russian internet market and yandex overview iss london.18 may 2011

Yet Another Index?

May 2011ISS London

• Intro to Russian Internet Market

• Yandex 101

• How do you get started?

May 2011ISS London

0

150

300

450

600

750

Asia Europe North America Latin America Middle East & Africa

8190

191

325

477

4570

184

271

390

Internet User Growth - Global

Source: ComScore

Internet User Growth

Russian Internet Market

Growth is driven by Russia in Europe and China in Asia

Millions of Internet Users

3

20082009

+22%

+20%

+4%

+28% +79%

0

125

250

375

500

China US Japan India Brazil Germany Russia UK France Nigeria S. Korea

394445516065768199

239

420

Internet Users - Global

Sources: Internetworldstats (2010)

Internet Users (MM) per Country


Russia has the 7th largest audience of Internet Users in the world; 2nd largest in Europe

Millions of Internet Users

4

Internet Penetration - GlobalRussian Internet Market

Sources: Internetworldstats (2010)

0%

25%

50%

75%

100%

China US Japan India Brazil Germany Russia UK France Nigeria S. Korea

81%

29%

69%

83%

43%

79%

38%

7%

78%77%

31%% of Population

Internet Penetration per Country

Russia currently has fairly low penetration compared to other large Internet populations

5

Russian Internet Penetration GrowthRussian Internet Market

Source: International Telecommunications Union

0%

25%

50%

75%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Internet Penetration in Russia (2000-2010)

Russian market is growing extremely quickly because of penetration growth

6

43%

2%

37%

27%

21%

19%15%

4% 7% 10%12%

% of Population

18-24 25-34 35-44 45-54Age 55+

7

Russian Internet users by Age RangeMoscow & St Pete Internet penetration resembles major western cities

Total Population Internet Users


Moscow

Russia

Note: December 2010

Top Internet Sites in RussiaMost major sites are local

Source: ComScore (December 2010)


8

Site Total Unique Visitors (000) % Reach

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

Source: LiveInternet.ru

Search Engine Traffic Market Share in Russia, January 2011

Search Engine Industry in Russia

Yandex65%

Rambler2%

Google22%

Other4%

Mail.ru7%


9

Mar

-05

Sept

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Source: LiveInternet.ru. Based on monthly search traffic to Russian websites from Russian IP addresses

Market Share Evolution

2%

7%

22%

58%

26%

5

2001Google launches Russian language search engine

March 2006Google opens office in Russia

2006Google introduces Russian language morphology-based search capabilities

June 2008Google launches outdoor

advertising campaign


May 2008Updated core search and ranking algorithms

65%

5

Nov 2009MatrixNet

Russian Search Traffic Market Share

10

July 2010Orange (Realtime Search)

Dec 2010Spectrum (Semantic Upgrade)

Social Networking in RussiaLocal players dominate social media; but Facebook and Twitter doubled in reach in 2010

SiteSiteTotal Unique

Visitors (000)

% Reach

1 Facebook 662,420 50%

2 Windows Live Profile 131,206 10%

3 Twitter 104,995 8%

4 MySpace 79,474 6%

5 LinkedIn 65,775 4%

6 Orkut 52,755 4%

7 Vktontakte 50,517 4%

8 Odnoklassniki 43,241 3%

9 Yahoo! Puls 39,709 3%

Global

SiteSiteTotal Unique

Visitors (000)

% Reach

1 VKONTAKTE.RU 32,992 72%

2 Odnoklassniki 27,134 59%

3 Mail.Ru - My World 16,458 36%

4 FACEBOOK.COM 8,668 19%

5 FOTOSTRANA.RU 5,216 11%

6 TWITTER.COM 2,660 6%

7 PRIVET.RU 1,848 4%

8 VKRUGUDRUZEI.RU 1,055 2%

9 MOIKRUG.RU 1,000 2%

Russia

Source: ComScore (December 2010)


11

Russian Digital Advertising MarketRussian Internet Market

0%

5%

10%

15%

2004 2005 2006 2007 2008 2009 2010 2011 (f) 2012 (f)

1% 2%3%

5%6%

9%11%

12%13%

Digital Ad Market as a % of Total Advertising Market

Sources: All data other than for online text-based advertising for 2004 - 2006 based on ruble-denominated data from the Association of Communication Agencies of Russia (AKAR). Data on online text-based advertising for 2004 – 2006 are provided by AIB, and include both text-based advertising and a small portion of contextually targeted display advertising. 2010-2012 data from Kommersant. All data are reported inclusive of VAT 12

