Svetlana even reported that it advertised for Odnoklassniki on its new Russian language Facebook site.  With these types of thoughts and ideals, Facebook is sure to remain #1 for quite some time (and grow to be #1 in countries where it has just started up).


Russia – What are you doing?!

June 18, 2009

russia apple

Russia is on the verge of social media explosion. Yes – Russia!

The former closed communist state is already the fourth biggest market in Europe for social networking. One of the main social networks in Russia, Odnoklassniki (Одноклассники) is reporting 30 million registered users. The site, which connects classmates, is used in both Russia and the Ukraine and attracts 8 million visitors each day.

The problem is these sites only allow Russians to speak with Russians and little interaction is taking place with the rest of the world. The internet is bringing down the ‘cyber walls’ across the world and it is beginning to happen in places like Iran and Russia.

Take for example the Twitter explosion currently happening around the recent Iranian elections and subsequent protests. Iranians flooded the site to get word out about police beatings and information to outsiders about social unrest happening in the streets of Tehran.

To make this social media explosion happen citizens need to network outside their borders. Recently, Facebook has taking a $200 million investment from Digital Sky Technologies, an Internet holding company with Russian roots. This will help Russians talk more outside their borders.

This social media explosion will not come from broadband access and home computers but from use on mobile devices like cell phones. Take for example this interesting statistic that Russian mobile phone penetration is a wacky 131.4%, so one in every three Russians has two cell phones!

What we are seeing with Iranians distributing information by social networks will grow from behind the iron firewall of Russia.


Social Media, Social Impact & Russia

June 18, 2009

“Social Media for Social Good” is a topic we have covered a great deal in our classes specifically looking out how we, as communicators, can leverage this in our own work moving forward. In the United States we have seen how social media can impact a Presidential campaign, raise awareness, provide real-time information and breakdown barriers of communication.

This week, we were given the assignment of researching Russia and its use of social media. In doing my research it was fascinating to find out some interesting statistics about the country.  I should preface this by saying, that at first they may not seem related, but be patient, I’ll get there.

In terms of social media, Russia has the fastest growing internet population in Europe behind France and Spain. Social networking has exploded onto the scene  and the two most popular networks currently in Russia are Vkontakte.ru. and Odnoklassniki.ru,. SO suffice to say, there is great potential with the growing internet population and the power of a two-way conversations.

Then in my research, I came across an alarming story and statistic about the growing AIDS epidemic in Russia. The number of people in Russia living with HIV has more than doubled since 2001. This caught me off guard because typically when you are talking about AIDS – the discussion goes to Africa. Quite honestly, it made me begin to wonder why Russia wasn’t spreading a more effective AIDS awareness message in the country and abroad.

That is when I turned my attention to what organizations were doing on the ground to spread the message of AIDS awareness and protection. The most promising organization I found was a STOP AIDS webpage found here and partnered by the Kaiser Family Foundation. Picture 10

In 2005 the country started what a campaign to educate its population of the AIDS epidemic through the use of television and radio programming and print editorial content, consumer products placement, an extensive interactive internet campaign and free print and online information resources.

So the question I bring to the table is: How can organizations on the ground in Russia leverage the power of social media to increase HIV/AIDS awareness and education? At  the very least bring more people to the site mentioned above. The materials that are currently used to spread awareness are largely one dimensional communications tools where the organization is talking at the target audience as apposed to talking with.

I don’t think that I can even begin to scratch the surface in a blog post but I believe that Russia has yet to tap into power behind joining the conversation and bringing about social impact through the implementation social media.


Cultural Relativism and Entering the Russian Digital Market

June 18, 2009

Let me share a work anecdote with you…I handled the communications component of a public health plan to combat the potential of pandemic avian influenza. The goal was to create a simple, concise and substantiated messaging platform for an international organization that could be used across part of the African continent.  During the bird flu scare a few years ago, experts from the CDC and the World Health Organization were urging people to wash hands several times a day as one of the key ways to minimize risk of infection. These two bodies know more about disease than anyone else. You might assume that our sub-Saharan campaign was therefore built around this key point. But the reality is many people in large parts of the world do not have ready access to water. Water is a valuable life-sustaining resource in much of Africa and not something squandered on hand washing, no matter how important it might be to prevent disease. Developed-world assumptions that everyone has access to water and Western thinking about what constitutes hygiene would have made absolutely no sense in many regions of Africa. The point is it is critical to be aware that we don’t even know what we don’t know about other nations, no matter how worldly we (think we) are. Challenge everything you take for granted from a strategic and communications standpoint when heading overseas.

