Thursday, June 02, 2005

Yandex: PPC and Online Advertising in Russia

Russian search engine - Yandex - launches PPC service

Russia is one of those rare areas in the world where Google does not rein supreme. According to Liveinternet, the popular public statistics site, Yandex.ru holds a leading market share of 55-60% with Google trailing at 5-6%. Their own published figures show a similar story. While the engine resembles Yahoo! in their portal services, their strong reliance on algorithms has drawn many comparisons to Google.

Diana Moldavsky, Senior Account Manager at Yandex, explains "Yandex is aimed at all Russian-speaking users, both in Russia and abroad. We welcome businesses from all over the world who would like to target a Russian speaking audience."

This is an important point often overlooked when marketing internationally; using a specific language search engine can open a channel to those speakers in all countries, including your own. There are 275 million Russian speakers in the world, an estimated ¼ million in the US alone, making it the fifth most spoken language.

Diana outlined the official Yandex submission policy, "Our robot is always looking for new sites that fit our criteria. So a webmaster can just wait for the robot to get to his/her site or to speed it up he can add the site himself by going to our submission page at http://webmaster.yandex.ru/. We want submissions from abroad only if the site has Russian language pages or English language but Russia related pages."

Yandex now welcomes PPC advertisers from outside the country through their Yandex Direct system. The system is similar to the current offerings from Google and Yahoo!, showing adverts to the right of the main listings and bid for in the same way. The system works by matching exact keywords, whilst considering Russian language morphology, rather than a broad matching system.

The click through rate for pay per click is similar to the organic listings, says Diana, "We have found that, depending on the search query, the CTR for the PPC ads compares favourably with the organic CTR. In the worst case it may be approximately half that for the organic listing."

On the rather hot topic of click fraud which has caused a headache for the other major PPC providers, she was understandably more reserved, "We do monitor clicking patterns for each ad and in case of suspicious clicks we do not charge advertisers for them. Clicking patterns are analyzed with our proprietary software."

That system seems to be working well, as Denis Lebedev, director of Ivdesign.ru explains, "One trick at the moment seems to be to copy our advert link and place it on a popular website, each time the page loads we get a click. We can see this in our referral logs. Yandex has not charged us when this has happened."

This trust is encouraged by the zero tolerance policy that Yandex has towards those trying to abuse the system. They actively encourage spam and abuse reports from their users through online reporting. Explains Denis, "The reporting process is very effective; sites are removed from the index within 5 days."

Yandex do not go as far as to provide IP data on the clicks advertisers receive although they acknowledge that this maybe something they do in the future. Another point being considered is extending Yandex Direct to give a contextual advert program for websites, similar to Google Adsense.

As a market leader, these moves by Yandex are helping to push online advertising in Russia to a new level. As was the case in the UK and US, online advertising so far has been largely limited to banners. Diana explains, "Our evaluation of search adverting in 2004 was $17-18m (compared to $25m for banner advertising). In 2005 we expect search engine advertising to overtake banners."

There is a high growth potential in the Russian market. The most recent research by the Public Opinion Foundation (FOM) shows that the Internet audience in Russia at the start of 2005 is still only 16% of the population (17.6 million people). Over the year that is a growth of 20% with daily audiences increasing by almost 50%. To place this in context, Russia has more internet users than Spain (16m), Australia (11m) or Sweden (5m) while having one of the lowest users to population ratios in the world.

Number of Internet Users in the following countries, in millions - taken from the FOM Report 'The Internet in Russia - available online


internet usage worldwide

Although Yandex has a strict policy on spam they do have a healthy relationship with local SEO/SEM professionals - much more complementary than antagonistic in this growing market. Diana stresses, "We are for SEO when they consult site owners and make sites more visible for search engines. I'd also like to mention that a lot of SEO professionals are reasonable advertisers and are happy to use Yandex Direct."