$0

$300

$600

$900

$1,200

$1,500

2004 2005 2006 2007 2008 2009 2010 2011 (f) 2012 (f)

$0$0

$817

$599$708

$497

$237$107$56

$0$0

$517$356

$410

$274

$130$47$21 $0

$300$243$298$223$107$60$35

Digital Advertising Market ($MM)

Display

Text-based

$1,067

$1,333

Market grew ~60% Y/Y in Q1 2011

13

Text Ad Revenues in RussiaYandex owns ~80% of the Russian text ad market when measured by revenues

Sources: Market report from Q1 2011; data from iContext

v More than 78,000 advertisers

vMore than 4,300,000 active ads

vMore than 29,000,000 active keywords


Google

Yandex

Begun


• Yandex 101


14

Sources:1. Analysys International 2. KoreanClick3. LiveInternet.ru

To Win in Certain Markets, Local Knowledge is KeyYandex 101

Proprietary Search Technology

Japan

China South KoreaSearch market share 1:• Baidu – 73%• Google – 25%

Search market share 2:• Naver – 75%• Google – 3%

Search market share 3:• Yandex – 65%• Google – 22%

Taiwan+

Czech Republic

15

Yandex at a GlanceYandex 101

The largest Internet company in Russia

v65% market share in search

vOver 54 million users per month

vOver 20 years of development

Russia’s #1search engine

vLocal market dominance

vBreadth and reach for all demographics

vMachine learning based organic engine

Differentiation

vLocal search / Location based services

vGlobal expansion

vIPO on NASDAQ

2011 Initiatives

Sources: LiveInternet.ru; ComScore

Track record in monetization and profitability

vFY 2010 gross revenue - $430M (~85% from text ads)

vUp 43% over 2009 y/y

v40%+ EBITDA margin

16

Yandex - Russia’s Search and Information Retrieval PortalYandex 101

The largest and highest rated Internet offerings in Russia

17

News #1-3

Traffic jams/maps #1

Mail #2

Weather #1

Market #1

Money #1

Photo Sharing #3

Blog search #1

18

Yandex.DirectPaid search ads ranked by cost per click, CTR, and relevance

Yandex.DirectHighest ranking ads

Organicsearch results

Produced by Yandex search algorithms

Yandex.MarketRelevant offers from Yandex comparison shopping system

BannerContextual graphical ads

Text Ads on Yandex’s Owned & Operated WebsitesAccess to the large user base of Yandex’s search and other services

Yandex 101

19

Yandex 101

Text Based Ads

vAuction based system based primarily on CTR and Bid

vPlacement on four types of sites:

vYandex Search

vPartner Search (ex. Bing.ru)

vYandex Advertising Network

vCatalogue & Market Pages

vThree types of targeting available:

vContextual/keyword

vGeographic (city level)

vThematic (categories of site types in network)

vVariety of tools available to help in campaign management

vKeyword suggestion, refinement & bid management

vAutomatic bid management

vBudget management

20

Yandex 101

Top Industries on Yandex

vAutomotivevBanking & FinancevBusiness ServicesvConstructionvConsumer ShoppingvHousing & RentalsvManufacturingvPersonal HealthvReal EstatevTourism

Top Ten Industries on Yandex

Sources: Yandex; Top Ten by overall spend in recent period

Wide variety of opportunities in both B2C and B2B

21

Who sees Yandex ads?Significant reach across multiple cities and countries

Yandex 101

Moscow and St Petersburg Other Regions

Internet audience

Contextual ads audience

Paid clicks

22

Text Ad AudienceGeographic targeting is critical for campaign success

Yandex 101

23

Yandex 101

Wide Array of High Volume Display Advertising LocationsHome Page, Mail, News, Travel, Money, Traffic, TV Guide, Market, Gift Cards, Maps, Weather, 404 Page...