As regards American companies looking to enter the Russian market through the use of social media, they need to be aware that they face a similar type of cultural relativism challenge. In a video interview with Edward Shenderovich on John Bell’s blog, the lead strategist of the Moscow online media company SUP  explains that while multinational businesses tend to behave similarly no matter where they operate around the world, consumers act differently based on culture. What works in the U.S. or in Europe will not work in Russia. People simply live different realities and have different mindsets depending on where they live. This insight can be gleaned from interpreting Mr. Shenderovich’s remarks:

>Americans are interested in individuality, whereas in Russia, community is the prevalent desire. Russians want to be like other Russians. They seek community feedback to confirm their identity. Corporate messages should therefore be designed to show how the product or service being marketed helps the consumer fit in, not make them better or different. For example (using a beverage brand), it would be better to show videos on Russian YouTube of a group of “average” consumers enjoying themselves in a pub all drinking the product than having a celebrity shown cavorting about with beverage in hand. On Russian social networks, getting real people (who would have to be solicited and converted to the brand before hand) to casually mention that they consider the product their beverage of choice would be better than introducing the beverage with a social network promotion like this one. If Svetlana’s friend likes the drink, there’s a chance she’ll try it to “fit in.” Using consensus tactics in Russian social networks may be the best sales approach.


It Takes One To Know One

June 18, 2009

Although Russia is one of the fastest growing Internet markets in the world, they have been known to reject outside information and influence. Successful marketing and advertising of one’s brand in Russia is imperative for sustainability. In order to achieve acceptance in Russia, one should partner with a Russian firm to gain the trust and understanding from their Russian audience.

Social media tools that thrive in Russia include:
• Одноклассники (http://www.odnoklassniki.ru/), a site that connects classmates in Russia and Ukraine.
• В контакте (http://vkontakte.ru), a site aimed to keep friends, coworkers and classmates in touch.
• Facebook and Twitter have become increasingly popular in Russia, but yet to compare with the 28-30 million users reported from the other sites.

Although innovative, Russians have yet to penetrate the social media sector. In order to successfully infiltrate a brand into Russia, one should partner with a local firm and allow them to be a part of the brainstorming process. Providing an authentic idea, with a Russian twist could make or break the business received in Russia.


French, German, Russian… oh my! The world beyond the Anglosphere

June 18, 2009

Two weeks of vacation this summer and where am I headed? London and Paris. Last summer, I trekked to Denmark. My list of past travels continues: Belize, Philippines, Mexico, Greece, and more.

Manila from a ferry

Manila from a ferry

As I’ve grown older, my idea of paradise is a new country, new culture, new museums, new sites, and new stores (shopping must always be on the schedule)! But send me to a website beyond the Anglosphere, a term coined by author Neal Stephenson, and I scurry back inside my cave, reverting to a sheltered online existence. I don’t know what to do or where to look. My sense of adventure simply evaporates.

It is this same thinking that encourages Internet-savvy entrepreneurs outside of the Anglosphere to set up their own blogs and social networking sites in their own language. They have seen first-hand the mistakes many English-speaking companies have made trying to pitch their products without regard to the culture. Is this just my English fixation speaking to me as suggested by reporter Virginia Heffernan?

For Russia–the fourth largest social networking market in Europe–the top two social networking sites, Vkontakte and Odnoklassniki, are not known anywhere beyond Russia and Russian-speaking ex-pats. Popular American sites Facebook and MySpace have very little penetration in the market. And why should any Russians switch? Vkontakte looks like a dead-on replica of Facebook.

Vkontakte

Despite these challenges, I found Russians Twittering, blogging, and connecting in English. Again, why would they make that choice? It really boils down to choice. Vkontakte and Odnoklassniki only connect Russians with Russians. You won’t find an Italian or an African. No one will be there from Sweden. The same goes for Australia.

If you want to connect to the world, English is the universal language for business. It is also the language of a majority of the online world–for good or for bad.

Yes, my thinking is Anglocentric and may ruffle feathers, but the Internet is supposed to break down language barriers, not build them. I may not be able to truly explore Russia by joining the country’s top social networks, but thanks to English speakers in Russia, I can still cross the virtual ocean to meet.


Russia Gets It!

June 18, 2009

In a world of innovation, how connected do you have to be? Americans have definitely taken advantage of being ‘connected.’ This probably has contributed to our lack of human interaction and face to face conversations. Nevertheless, we’re definitely wired.

While researching Russia, many key insights about their culture and connectivity were apparent. Just the quick run down, they have about 45.8 million Internet users, with about 32.7 of them having continuous access to the Internet. In 2013, according to New Media Trend Watch, the Internet users will jump to about 61.9.  For those slow pokes who need some type of benchmark or context to compare that data to, can look to research analysts who state that the US online users will be around 200 million by 2013. With all that said, we will definitely be more socially inept as years pass by. Needless to say, the exploration of Russia was enlightening and very rewarding.

After 15 years of being online, Russia has had impressive growth. Bill Flick, wrote an extensive piece on Russia’s Internet presence. All you really need to know is that they have yielded about a 27% increase of users from 07-08.  What does this mean for brands wishing to tap into this market? It means you have visibility and an opportunity to make a very large impact in a growing community.  Side-note, and by far the best part of my research was finding out that their homeless are web-savvy. Hands down, favorite. On Global Voices, many people commented to this interesting information.

I can't read it, but pictures are worth a thousand words.
I can’t read it, but pictures are worth a thousand words.

