Russia and Ukraine digital media classifieds

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Growing Online Revenue: Advertising, Sales and Classifieds Moscow, Russia 27 – 28 September 2012
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Discussion of online classified markets with particular relevance to Russian and Ukrainian online markets

Transcript of Russia and Ukraine digital media classifieds

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Growing Online Revenue: Advertising, Sales and Classifieds

Moscow, Russia27 28 September 2012

*TopicPresenter

Online Advertising Market OverviewRoss

Sales Teams: Organization & MotivationRoss

Advertising NetworksRoss

Online Classifieds: Local OpportunitiesRoss

Social Media: Building Audience & RevenueKevin

Agenda

*Online ClassifiedsA cautionary tale : Now you see themnow you dont!

*Online ClassifiedsMany different types of online classifieds businesses exist. The Big ThreeRecruitment - JobsReal Estate/RentalsAuto

*Online ClassifiedsBut online classifieds also encompasses directory products, free classified services, and calendars.Free ClassifiedsCalendars

*Online ClassifiedsAnd there are dozens of other specialty sites - a few examples.Dating/MatrimonialsEducation/Course ListingsAnd many more, often very successful specialty sites motorcycles, surfing, biking, wedding services, pets,...

*Online ClassifiedsOnline classified advertising in Russia and Ukraine is in the early years of development, but still represents a potentially large market.Estimated Online Classified Market(millions)Source: Company reports, 2011; eMarketer, AvendusClassified Advertising OverviewOnline revenue is often from print revenue

Fundamentally changes the nature of print classifieds

Requires data to manage the 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

*Online ClassifiedsThe online classified market in Russia and Ukraine has attracted many large international competitors.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,

Alexa RankSiteCategoryCorporate OwnershipAlexa RankSiteCategoryCorporate Ownership#18Avito.ruFree ClassifiedsPrivately Held - Accel Partners (US)#30Slando.uaFree ClassifiedsAllegro Group/Naspers (S. Africa)#27Auto.ruAutoPrivately Held#59Work.uaRecruitmentPrivately Held#28Slando.ruFree ClassifiedsAllegro Group/Naspers (South Africa)#88Rabota.uaRecruitmentGrupa Pracuj (Poland)#45Drom.ruAutoFarPost Group (Vladivostok)#119Freelance.ruRecruitmentPrivately Held#50HH.ruRecruitmentMail.ru (Naspers 29%)#164Avtobazar.ruAutoPrivately Held#62TIU.ruDirectory Allegro Group/Naspers (South Africa)#187OLX.com.uaFree ClassifiedsNaspers (South Africa)#92IRR.RUFree ClassifiedsTrader East Media/Hurriyet (Turkey)#192Infocar.uaAutoPrivately Held#150OLX.ruFree ClassifiedsNaspers (South Africa)#195AutoUA.netAutoPrivately Held#218Rabota.ruRecruitmentRDWmedia.ru#308Jobs.uaRecruitmentPrivately Held#241Molotok.ruFree ClassifiedsAllegro Group/Naspers (South Africa)#434AutoPortal.uaAutoPrivately Held#304Autonews.ruAutoRBC Holdings/Handelsblatt (Germany)#476Domik.netReal Estate Privately Held#338AutoRambler.ruAutoRambler Group#351Job.ruRecruitmentTrader East Media/Hurriyet (Turkey)#401FarPost.ruFree ClassifiedsFarPost Group (Vladivostok)

*Online ClassifiedsWhat 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.

*Online Classifieds - StrategyDepending on the type of classifieds and your companys 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.

*Online Classifieds - StrategyGo It Alone strategy requires technology, sales and marketing strengths.Go It Alone OverviewBuild, 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

*Online Classifieds - StrategyBuild A Network OverviewPartner 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 networkBuild a Network builds on a group of similar like minded media sites to seize a larger part of the online audience for classifieds.

*Online Classifieds - StrategyPartner with National Site OverviewPartner 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.Partner with National Site strategy recognizes that national sites have strong technology and local media have strong local sales and marketing.

*Online Classifieds - StrategyTraffic Sponsorship OverviewSell 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.Traffic Sponsorship leaves all sales, marketing and technology to the larger national competitors.

*Online Classifieds Business OperationsAfter 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.

*Online Classifieds Business OperationsAudience 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 BBSs where you can cross post important ads to generate trial.

*Online Classifieds Business OperationsIncreasingly 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

*Online Classifieds Business OperationsPricing 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.

*Online Classifieds The FutureClassifieds 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.

*Online Classifieds The FutureMobile classified platforms have boomed in India and Africa.Roopit.comSMS classifiedsBased in BangaloreFree to list or searchAlso Verse Technologies

Google Trader (goo.gl/trader)Launched in Africa and ThailandAllows for free listingsDesigned for activity on mobile phones

*Online Classifieds The FutureClassifieds on Social Platforms like Facebook and Twitter have moved classifieds to a more secure personal platform.FaceBook/Oodle.comOodle built app inside FaceBookProvides some security, friend or friends of friendsRapidly building audience

CLDmkt.comBuilt as an application on TwitterSimple listing creationAccess listings online, on Twitter, on mobile

*Online Classifieds The FutureClassified sites are also undergoing a rapid conversion to e-commerce sites with the development of simple mobile payments.SquareBrings credit card transactions to individualsSimple sign-up and serviceProcessing US $ 8 billion in 2011

M-Pesa/SafariComSMS enabled banking system17 mm ises in Kenya/10 mm in TanzaniaCreates bank accounts for people with bank servicesProvides for simple person to person transfers

*Online Classifieds - SummaryThe 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.

*Remember to appeal for questions and suggestions to improve the presentation**********************