24

SEO for Yandex

vOrganic engine rewritten and launched as MatrixNet in November 2009

vMost of the “old” advice doesn’t apply anymore

vMachine learning based; Archetypal sites” chosen as targets by “Assessors”

vMakes advising on SEO very hard; we don’t even know what the weights are

vNo formal customer support team for SEO’s

vVery good webmaster tools (available in English in Q3 2011)

vGeneral written guidelines available for how to get included in index

vGood writeup by Webcertain that summarizes how the engine works

Yandex 101


• Yandex 101


25

26

4 Things to Remember

vSimple auction based bidding; but with some local differences

vGeographic targeting is important; but you can dip your toes in without it

vRussian language is very different; localization and translation from English is difficult

v“Conversion” can be different; make sure you are measuring the right things

Get Started

27

Want to try Yandex?

vContact International Business Development team

vFree translation, training and initial setup

vLocal optimization and campaign feedback

vDedicated English speaking Account Manager in Moscow

vWeb based reporting, budgeting, etc. available in English language interface

vYandex U.S. entity available for simplified payment, invoicing & contracting

vDollars vs. Rubles

vPost pay billing available

vU.S. vs. Russian legal jurisdiction

vEuropean entity planned for late 2011

Get Started

Preston CareyDirector, Business Development

[email protected]+1 857.288.8762@prestoncarey

28

Thank You!

29

Appendix

Russian Advertising Market

Sources: All data other than for online text-based advertising for 2004 - 2006 based on ruble-denominated data from the Association of Communication Agencies of Russia (AKAR). Data on online text-based advertising for 2004 – 2006 are provided by AIB, and include both text-based advertising and a small portion of contextually targeted display advertising. 2010-2012 data from Kommersant. All data are reported inclusive of VAT


Russian Advertising Market ($MM)

30

$0

$3,000

$6,000

$9,000

$12,000

2004 2005 2006 2007 2008 2009 2010 2011(f) 2012(f)TV Radio Print Outdoor Internet

43%46%

47%

48%50%

56%6%

6%

7%

6%

5%

4%

31%

27%

24%

22%

21%

16%

18%

18%

18%

17%

17%

13%

5%

6%

9%

$3,930

$5,100

$6,800

$9,200

$11,150

$6,450

$MM

57%

4%

15%

13%

11%

$7,567

57%

4%

14%

13%

12%

$8,874

56%

5%

14%

13%

13%

$10,373

Company HistoryYandex Overview

Search technology developed and refined over almost 20 years

2004

2000

Fact extraction

technology in Yandex.News

The first contextual banner is displayed

Founding team joins CompTek

Founding team starts

developing Yandex search

technology

2007 1998

2003 1997

1993

1989

Incorporation of Yandex

Parallel Search

Breakeven point achieved

in Q3

Purchase of Yandex.Money

Launch of Yandex

advertising network

Proprietary anti-spam software

introduced

Yandex.ru website is launched

2002

2005 2008

Search of international documents

Yandex.Traffic

2009

MatrixNet – breakthrough

search technology

Yandex.Music

2010

Yandex.com

School of Data Analysis

31

32

B2B vs B2C: CPC DynamicsB2B CPC’s are pricer than B2C

Yandex Overview

33

B2B CPC DetailB2B CPC has on average remained flat over last 30 months

Yandex Overview

34

Yandex Overview

Yandex Advertising Network extends our reach

vHigh quality, manually moderated partner sites

vMinimum daily audience of 30k visitors per sitevExcludes “made for advertising” sites which can be prolific in Runet

35

B2C CPC DetailB2C CPC prices are generally rising; up to 50% per year

Yandex Overview

0%

25%

50%

75%

100%

1996 2009

85%

34%

15%

66%

U.S. Internet Population vs. Rest of World

Source: ComScore

Global Internet Population Growth


Global SEM is critical for most multinationals

% of total Internet

Population

36

United StatesRest of World

Moscow Central ex-Moscow Northwest Far East Ural Siberia Volga South

30%31%32%36%37%

48%

34%

61%

Internet Penetration: Moscow vs. Other Regions

Internet Users (2009)

TNS reports that over 85% of Internet users in Moscow have

broadband access

Internet Penetration in Russia (2009)

Source: FOM (18+ age group) for Fall 2009; 1. Includes Volga, North-West, South, Siberian, Ural and Far East Source: FOM (18+ age group) for Fall 2009

1


Central, incl. Moscow(31%)Other

Regions(69%)

37

Top 10 Runet Sites as of April 2010

Russia, Monthly Reach (000’s)


Sources: TNS Web Index Research38

39

Yandex Advert. Engines

Yandex Display AdvertisingvThree types of display advertising are currently offered:

Wide Audience

v ex. Yandex Home Page

v Most visited page on Runet (16M users per week)

v Top advertisers in Russia are here (Honda, Nokia, Coke, HP, etc)

Affinity

v ex. Yandex “What’s on Guide”

v Top guide to cultural entertainment in Moscow and St. Petersburg

v 3M unique visitors per week

Contextual

v ex. Yandex Search Engine

v Broad contextual targetting

v Large content sites can also be targetted

40


Yandex.Directis a Pay-Per-Click keyword-based service for placing ads on Yandex and on partner sites of the Yandex Advertising Network.