Okay back to business, information that a brand would probably want to know is that 85% of  that 45.8 million I mentioned above shop online. This blog even let you know what they like, which are books, computers, home appliances, software, movies, beauty products, and music. That seems to pretty much cover a wide range of interests. Next, they have a very good grasp of social networking. Svetlana Gladkova, serves as an authority on this topic. Two of his blogs cover the main players in social networking in Russia, and how 69% of companies have blocked these networks from their employees. Yikes, I couldn’t imagine what Facebook devotees would do here in America if that happen.  All in all brands have a very conducive atmosphere to market their brands.


Social Media in Russia: Power To The People!

June 18, 2009

(^MK) Imagine you just turned 18 years old. Looking back at your youth, what would you think? Maybe you’ll think that the time went by so quickly. Maybe you will notice that you have learnt so much, but there is still so much ahead of you (university, work, etc). As an 18-year-old you gained your first experiences, such as travelling, your first girlfriend or passing a major exam. But you are still young. You still have many more things to learn and understand – compared to somebody who is alive for 222 years.

I am comparing the young live of the democratic Russian Federation with the life of a young man. On December 25, 1991 the communist Soviet Union ceased to exist – and a new democratic Russian country was born. Back in 1787, the United States Constitution was adopted by the Constitutional Convention in Philadelphia, PA and laid out foundation for the North American democracy. The American people is a 222 years old democracy.

And as everybody agrees upon, media is essential for democracy. Here lays maybe my key insight when I did research for today’s QOTV: it is essential for corporate communicators to understand the fact that a young democracy is using the Internet slightly different than the people of the democratic Western hemisphere.

 social media in russia is on the rise!As our class literature Kiss, Bow, Or Shake Hands by Morrison and Conaway reveals, it is not customary for Russian people to disclose personal information, such as telephone numbers. The result of that is, for example, that no official residential phone book exists. From that, one can conclude that Russians, suspicious of political leadership, tend to be careful to publish personal information online (through social media outlets for instance).  This is an important fact for doing online business, which tracks names, addresses, credit card numbers, etc.

Another good insight for implications related to the young media democracy is the fact that the demise of the communism party has changed the Russians social structure and taken a lot stability form one day to another. Kiss, Bow, Or Shake Hands outlines that this stability is now being sought in new different institutions, such as church – and social groups.

As the examples, Odnoklassniki and VKontakte show, the influence of social media is growing in Russia: Both social networking sites combine more than 60M users. However, related to the total Russian population of about 140,000,000 this is still a small percentage.  However, the Internet penetration will grow. And with it the influence and power of social media will grow. As a corporate communicator, it is essential to understand the Russian way to use social media. Even though it hasn’t grown to its full potential yet. It’s still a young nation – in terms of publicizing and accessing free information.


Locally Sourced: Not Just for Produce

June 18, 2009

Although Russian use of the Internet and social media is high enough to warrant the country’s ranking as the fourth largest social networking market in Europe, Russians are using homegrown versions of social media apps. Sharing varying degrees of similarity with social media tools used in the United States and other countries, the Russian applications have been customized to the local market and feature Russian-language interfaces. Their popularity makes it essential for marketers to have a good understanding of the social media structure and applications available in Russia, and how they are being used. (Hint : Facebook probably won’t cut it, but Odnoklassniki and Vkontakte likely will. Ditto for LiveJournal, chosen by President Dmitry Medvedev as his blogging platform earlier this year.)

As with traditional tools and campaigns, marketers must ensure that they are catering to the local audience on their terms, deftly navigating local social and political waters to gain stakeholders’ trust and deliver the goods and services they need and want. For brands wanting to use social media to reach audiences in the Russian market, the results would well be worth the effort.


LIFE IN RUSSIA IS ALWAYS BETTER THE SECOND TIME AROUND

June 18, 2009

The trends in online communications are rapidly evolving with content streaming to known sites such as Twitter, Facebook and YouTube as a way to grab the public’s attention and quickly connect them to a product or cause.  However, while social media tools are transforming the way organizations such as Kiva interact with the world, there’s a second world that they are also using to reach digital audiences. 

 Second Life is a new trend in the digital world, and it actually allows companies to set up a virtual world where millions of viewers (residents) can enter.  It is not a game, but instead companies can create an in-world avatar to interact with others by buying, selling and trading products with residents.  Kiva uses Second Life through Techsoup Global and Nonprofits Common Projects to stay ahead of digital trends and to provide a unique digital presence to their lenders or entrepreneurs.  The micro-finance organization purchased land, built offices and works with other non-profits in Second life to get users such as Julles Boucher, a self-described philanthropist, to invest in the services of the organization.  Boucher, who is Kiva.org’s Second Life Coordinator, utilizes this social media tool as a way to expand marketing and awareness to users all over the world.  

 For brands similar to Kiva, who would like to reach audiences in Russia, Second Life metrics and statistics from Linden Lab™covering to the end of March 2008, indicate that three of the most active regions by average time spent per active user were, the Russian Federation (123.63 hours), Japan (77.95 hours), and the Netherlands (72.7 hours). Overall, 544,290 users (up from February 2008) spent an average of 56.27 hours each in Second Life during the month of February, up from 53.69 in January 2008.  If companies are considering digital tools beyond the use of a standard web page they should take advantage of how Second Life can communicate with users (residents) in 3D, while promoting their product or cause through multiple languages with real-time text chat translators. 

