Russia has been struggling economically as a consequence of a number of sanctions imposed due to its ‘uncompromising stance’ towards geopolitical issues.

As a result, a number of ecommerce businesses that have been heavily investing into the Russian region for some time now, feel under pressure and fear that they will have to significantly cut or completely halt activity in Russia.

While several international ecommerce businesses have suffered heavily from this decline in the Russian economy, there are still ways of reaching the Russian market effectively.

One method of tackling the economic challenge for those in retail has been to focus on cheaper product categories and lower price offerings. For those in the travel industry, the focus has largely shifted to domestic destinations instead of international.

Social media in Russia

Another approach is to identify and capitalise on alternative marketing opportunities such as social media, which despite the dire economic climate has actually experienced growth.

Investment into social marketing in Russia has doubled over the last two years and even now investment keeps growing, driven by the fact that Russians are spending up to 30% more time using it since the decline in the economy started.

In addition, costs for biddable social have decreased drastically for international advertisers following the decline in value of the rouble.

The drop in CPCs (cost per clicks) in particular on Russian social platforms has been more aggressive than in search due to lower competition on new biddable ad products that have more beneficial pricing models.

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As Russia’s largest social platform, VK in particular warrants a more in-depth discussion. VK has more than 280m registered accounts and 66m unique visitors each day.

For a long time VK has been seen purely as a marketing platform to boost brand awareness. Over the last two years, however, it is increasingly being recognised (especially in the retail and travel industries) as a revenue driving channel that is outperforming traditional marketing channels such as search and display in terms of reach and ROI.

VK has been demonstrating particularly strong returns in the fashion industry, with positive trends across organic and biddable activities taking an equal split of revenue share.


The travel industry

In the travel industry, the picture looks slightly different since the purchase path is considerably longer than in retail, involving more research and consideration.

Direct response biddable campaigns have therefore been less efficient, whereas organic social campaigns have seen more engagement and consequently, contributed a positive impact to assisted revenue.

Since the fourth quarter of 2014 when the economy started to decline, we have seen a drop in traffic and revenue from direct response biddable campaigns across all industry verticals.

This has however been offset by the growth in the referral traffic and revenue from organic activities.

Organic social activity

Investment in organic activities in particular, such as competitions and discussion boards across both of the large domestic platforms (VK and Odnoklassniki) has been resulting in a huge number of responses.

It helps to keep the existing customer base engaged and interested, while also winning over new customers that can then be more easily targeted with consequent campaigns.

Having a well-optimised organic profile with relevant and up-to-date content guarantees that existing fans remain satisfied, while investment in fan acquisition results in incremental revenue increases over time.

Another thing to note is that by maintaining a high-quality and engaging profile, customer loyalty towards the brand strengthens and results in a higher lifetime value for the business. Life-time value can also be spurred by investing into the relatively new area of mobile app biddable promotion.

App promotion

VK’s app promotion biddable campaigns are another example of a channel that is actually seeing continued growth during the economic downfall.

So far, the cost for biddable promotions has been relatively low at GBP0.08 per download and the CTR is about five times higher than direct response social biddable campaigns.

Reasons behind the high CTRs can be explained through the relative convenience and ease of using an app to explore a brand and its products, while there is no direct pressure on the customer to make an immediate purchase.

In summary

International advertisers should not automatically pause all of their activities in Russia as a consequence of the current economic situation.

Instead, the emphasis should shift to maintaining their existing customer base and minimising the costs of acquiring new, loyal customers by utilizing the large range of opportunities that Russian social platforms have to offer.

Across the accounts we work on, Russian social has consistently proven to be an efficient, revenue-driving channel even during these difficult economic times.