Contextual Text Ads

41

Contextual advertisingServed by Yandex based on the

content of the third-party website and/or the user’s search history

Ads on the Yandex Network of Partner WebsitesYandex Advert. Engines

Broader audience reach for Yandex and its advertisers; enhanced monetization prospects for network partners through targeted contextual and/or search advertising

Search advertisingServed by Yandex based on natural

search results

Bing, Aport & NigmaNetwork Partners

42


Yandex.Market

vLeading comparative shopping service

vWeekly audience of 2.5M unique usersvOver 1,500 vetted shops

43


Yandex.Direct Tools

vBid management, campaign reporting, keyword suggestions, webmaster tools and online help are all available

44

Other services and user-generated content

Yandex.Mail Email service

Spamooborona Anti-spam software

MoiKrug.ru Online network for professionals

Yandex.Fotki Photo hosting and sharing

Narod Website hosting platform

Utilities

Yandex.Bar Yandex toolbar utility

Yandex.Server Search tech. for servers and networks

Yandex.Desktop Search Search tech. for personal computers

Yandex.Online Incoming email notification system

Online payment system and mobile applications

Yandex.Money Online payment system

Mobile applications Mobile versions of selected Yandex services

Core web search service

Yandex.Search The leading search engine in Russia#1

Breadth of User Services and Category LeadershipUser Services

Yandex is one of the best known Internet brands in Russia

Other search and information retrieval services

Yandex.Maps & Traffic Maps and traffic monitoring

Yandex.News Aggregator of news

Yandex.Market Price comparison and shopping engine

Yandex.Blogs Blog search tool

Yandex.Adresa Yellow pages and address finder

Yandex.Auto New and used car search

Yandex.Video Video search and hosting service

Yandex.Dictionaries Reference and translation resource

Yandex.Catalog Thematic directory of Russian websites

Yandex.Afisha Movie and live events guide

Yandex.TV TV program guide

Yandex.Travel Schedules Plane and train schedules

Yandex.Weather Weather forecasts (1,700 cities worldwide)

#1

#2

#1

#1

#2

#1

#1 #1

45

• Detailed scalable maps with street names and house numbers

• Satellite images of Russia and Europe• Proprietary and exclusive live traffic congestion monitoring

system– Acquisition of road traffic monitoring agency Smilink– User-generated input via GPS-enabled devices

• Yandex.Adresa – fully integrated with Yandex.Maps, helping users find local business listings and events

• Mobile maps recently launched – 120,000 weekly users

Source: Server logs (stat.yandex.ru, stat.mail.ru)

Key features Monthly users in Russia, June 2008 (000s)

Yandex.Maps & TrafficThe leading maps and traffic service in Russia

Traffic jam viewer

Information on local businesses

User Services

#1

46

• Proprietary anti-spam technology• Unlimited storage space• “Opt out” option for advertising-free email interface• AJAX interface

– Search-as-you-type– Email quick summary feature

• Advanced address book⎯ Transliteration Latin/Russian alphabets

• Proprietary, popular anti-spam software– Used in Yandex.Mail as well as other web mail and

corporate email systems• Filters approximately 95% of email as spam• Performs analyses of thousands of email properties to

ensure highly efficient and precise filtering• Standalone server solution• Mass mail clustering• Self-learning system automatically collects spam

characteristics

Source: TNS

Advanced web mail service

‘Spamooborona’ anti-spam technology

Monthly users in Russia, June 2008 (000s)

Monthly users in Moscow, June 2008 (000s)