 The Second Life economy is built on the Linden dollar in which millions of U.S. dollars (at the current exchange rate) change hands each month[i].  As a result, Kiva donations are steadily increasing, and companies can use this virtual tactic to boost production sales as well as raise awareness with 35 to 49 year old online audiences.  According to Linden Lab™, 83.79% of the population is 25 years and older, and the 45+ year old users continue to be the heaviest users on average in Second Life.  

 Kiva continues to motivate users of Second Life, particularly Russian users to participate in their micro-financing services by having the first Life Aid Booth and promoting the organization through Second Life events and virtual guerrilla marketing.  It is always important to know that the most successful companies are likely to be those that can add new innovative tactics to their digital audiences.

 


[i] The New Rules of Marketing & PR, David Meerman Scott


A 21st Century Russian Revolution

June 18, 2009

It is fascinating that President Medvedev has called for international rules for the Internet. Could this be in response to the April 2009 “Twitter Revolution” in Moldova where activists used Twitter, Facebook, YouTube and other social media networks to organize and broadcast the efforts of anti-Communist protesters there in response to parliamentary elections?

 

protests_moldova2_3.jpg

In Chisinau, the ensuing “riot” was Tweeted and then broadcast on televisions around the globe while state-run television aired a soap opera and a dance routine. Moldovan President Vladimir Voronin then accused Romania of inciting a coup attempt and expelled their ambassador and journalists. The social networks allowed protesters and reporters to bypass government blockades, but one of the activists faces criminal charges for helping to organize the flash mob of 200 via Twitter and Facebook.

Certainly these networks can be used to mobilize Russians for a cause they can all agree on and one that results in positive change without jail time.

 


Russia’s Social Media Outlets Provide Training Ground for Grassroots Activism

June 18, 2009

In the article “A glimpse of Russia’s advertising and marketing,” Alexander Repiev explains that because of Russia’s sordid history, the country lacks marketing and advertising sophistication. According to Repiev, professionals do not hail from “ivory-tower marketing academia,” copywriters are hard to find, advertisements are of poor quality, budgets are minimal and messages are simplistic at best.

What does this sound like?untitled2

This combined lack of experience, money and formality should immediately usher in thoughts of grassroots activism.

Therefore, brands ought to take a few lessons from non-profits (who have already been working in this environment for years) and sharpen their grassroots communication skills. Furthermore, it also means that brands are not going to be able to rely on traditional, tried and true communication channels but rather actually build trusted relationships with audiences at local levels like never before.

Enter social media.

Social media and networking sites typify grassroots activities and therefore is the natural environment for brands to implement such efforts to:

  • Energize and engage communities;
  • Provide immediate, real-time feedback and
  • Solicit audience participation such as word of mouth marketing.

Furthermore, the rapidly growing number of social network users allows brands to know exactly where the audience is living, an invaluable bit of information.

While some brands may not see the significance in grassroots efforts, the really smart, creative types will relish the opportunity!


Онлайн продайте в розницу стиль русского терапии! (Online Retail Therapy, Russian Style!

June 18, 2009

Being an enthusiastic consumer of that great Russian creation, vodka, imagine my disappointment at discovering that the Russian economy is not in fact powered by my favorite beverage, just boring old natural gas and oil. According to the twin Bretton Woods institutions, the IMF and World Bank, Russia’s economic growth has consistently outperformed other G8 nations over the last few years because of  oil production and natural gas resources.

When it comes to the Russian consumer however, I was even more surprised to learn that they also indulge in online retail therapy and shop for books, music, gadgets and videos on sites like Ozon.ruozon_logothink Amazon.com.

We’re not just a store: Ozon is a complete Russian entertainment resource. A comprehensive guide to the Russian cultural scene in Moscow, St. Petersburg and elsewhere in Russia.

Launched in 1998, the online store has everything Russian speakers could want in terms of Russian language music, books, and entertainment. The delivery options are attractive and a reflection of the subtle differences between the Russian and US markets. Delivery times range from just 24 hours by courier if you live in Moscow and up to ten weeks by international mail service if you live in the rest of the world (over 60 countries.) One of the subtle differences for shoppers in Moscow, St Petersburg and Israel is that they can pay cash on delivery if they select the courier not postal option. In its guide for ‘shoppers’ mail-order bride Web site womenrussia warns about the limited use of credit cards in Russia, particularly in small towns alongside tips on the best season to visit (summer, June to August) and a suggestion to get a talking translator which conveniently they sell!’

The rest of us can use Visa or Mastercard but Amex cardholders will have to wait a while before they can use their cards to shop on Ozon.

ozon1

In the first half of 2008 Ozon’s revenue grew by 78% to $45 million compared to the same period in 2007.

The best-selling items are books, with 36% of sales, cell phones, cameras and other electronic devices, with 30%, and movies, with 14%.

