Targeting and retargeting have been used by marketers from the USA and Western Europe for more than 10 years. Although these technologies only started to be used Russia about two years ago, they quickly gained popularity.
Russia’s e-commerce growth rate is one of the highest in the world, but customer acquisition and loyalty remain costly and difficult challenges. As such, online retailers and other businesses are permanently looking for new marketing approaches, and those proven in the West have all their chances in Russia.
Re-targeting, having landed on Russia’s shores a mere 18 months ago, is one of these. Virtually all representatives of large and medium e-commerce companies in Russia tell us they have already used this approach, or are planning to do so in the nearest future.
How does it work?
Nielsen’s findings have shown that people spend only 5% of their time using search engines and 95% consuming content on different websites. Not only SEO and SEM matter! This is one of the main reasons for putting money and effort into online advertising. Reaching an audience online seems like a good idea, so what if online campaigns could be more precise and personalized?
The process of showing ads based on user behavior on the Internet is called behavior targeting. The practice of serving up ads to users who have previously visited a website is called retargeting.
Amazon pioneered the trend more than a decade ago by creating powerful data-mining engines to track consumers across its huge network and website. Targeting and retargeting have been used to up-sell and cross-sell products, reduce cart abandonment, and target display ads.
Then companies like Kayak and Zappos started analyzing individual browsing habits from site visitors and via ad networks, so that they could reach their prospects and clients wherever they went online. Focusing on customer service by analyzing users’ behavior and showing more relevant goods and ads helped Zappos reach new heights. At the end of 2004, Zappos nearly doubled its revenues to $184 million (up from $70 million in 2003).
The next step was the appearance of companies specializing in those technologies and showing ads over the whole Internet. Today there are various targeting and retargeting providers in the USA and Western Europe, including market leaders AdRoll, Criteo, Mythings, Sociomantic and ValueClick. Targeting and retargeting now play an essential role in all advertising campaigns in Europe and the States nowadays.
Google launched its retargeting technology – called “remarketing” – in 2010. The idea is similar to those mentioned above but with Google Content Network the possibility of reaching audience is much higher.
Big ROI, big challenges
Sophisticated technologies are behind high click-through-rates (CTR) and conversion rates. The challenge of collecting a massive amount of information implies good data management, data quality, data mining, etc.
All data must comply with international requirements: depersonalized, accurately stored, protected, etc. From the moment data is collected, it starts to decay and lose value as users change their behavior, clean their cache, and buy new computers, so the process of gathering and analyzing information has to be constant and efficient. This data should be applied and understood correctly to reach exact audience segments on the Internet. Even a small increase in CTRs can be significant for an online retailer.
Retargeting in Russia
Yandex – the biggest search engine in Russia – launched its retargeting in the spring of 2013, which is of considerable interest in terms of technology and market potential.
However, retargeting service offers appeared in Russian significantly earlier, providing an already competitive picture to date. Among players of various sizes are Criteo, eTargeting, Kavanga, Mythings, Sociomantic, and Soloway.
E-commerce is probably the main consumer of retargeting, not only in Russia but all over the world. As this sector is growing extremely quickly, players fight fiercely for their client’s attention – and, in most cases, this happens online.
However, retargeting is mainly for big and mid-sized players. Russia has more than 30,000 online retailers, with the better part of them unlikely to use such sophisticated methods.
The KupiVIP case
Launched almost five years ago, KupiVIP is the leading online shopping club in Russia. KupiVIP started as a flash-sales site selling numerous fashion items at a discounted price. It has expanded over the years and now is aimed at middle class fashion-savvy Russians.
KupiVIP uses many paid techniques to communicate with the audience, from personalized emailings, to SEO, to contextual advertising. Among these instruments, retargeting is significant. KupiVIP considers it optimal to work with several retargeting providers, as every company has its particular technologies and its own network of publishers.
“When you launch your display campaigns aimed at reaching just 25-30 years-old women compared to people who have already visited your website the results are dramatic. In this case you interact with the audience who know your brand so that the conversion rate is higher,” said Oleg Naumov, former Head of Online Marketing at KupiVIP.
Since the goods on the website change constantly, retargeting is dynamic. For example, what a person saw yesterday can be sold out today. As a result, KupiVIP prefers to show its advertising messages in banners rather than exact goods.
Vladimir Belugin is Marketing Manager at eTargeting. He received a finance degree in 2011 from the Financial University under the Government of the Russian Federation and a degree in digital marketing from the Institute of Direct Marketing (UK) in 2013. He has more than five years’ experience in marketing and PR in the area of IT Services and Internet Technologies.
- RUSSIAN E-COMMERCE AND E-MARKETING REPORT – This contribution is an excerpt from EWDN’s in-depth research on Russian e-commerce and related marketing strategy. This 320-page report has been compiled with the participation of more than 100 market players and service providers, in partnership with leading universities and consultancies. To receive free insights or to order the full version (2013 edition), please contact us at [email protected].