Yandex.MailWebmail service for the tech-savvy Russian users

Source: TNS

User Services

#2

47

• Innovative aggregation features̶ News clustering by event̶ Multi-document summary of an event̶ Geo-tagging and categorization of events̶ Name and fact extraction̶ Linked to biography and quotation database̶ Searchable news stories within minutes of

publication on the web by original source

• No editorial intervention− Technology-driven, politically agnostic − No preferred sources− No proprietary content− News aggregators popular in Russia for the

diversity of views they provide access to

• Over 2,000 “content-for-traffic” agreements with copyright owners − 30,000 automated entries per day− No copyright infringement

Key features of Yandex.News

Yandex.News

Source: TNS



News aggregation service

Source: TNS

User Services

#2

48

Yandex.News (continued)

Real-time breaking news

displayed at the top

Personalities in the news and link to their “press portraits”

Original story and full list of

related entries, images and

videos

Innovative functionalities: fully automated news clustering, summaries and facts extraction

User Services

Top news stories

Top stories in the same news category

49

• Over 1,500 pay-per-click merchants– Automatic product categorization and identification– Online retailers need to register to get their

products and prices referenced; no unsolicited “price grabbing”

– Strict merchant quality control• Does not compete with online store fronts

– Yandex does not keep inventory• User reviews of merchants and products

• Price comparison and consumer reviews for shops and thousands of products throughout Russia

• Advanced recommendation engine– Database of thousands of product models and

features– Product description compiled by Yandex

• Prioritizes display of offerings from shops in close proximity to users, increasing relevance to shoppers and advertisers

• Cross-shop basket• Public wish lists

Source: TNS

Key features

Value proposition


Yandex.Market


The leading comparison shopping service

Source: TNS

User Services

#1

50

Submit reviews

Yandex.Market (continued)

Product accessories

Related products

SummaryProduct

description

Pricing evolution

Publish in wishlist

Detailed product specifications

User Services

Sample product page

List of shops

51

Source: TNS

Value Proposition

• Comprehensive reference and multi-language translation tool for Russian users

• Access to online encyclopedias and more than 60 dictionaries– Yandex sponsors digitization of encyclopedia and other offline

resources under exclusive agreements• Integrated within Yandex.Search to power parallel results

Yandex.Dictionaries

Monthly users in Moscow, January 2008 (000s)

Access to a rich and ever-expanding database of dictionaries and encyclopedia

Languages available for

translation

List of dictionaries and encyclopedia

Total number of dictionaries

Recently added dictionaries and encyclopedia

Search

The leading reference and translation online resource

User Services

#1

52

• Photo sharing website• Unlimited storage space• Easy mass upload tools (built in browser)• Launched in 2007 and is already #3 photo hosting service in Russia• Accessibility on mobile devices / easy file transfer• Social network features

Source: TNS; although not measured by TNS, we believe that PhotoFile is #2

Key features


Yandex.Fotki

My favorite photographers

Real-time top photos of the day

Recently downloaded photos

Most popular categories

Photo contest

Easy photo download

Links torelatedservices

Photo hosting

User Services

#3

Easy photo print

Search

53

• Collects important information daily out of the Russian blogosphere

• The largest and most comprehensive blog search engine in Russia

• Providing instant access to more than 4.5 million blogs as of June 30, 2008

• Key attractions for our users include daily rankings on Yandex.Blogs of the most popular postings and topics

• Ability to filter spam

Advanced blog search and hosting service

Yandex.Blogs

Most popularblogs

Most discussed

entries of the day

The leading blog search engine in Russia

User Services

#1

Search

54

New User Services – Recently Launched

Train and plane schedulesAuto search

Numerous opportunities to add complementary services and drive further growth in user base

Disk (file sharing)Video search and hosting

User Services

55

Russian International

Active users (000s) Selected online merchant partners

Yandex.MoneyLeading online payment solution with a broad base of users and merchants

Total payments volume ($MM)

04-07 CAGR: 129%

04-07 CAGR: 132%

User Services

56

Automotive Market

Russian Automotive Market

v 2009 was a challenging year; overall sales down by 50%

v Currently 10th largest Automotive market in the world

v Roughly 1/3 the size of U.S. marketv Very low car ownership per capita compared to Western markets

v Government is strongly focused on supporting (domestic) industry:

v Increased import dutyv Subsidized loans for purchase of domestic autos

v Direct support and intervention for domestic OEMsv Incentives for car scrapping

v Tightening restrictions on importing older used vehicles

v Strong growth is forecast to return; expected to become the 3rd largest market in the world over the next 5 years