Businesses wanting to sell electronics, books, movies or music to Russian speakers in over 60 countries would be well-advised to get familiar with www.ozon.ru and other online retailers in Russia for two key reasons:

  1. Future Growth Potential: In 2008 Russia ranked fifth among European nations in terms of monthly Internet visitors (and that was with only 14% of the population online – I’m not a mathematician but the growth potential is glaringly obvious.
  2. Current Growth Rate: In 2008 Russian consumer spend online grew by a whopping 35.4% compared to 2007, to an impressive $4.42 billion – a growth rate that is faster than the US market.
2005 - 2008 Russian e-commerce sales trends

2005 - 2008 Russian e-commerce sales trends

Despite the clear potential for profits in online shopping in Russia, businesses should also be aware that there are some issues that could impact success. For one thing, Russian consumers are not yet as confident about disclosing personal data online and still distrust the banking system.

Secondly, there is a subculture of young Russians, who are frustrated by limited job opportunities and consider online fraud as a lucrative career option. It is not hard to find stories of hackers with interesting names like ‘The Corpse who sells viruses to anyone who can pay $3000. 250 customers of the Swedish  Nordea Bank were swindled out of $1.4 million by hackers using a virus like that sold by ‘The Corpse.’

Overall though, the future of online shopping in Russia looks bright because there is still a large part of the market potential that is untapped and continued growth in Internet and online shopping and credit card uptake among Russian consumers. Read Top 10 Russian consumer trends here.

So,Счастливое Посещение магазина (that’s Happy Shopping to you!)


The Mobile Mafia

June 18, 2009

 

If you’re a hip Russian twenty-something and want to leave your one-room apartment and still continue your conversation, you’re more than likely socially connected with Mobile Instant Messaging (IM). Mobile IM has become an essential feature for many young adults in Russia and Megafon, the third largest mobile phone provider in Russia, plans to become the kingpin in the mobile market through this technology.

Megafon wants to capitalize on this emerging young adult market through their partnership with NeuStar’s Interconnect platform to create its own branded services. Megafon’s competitors offer mobile IM service, but Megafon will have the ability to be interconnected with their competitors.

Currently, mobile advertising isn’t available through Megafon’s IM platform, but there are a vast amount of opportunities that exist. Clearly, marketers will be attracted to the targeted audience which creates the possibility of click-to-call integration and mobile coupon buddy referrals. As more individuals obtain smartphones and the economy improves experts believe Russia will become more consumer focused culture where mobile advertising will have greater potential for marketers.

In the interim, like a wise Mafia organization, Megafon is offering IM for free…”for a period of time,” to get the customer hooked before it is “monetized by a monthly subscription fee.”

I guess the only good thing is they won’t cut off your fingers if you can’t pay, but you may lose a toe.


Russian Off to Market

June 18, 2009

flag_russia

Remember the early ‘90? The Internet was just catching the big wave, AOL was the cyber Buddha and you were first serenaded by the screeching sound of a dial-up modem and the announcement of “you’ve got mail.” Chat rooms were exciting, yet taboo…shhhh. Ahhh. It seems like yesterday. Fast forward to the millennium. Imagine your first introduction to the Internet is through  Twitter, Facebook and Myspace. No, you’re not a pre-teen in America sipping tea or lattes at Starbucks while discussing Miley Cyrus and the Jonas Brothers. You are in Russia, and you know only one version of the Web and that is version 2.0. It’s great to be you. However, if you are a company trying to market your brand or product in Russia…It sucks to be you. Why?

According to Alexander Repiev

  1. Russia is comprised of a melting pot of cultures, so it’s difficult to target an audience.
  2. There is no unified marketing concept.
  3. There is a lack of reliable national statistics on marketing trends.
  4. Official data is widely inaccurate.

Before you go Russian off to market your product or service, here are a few tips.

Sales Paper and Coupons:

Do your Research: With over 33 million Internet users and close to that amount of registered users on Russia’s top two social networking sites, social media is the best place to start. Another place to start is mobile marketing. Though mobile marketing is in its infancy stage in Russia, it  is on the rise and has attracted its own target audience. After you complete your marketing homework 101: researched the various cultures, infrastructure, strategy and completed a forecast for possible political and economic changes, its time to make your list. You’ve searched the sales papers, so now let’s do some shopping!

Odnoklassniki

Odnoklassniki

Shopping List:

  1. Class reunions or school related events: Surprisingly the top social networking site in Russia is Odnoklassniki, a site for classmates. Organize class reunions or similar events and try to implement and promote your product into the event, either through sponsorship, discounts or by merging the event messaging with your brand or service.
  2. Create product or service buzz on VKontakte, which is the number two social media tool in Russia. This site is like Facebook.
  3. Mobile marketing: Possible promotions include instant-win (package code registration), SMS-lotteries and SMS-contests geared toward your product or service.
VKontakte

VKontakte

Recipe for Success:

Remember…Digitality is not Totality: It’s not just about the product!

Clay Shirkey points out that there is no recipe for success when it comes to social media, but recommends three broad rules… “a successful fusion of a plausible promise (the why), an effective tool (the how) and an acceptable bargain (the rules) with the users.”

Happy Shopping!


Can Russian Companies Benefit from Social Media?

