Bernard Lukey: We are Europe's largest Internet company working in Europe's lagest market
I 1 October 2012

Bernard Lukey: We are Europe's largest Internet company working in Europe's lagest market

What were Yandex' aims when opening the European office, and which of them were achieved?

The number of Yandex’ clients in Europe is increasing, but not all of them have a representation in Russia. There is a huge interest to our products, such as contextual and banner advertising tools, and even for Yandex. Market, an interest from people who do not speak Russian, but who are interested in Russian customers. Russia now has more Internet users than any other country in Europe, and it may soon even have more Internet shoppers than any European country, too. Everybody is getting ready for this, and European companies want to work with local players, with Yandex, above all.
That is why our first aim was to set up an international team, a group of professionals who would know how to talk to European advertisers, help them manage their ad campaigns. Imagine you are an owner of a small hotel in Germany and you would like to have tourists from Russia coming there. But how can you let them know, how would you help them find you? In the past, you’d have to contact the Yandex office in Moscow, sign a contract with Yandex in Russia, transfer an advance payment, etc. All in all, it was a complicated and tedious process for a small European company. Having an international team allows us to be closer to the advertisers, it makes signing contracts much easier, helps them work with our advertising tools. Of course, at some point, they might start working with the Russian Yandex office directly, but our international clients are also interested in our work in other countries, especially in Turkey. As of today, we have set up a company, team and expertise, everything necessary for successful work. And we are, of course, actively searching for new clients: not everyone is yet aware that when you want to promote your product in Russia, you can use Yandex. We need to tell them that.

Do you have to explain to advertisers what Yandex is?

We do sometimes, of course, but my impression is that we are better known in Europe than in the US, although our stock is NASDAQ-traded. Europe has more connections with Russia, more people have heard of us here. Yandex representatives often take part in European business conferences and exhibitions, we organize workshops for digital agencies. Even larger agencies, who have their own offices in Russia are interested to know more of us. And for smaller, regional digital agencies, who would work with customers like that German hotel, our support is crucial, because they don’t have the resources to work with Russia. Some projects, such as Yandex’ collaboration with CERN, also help raise brand awareness. And of course, when we opened our European office in March, many major European newspapers wrote about it. But when we are asked to explain in short what Yandex is, we usually say it’s Europe’s largest Internet company working in Europe’s largest Internet market.

What types of European advertisers is Yandex interested in most?

Firstly, the luxury segment — Swiss, German, French, British brands who want to cater to Russian customers, among others. Watches, jewelry, designer clothes… Russians are second only to the Chinese in terms of luxury shopping today. Once we even provided to the Swiss social marketing agency with stats on queries about luxury goods — they were researching Russians luxury brands preferences. Real estate is another important category. There’s a great interest to real estate abroad among Russians. Then there are hotels, travel industry, entertainment, education — here German, British and French companies are joined by those in Italy and Spain.

Not all businesses in Russia really understand what Internet advertising is. How about Europe?

Of course, a lot more people in Europe know what Internet advertising is about. But we still have to explain what tools we have and what the difference is between us and other players, what is so special about Yandex’ RTB, how we target ads depending on TV viewers preferences (that’s our joint project with Vivaki). Our latest seminar at DMEXCO conference in Germany on Yandex' ad technology had many more participants than the venue had room for, so there is a great deal of interest on the part of industry professionals. Certainly, larger companies have offices in Russia, they know Yandex quite well and know how to advertise on Yandex. When it comes to medium and smaller companies, even if they are aware that Yandex is the best advertising option in Russia there is, they do not know how it works, in detail. These companies are the ones we work with, and we shall continue to explain Yandex' advantages to them.

Have you had any trouble with service and tools localization? Do cultural differences matter for business?

Generally, the tools used by major contextual operators, the Internet marketer’s workspace, is not really different. People who are generally familiar with contextual advertising services can work with our English interface easily. However, we take the issue of improving the interface seriously, we want our tools to be better that those offered by our competitors. We are not planning to translate into other languages yet, as almost everybody knows English. Our European advertisers' most serious problem is selecting the right keywords, but we assist them with that.

Have you thought of some unique product to offer the European market?

We rather have to explain about the unique products that Yandex already has. Take Yandex. Market, for instance: there are similar projects in Europe, but all of them are far behind in terms of both scale and technology. When a shop owner comes to us, we explain that they may want not only to buy contextual ads, but to translate descriptions of their goods for Market.

What do Europeans know about the Runet? Do you have to dispel a wrong image?

Of course, we need to tell people what Russia is today, they are always afraid of investing into something they don't understand. We work closely with independent market researchers, we spread information so that potential advertisers could hear about us not only from ourselves, but also from independent sources well-known to them, from trusted analysts. When IAB, for instance, tells them how many Internet users there are in Russia, how the Runet is evolving, what it market share is, etc., then they are ready to work with us. And surely, when we tell them that Yandex is a public, NASDAQ-traded company, their eyes open. Almost everywhere in Europe, there's practically only one search service, and people are used to it. Europeans are really intrigued when they learn that it is different in Russia, they become really interested. The level of our clients' awareness differs a lot: some still think Russia is a minor market that you can enter with a small budget, while some understand the market's prospects quite well and try to secure themselves a place there. 

Your current European clients are companies that advertise in Russia. Do you have plans to create a European ad network as well?

Everybody keeps asking: "when are you coming to our country?". Our usual reply is: let's get to know each other, so we can tell you about our work in the CIS countries and in Turkey, and you will be the first to know if we plan anything next. There is something intriguing to it, something raising expectations, especially when Europe is so tired of only one search engine's hegemony. We see working with serious, major European advertisers as very useful for us, because it is a great stimulus for further development. 

What are your immediate plans for Europe?

We will continue building close relationships with key market players and entities. We want everyone in Europe to know about Russian market and its characteristics, to know that our team is there to help them in Russia. And, of course, we are going to build up the team, although we do not yet need new offices in Paris or Munich, we travel a lot.