Sources: IHS Global Insight; Earnst & Young; Ministry of Economic Development

0%

10%

20%

30%

LADA Chevrolet Ford Hyundai Renault Kia Toyota Nissan Daewoo Mitsubishi

3%4%4%

5%5%5%5%6%

7%

24%

Automotive Brand Market Share in Russia

Sources: AEB

Top Ten Automotive Brands ($ Share, 2009)

Automotive Market

Foreign brands dominate the top 10

% of Russian Market

57

0%

23%

47%

70%

LADA Chevrolet Ford Hyundai Renault Kia Toyota Nissan Daewoo Mitsubishi

64%

44%

59%

66%

19%

33%

61%

56%54%

35%

Volume loss in 2009

Sources: AEB

Loss in Volume of Cars Sold, 2009 vs. 2008

Automotive Market

Market collapse was not shared equally among all brands

% of Volume Lost

58

59

Automotive Market

Automotive Industry on Yandex

vAutomotive

vBanking & Finance

vBusiness Services

vConstruction

vConsumer Shopping

Top Ten Industries on Yandex

Sources: Yandex; Top Ten by overall spend in recent period

Automotive is growing quickly and one of Yandex’s top industries

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

vHousing & Rentals

vManufacturing

vPersonal Health

vReal Estate

vTourism

Total Automotive Spend on Yandex

2009 2010

Automotive Spend on Yandex

61% Y/Y Growth

Housing & Rental

Construction

Business Services

Banking & Finance

Personal Health

Real Estate

Manufacturing

Consumer Shopping

Tourism

Automotive

0% 25% 50% 75% 100%

43%

45%

55%

68%

68%

77%

77%

86%

98%

100%

Relative Industry Competition in SEM

Sources: Yandex

Relative CPC on Yandex of Top 10 Industries

Automotive Market

Automotive CPC is much lower than other Top 10 Industries

Relative CPC

60

59% Avg. Across All Industries

0%

25%

50%

75%

100%

A B C D E F G H I J K L M N

1%1%1%1%

43%45%

55%

68%68%

77%77%

86%

98%100%

Automotive Spend by Brand on Yandex

Sources: Yandex

Relative Spend by Brand on Yandex (2010)

Automotive Market

Wide range of spend that is not well aligned with current market share

Brand

61

% of Largest Brand Spend

0%

1%

2%

3%

4%


0%

0.6%

0.3%

0.7%

0.5%0.4%

0.1%

0.4%0.3%

1.5%

0.5%

0.1%

0.6%0.5%

0.3%0.3%0.3%

0.6%

0%0%

0.2%

1.6%

0.3%0.5%

3.1%

0.1%

0.5%

0.3%

CTR by Brand on Yandex

Sources: Yandex

CTR by Brand on Yandex

Automotive Market

CTR optimization is highly varied even among big spenders

Brand

62

CTR

20092010

2010 Average CTR

$0

$0.38

$0.75

$1.13

$1.50


$0

$0.12

$0.96

$0.81

$0.50

$0.30

$0.43

$0.34

$0.50$0.45

$0.26

$0.56$0.49

$0.84

$0.17$0.10

$0.86

$0.56

$0$0

$0.87

$1.16

$0.45$0.42$0.43

$0.32

$0.48

$0.72

CPC by Brand on Yandex

Sources: Yandex

CPC by Brand on Yandex

Automotive Market

Average CPC has remained constant but individual brands performance has changed significantly

Brand

63

CPC

20092010

2010 Average CPC

0%

10%

20%

30%


0%0%1%

0%1%

2%2%2%2%

10%

26%

12%

21%20%

3%

0%0%1%

0%0%

5%

2%

6%

13%13%

27%

14%

17%

Share of Voice by Brand on Yandex

Sources: Yandex

Share of Voice by Brand on Yandex

Automotive Market

Large spenders share of voice has shifted strongly in 2010

Brand

64

% of Total Automotive

Industry Clicks

20092010

65

Automotive Market

Automotive SEM Takeaways

v Establishing market share is key in this fast growing market

v Lower market share foreign brands are increasing budgets aggressively

v Dominance in the automotive SEM market is still being established

v Fairly low competition todayv ROI and tracking technologies are not well established

v Budgets are all over the map but growing

v Existing “global” campaigns are rarely well optimized for local realities