June 18, 2009

After reading a laundry list of links about Russian marketing and Russia’s movement in social media, I attempted to find out something surprising about how a Russian brand is using social media. The biggest surprise is that I couldn’t think of any Russian brands off the top of my head. After going deeper into the recesses, I remembered Volga cars, Baltika beer, and of course Stolichnaya and Smirnoff vodka. Upon finding some Russian versions of the Websites (entered the rest in English), I noticed that while the sites themselves are pretty well designed (I especially liked the crisp layout of Baltika), they don’t link to social media at all. Many American companies currently incorporate Web 2.0 applications and links on their sites so that fans can visit them on Facebook or YouTube or read the CEO’s blog.

The material from the reading list gave a lot of details about how social networks and blogs are booming in a big way in Russia. In fact, stats show that Russia is the fourth largest social networking market in Europe. What makes me curious is how much of that fact is attributed to the sheer size of Russia? One of my favorite quotes I saw stated, “Russia is a classical marketing country. Marketingwise, Russia is not a “country”; it is rather a huge sparsely populated landmass to which no unified marketing concept applies.” That makes me wonder whether social media will be able to make an impact in how Russian companies do business. Just because millions of people are on social networks, that doesn’t necessarily mean they’re connecting with companies or learning about the latest, greatest offering from Baltika. (Their Website worked for me. As I type, I really want an ice cold beer.)

Will the tides turn though now that Digital Sky Technologies (DST) invested $200 million in Facebook? DST has shares in numerous internet and technology companies, so can they help implement social media into the traditional Russian marketing model? As stated in a Fortune article “Indeed, Tamas [DST partner] and his team will bring invaluable knowledge about doing business in Russia and Eastern Europe, where companies are testing different types of business models for social networks.” Though Facebook is a huge organization, Russia is full of social networks and the Russian people may not want another player.

So as Russian internet usage grows, the companies are going to have to decide whether to follow a social-media marketing  model to advertise. One person who has taken to social media to market himself is Russian President Dmitry Medvedev. I was very surprised that he had his own LiveJournal blog and is actually keeping it current. Though I have no idea what he’s saying in his videos, he has a pretty solid following based on the amout of comments he receives. Typically, when people see a leadership figure using something, they’ll follow suit. Plus, Medvedev’s use of LiveJournal is giving great exposure to show people how they can reach out to their friends to tell their story. On the other hand, you have to consider that the amount of people who get to view the President’s videos is relatively low (there are approx. 33 million Internet users vs. a population of approx 141 million). Ultimately, Internet saturation will have to be a big consideration for a company to decide if, and how, to engage the Russian populace. Perhaps it might be enough for a company like Baltika to have a page on one of the social media sites. Either way, Russia will have an new, emerging market as Internet usage increases in the area.


Russia-More Than Just Words

June 17, 2009

To understand the nuisances of Russian social media you have to understand the history of Russian culture. While many American brands are jumping on the social media bandwagon as a means to push their marketing efforts and we Americans eat it up like Sunday dinner steak; the same does not apply in Russia. Because of failed marketing efforts in Russia traditional marketing efforts in Russia have lost their clout therefore, as social media begins booming many companies are not able to take advantage of spreading messages through social media mediums. Companies must be creative in breaking through the Russian mold. The Russian community must see that these companies are about more than just pushing a brand for the sake of making a sale. The Russian community wants to see that these companies understand and relate to the culture.

A classmate in a previous post, Russia Gone Viral, has made a very interesting observation. The author of this post has stated that viral messages have a greater impact on how members of Russian social network communities respond to messages. This speaks volumes of how previous international and domestic relationships have impacted how the Russian community responds to brand relationships. It is about more than words. The Russian community needs to see that companies understand Russian culture.


Rules for the Worldwide Web?

June 17, 2009

“The Internet should not be an environment dominated by rules set by one country alone, even the strongest and most advanced country. There should be international rules drawn up through collective effort, and the worldwide web should continue to develop as it has done so far – as a common environment. Only this way can we counter terrorism, xenophobia, and other unlawful activity on the Web.”                    Russian President, Dmitry Medvedev  

 

russia

In terms of internet usage, Russia ranks fifth among European countries, with 17.5 million monthly Internet visitors. Russia is the fourth biggest market in Europe for social networking. Odnoklassniki and VKontakte are Russia’s largest social media web sites. When Russians go online for the first time they appear to be joining and using social networks almost immediately.

From the outside looking in it appears that Russian President Dmitry Medvedev is fearlessly leading Russia into the online world.  After all, he has a video blog and during his reign there have been nearly 33 million new internet users in Russia. However, as the quote above suggests, things are not always as they seem.

If you take a closer look at Russia and its developing world of social media you will find that there are still remnants of its former socialist state. The two most popular Russian social networking sites are in fierce competition and have restrictions in place which prevent users from mentioning the URL of the competitor in communications with other users.

In January 2008, the Duma (Russian Government) considered a bill which proposed the creation of an Internet Technology Center and the creation of an Association of Electronic Communication which would tighten internet controls. In my opinion the Internet has thrived and become a global phenomenon in large part because it has managed to remain unregulated. Each country is entitled to create their own rules, however, if Russia wants to continue to be viewed as the next big social media market.  The internet should remain unregulated for Russians and people all over the world to be able to connect, share and change the world.


Marketing in the Post-Communist ‘Capital of Consumerism” (Hint: Digital ALONE Won’t Cut It)

June 17, 2009

This $1.3T market is worth mentioning, since the Russian ketchup market alone is worth $250 million to $300 million in revenue, and they imported roughly $9B in trade from the US in 2007. At 6.5M sqare miles, Russia is the largest country; but its population is predominantly urban, and sparse, with 73% of its population of 141,903,979 citizens residing in or near Moscow of St. Petersburg. (Wikipedia, 2009) While the Russian internet penetration rate is close to 45%, (Gallop media 2008), broadband penetration is significantly less available compared to America.
It’s also worth mentioning that a recent Twitter blog (http://twitter.com/oscarcarreras) shows that 60% of their traffic is non US; however, the 140 character limit microblogging requires is a huge problem for the Russian alphabet. (And likely the Chinese as well). Likely, you will not drive sales by targeting Twitter.
Same goes for using Google, which lags far behind in search engine optimization in the Russian market. It seems Yandex is your best bet for targeting the online masses there.
According to a blog posted by oskarokupa in December 19th, 2008 in MultilingualPPC, the leading Russian Search engines in 2008 were:
• Yandex. Share has decreased slightly. Audience growing exponentially
• Google.ru
• Mail.ru(using yandex search technology). Steady share. Mail hosting is their main service.
• Rambler. Decreasing as a result of their deal with Google
The Russian Internet advertising market has increased exponentially since 2001with Russian contextual advertising much higher in terms of spend than display ads (which will be accelerated by the current economic crisis). Yandex Direct is contextual ad serving solution that serves ads on Yandex and on websites participating in the Yandex Advertising Network. Advertisers pay only for clickthroughs, which means they pay only for each visit to their website.
According to their corporate blog, Yandex (and English-friendly Yandex Direct) is the 6th largest worldwide search property (after Google, Yahoo!, Baidu, Microsoft, and Naver and ahead of eBay, Time Warner, and Ask), earning $167M in annual revenue in 2007. They channel 1.5B searches per month (50M searches per day) throughout the Russian market, including searches made on partner sites: Mail.ru, Tut.by, Quintura.ru, and Yandex.XML search result-powered sites.
Yandex.Direct contextual ads now reaches more than 10 million Russian users through its partners including Mail.ru, Mamba.ru and Livejournal.com, as well as several web search services of the Russian, Ukrainian and Belorussian Internet Aport.ru, Gogo.ru, Nigma.ru, Km.ru, Ukr.net, Tut.by, All.by, and Quintura.ru. Odnoklassniki.ru is number the 3 site in Russia by monthly reach with 10.4 million users.
Yandex seems to have been able to lure both Russian marketers and Internet users. Although Google keeps growing in Russia, if any company wants to do online business in Russia, or simply raise brand awareness among the countries or Russian confederation, Yandex Direct, Yandex paid service is the tool to use first in order to maximize reach.
However, when you consider the geographic scale of this market (namely Moscow, which contains 70% of Russia’s online users), it becomes apparent that it will require an integrated strategy based on personal relationship building to penetrate this market with any significant returns. Especially to account for the rampant distrust throughout the Russian world.
Last week, Edelman Russia presented this year’s trust findings in Moscow at the International Council for Cooperation and Investment forum.The data quantified the significant level of distrust Russians have for those outside the country, and ranked Russia at the lowest (external) trust score globally, along with China. This distrust extends to online advertising, and according to a 2008 blog article posted on Multilingual PPC , Russians do not (on the whole) speak English, and prefer one-on-one contact.
According to the article, Strategic Marketing in Russia: The Evolutionary Step to Extend Technology Development Centers and Maximise Your Marketing Efforts in Russia by Gary Fowler, There are two critical concepts relevant to US companies entering the Russian market. These two tactics will compress your time to market and increase market penetration and expansion at an aggressive pace:Technology Development Center (TDC), and the second concept is that of Relationship Asset Management (RAM). TDCs reduce your risk of introducing new products and services in the Russian market by leveraging local relationships and understanding of local culture, and expediting the distribution process by allowing you to outsource your technology development and infrastructure. RAM is a relatively new concept that is rapidly becoming a significant determinant of success for U.S. companies entering the Russian market, by leveraging the power of existing relationships enterprise-wide to provide the management infrastructure needed in the Russian market.
But you need only leave the Moscow region to see a very different country: no running water, and no central heating a land of villages which people of working age have largely left in search of a better life. (BBC, 2008)
According to ManagementParadise.com’s “Contemporary marketing practices in Russia” post, “Contemporary Russian marketing practices cover only a narrow spectrum of the diversity of marketing practices observed in other nations, and the overall intensity of marketing activities is low in comparison with international benchmarks. Overall, the relevance of the traditional transactional marketing concept holds for current practices and market conditions in Russia. Relational activities are considered as merely additional rather than as alternative options of developing organisations’ marketing. Practitioners can adjust their marketing to the patterns of profitable activities revealed by this investigation. In particular, the new possibilities arising from IT-based marketing are found to be not utilised by vendors who are already established in Russian markets. “


Russia has gone viral

June 17, 2009

In a recent wired.com article titled “Kremlin 2.0 Russian Prez Discovers Social Media” evidence of social media adoptions has shown itself through that of Russian President Dmitry Medvedev and his online blog. Medvedev is intrigued by the attention his blog has gained, and more impressed with the online discussions his blog enables about various current issues.

Russia is one of the fastest growing Internet markets in the world with social media networks making a gaining huge popularity. Currently, the social media landscape is dominated by social networking sites – two of the largest Russian social networks, Odnoklassniki.ru and Vkontakte.ru are common social networking sitesocial-networks-russia-graphs that rival with U.S. based Myspace, Facebook and Twitter. Google, too, has become an online media staple in Russia.

The most interesting aspect of these social sites is that they enable Russian and other global companies – including the U.S. – to engage in outreach and communication using popular sites that reach millions of people.

Despite the growing amount of traffic, and growing popularity, companies will need to learn how to best utilize social networking sites as a receptive and responsive outreach tool to position brands, create consumer advocacy, and in turn create consumer brand loyalty.

Social media marketing should be used to attract, retain and increase the value of current and future customers and stakeholders.  Harnessing the power of social media marketing to encourage customer advocacy will become a staple in all markets, especially Russia where internet and social marketing can be more effective with increased consumer usage of these networks.

Launching on-line viral campaigns, and forming and participating in niche on-line communities can spur customer advocacy and word-of-mouth which will result in increased brand awareness and loyalty. The various approaches to adopting social media marketing will also enable companies to glean valuable customer insights from consumer-generated content which can help measure progress of social media campaigns and help project and forecast efforts to develop future social media marketing campaigns.


Text Russia, With Love

June 17, 2009

mobile-browsers-limiting-mobile-search

One key insight that I found to be the most surprising from the readings on Russia was that although Russia’s Internet population is being cited as the  fastest growing in the world (after China), it is actually Russia’s volume of mobile subscribers which seems to be accelerating at a rate which far exceeds that of  country’s Internet subscribers/users.  The Internet does not seem to grasp the attention of the majority quite as profoundly as the mobile trend has.    One of the readings offers that the reason for this is due largely to the fact that Russia’s Internet is not up to par because it is “still dominated by designers and programmers”.

With this fact being duly noted,  I am led to believe that brands who wish to use social media to reach audiences in the Russian market will be required to come up with innovative tactics which can be applied to mobile marketing campaigns (SMS Text message campaigns) in order to reach the widest target audience and effectively promote about their products and services.


Play by the Rules to Build Your Brand in Russia

June 17, 2009

The meteoric rise of social media in Russia has evolved in spite of a state-controlled media and growing restrictions on Web-based news outlets.  While it appears that the Russian government has acknowledged the role social media plays in the global community, Russian President Dmitry Medvedev continues to call for greater regulation of the Internet, as evidenced by his recent LiveJournal blog post:

“The Internet should not be an environment dominated by rules set by one country alone, even the strongest and most advanced country. There should be international rules drawn up through collective effort, and the worldwide web should continue to develop as it has done so far – as a common environment. Only this way can we counter terrorism, xenophobia, and other unlawful activity on the Web.”

Russian President Dmitry MedvedevMedvedev’s statement subtly positions his administration against the idea of a common environment of shared ideas; drawing up “international rules” to moderate the Internet would, in the end, quash its intended purpose.

Alexander Torshin, the vice-speaker of Russia’s Federation Council in 2008, went a step further by claiming that the Internet is “a means of terror propaganda that can be considered the academy of terrorism.”

Government critics believe the censorship debate began with Medvedev’s predecessor, Vladimir Putin.  In 2008, the Russian Duma passed a law blocking any Web site deemed to “have hosted extremist material.”  News outlets cited an anonymous government source who said that the legislation was related to an article published in the Moskovsky Korrespondent — the newspaper claimed Putin had divorced his wife in order to marry a woman nearly half his age.

The  Moskovsky Korrespondent has since closed for “financial reasons.”

The Centre of Journalism in Extreme Situations has also reported cases where blogs and news Web sites belonging to government opposition groups have shuttered after having been labeled “extremist.”

Government leaders’ perceptions of the Internet and social media in particular have tremendous implications for brands wanting to use these channels to reach audiences in the Russian market.  Corporate blog posts must maintain a culturally sensitive tone and bloggers must be careful not to question the government’s authority in a manner that might be considered controversial.  Those responsible for monitoring blog comments or moderating discussion boards must vigilantly edit posts that may be deemed “extremist” by government censors.

Ultimately, corporations’ social media initiatives must remain product-focused and politically and socially neutral.  Violations of these unique principles could potentially jeopardize a corporation’s ability to cultivate a brand and expand market share within Russia.


Question Of The Week: Russia

June 16, 2009

Every week the members of the class will answer a new question on this blog. Starting today, we’ll focus on a different region of the world for each week throughout the rest of the class.  Here is this week’s question:

Russia is cited in most reports as one of the fastest growing Internet markets in the world. Mobile penetration is high and generally there are many signs of progress and promise in the Russian market.

From your reading and research on Russia, highlight one key insight or finding you found unique and interesting and discuss what implications it has for brands wanting to use social media to reach an audience in the Russian market to promote their products or services.


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