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Totally wired Some parts of CEE are exploiting the business potential of social networks better than others. It’s only a matter of time before the cautious catch up Words: Charles orton-Jones50
SoCIal nETworkIng S ocial networks seem to baffle and annoy seeking to talk or market to Poles needs to know about businessmen. Mobile phones they love. it. But Facebook is likely to overtake Nasza-Klasa, just Google they get. Understanding AdWords as it has done with other networks across the continent. and search engine optimisation (SEO) is Today Facebook has 4.5 million Polish members compulsory in the internet age. But leave a and search requests for the term Facebook outstrip meeting to check your Facebook account and you’ll face searches for Nasza-Klasa tenfold. The future is not hard a chorus of derision. It is as though social networks are to predict. In fact Facebook is now either number one or leisure tools. No serious exec would be caught using one. destined to be number one across the world. So here’s the reality check: social networks are the future of business. They are more important than a markETIng rEvoluTIon mobiles or search engines. If you do not understand the The rise of Facebook has meant businesses across landscape of social networks, you are a dinosaur facing CEE are waking up to its immense possibilities. Unlike extinction. To crush any lingering doubts, reflect on the the local networks it is replacing, Facebook offers fact that Facebook recently overtook Google for traffic more than mere banner ads. In the Czech Republic, in the United States. Furthermore, Facebook is growing for example, there are examples of viral marketing, at 185% to Google’s 9%. It has more than 500 million consumer interaction and brand initiatives as impressive members and is almost certain to reach 1 billion. as anything in the US. The foremost Czech expert on Convinced? Then you’ll be eager to learn more about Facebook is Jan Rezab, who has a string of technology these networks, such as who uses them, who does what start-ups under his belt, including Candytech, a to whom on them, and where the dollar signs are located. ThE rISE of faCEbook The first lesson is that Facebook rules. This is true He advertised for free across CEE. Not everyone realises this – many using Facebook and made executives still believe the old social networks, which sprang up across CEE over the past decade, are the money from it. The whole ones to watch. Here’s what happened. Until a year ago, each country marketing campaign in CEE had its own national champions. Lithuania had Draugas, a site for friends to stay in touch. The Czech took 10 minutes Republic had three sites battling it out: Spolužáci was the place where old classmates got in touch; Libimseti jan rEzab, CandyTECh and faCEbakErS had a dating angle; and Lidé.cz was the all-purpose network. In Hungary iWiW gained total dominance. Facebook was a late entrant into Europe – not Facebook marketing firm and Facebakers, a statistics surprising since it was founded in 2004. The drip-drip of portal specialising in Facebook data. media coverage marvelling at Facebook’s ascendancy Rezab evangelises about the business impact of in Western Europe started to influence consumer Facebook. “It’s been amazing. Let me tell you one behaviour. In 2009 Facebook gained traction and grew story,” he says. “There is a guy in Prague who changes exponentially. In the Czech Republic in the past six car tyres. His business has a Facebook page with months it has grown from 1.6 million to 2.8 million users, only 140 friends. He did a status change offering 15% a third of the entire population. Traffic to the three native discount and immediately got seven clients out of that. networks is now a fraction of what it was. Think about what that means. He advertised for free Facebook is now number one in 21 of the 27 using Facebook and made money from it. The whole European Union member states. The exceptions are marketing campaign took 10 minutes. Latvia, where Draugiem is number one, but may be “Businesses across the Czech Republic are doing the toppled within a year; Hungary, where iWiW is so same thing. The most popular radio station, Evropa 2, dominant that Facebook can’t seem to get started; and uses Facebook for their requests. They used to say ‘Call Poland, home to the well-funded, well-run Nasza-Klasa. us,’ then ‘Email us.’ Now they say ‘Facebook us.’ They Founded in 2006 Nasza-Klasa, means “our class” in have 200,000 fans, which is more than the BBC!” istoCk reference to its original mission of connecting old school Candytech works with the largest companies in friends. It has 11 million members, meaning that anyone the Czech Republic to create Facebook campaigns.pwc.com/transform 51
Clients include Tesco, GE Money You’ll find a similar culture in Nasza-Klasa still has a lot to offer: “It Bank and Peugeot. Rezab explains: Poland. The best-known marketing is for people who want to meet their “For example, Peugeot wanted to company for Facebook campaigns old school friends. It doesn’t have increase the number of Czechs is Agencia Społem, based in the same functionality as Facebook. asking for a test drive. We created Warsaw. It maintains Facebook It is worth knowing about because a quiz which guessed your mental pages for the likes of Nike Poland everyone is there, with 11 million age. The age it discovered was and television channel TVN. A accounts. If you want to market in always lower than your real age, recent project for Milka chocolate small cities, it is maybe better. But it which people loved. They showed on Facebook involved a vote for isn’t cheap to buy advertisements on their friends and 200,000 people where the firm should spend 1m Nasza-Klasa.” downloaded the application. At złoty earmarked for environmental A recruitment site in Poland is the end of the quiz there was a projects. “We got 22,000 votes from worth a mention too. GoldenLine is a statement that if users liked the Poles who wanted to get involved,” recruitment-based site like LinkedIn. game, they would love the new says Agencia Społem spokesman El Mahdi says: “GoldenLine is used Peugeot model. We had 1,300 Jakub El Mahdi. by headhunters, so it can help to istoCk test drives resulting, a huge success El Mahdi says that although have your CV on it. It is popular for for Peugeot.” Facebook is growing fast, Polish professionals. If you want to Cee’s top soCial netWorks* ArmeniA bulgAriA HungAry litHuAniA russiA 2 Facebook 2 Facebook 3 iWiW 2 Facebook 2 mail.ru 3 Odnoklassniki 33 Aha.bg 5 Facebook 6 One.lt 3 VKontakte 13 Vkontakte 34 mail.bg 10 Draugas 6 Odnoklassniki 55 elmaz KAzAKHstAn 16 Facebook AzerbAijAn 4 VKontakte mACeDOniA 2 Facebook CrOAtiA 11 Facebook 1 Facebook serbiA AnD 9 Odnoklassniki 2 Facebook 12 Odnoklassniki mOntenegrO 14 Disput.az 12 Forum.hr pOlAnD 40 myspace 32 VKontakte lAtViA 3 nasza-klasa.pl 41 linkedin CzeCH republiC 1 Draugiem.lv 8 Facebook belArus 2 Facebook 8 One.lv 25 goldenline slOVAKiA 2 VKontakte 11 lide.cz 10 Facebook 2 Facebook 15 Facebook 20 Odnoklassniki rOmAniA 61 porada.sk 17 vk.com estOniA 30 boomtime.lv 5 Facebook 4 Facebook 6 hi5 uKrAine bOsniA AnD 8 Orkut 2 VKontakte HerzegOVinA 25 Odnoklassniki 11 Odnoklassinki 2 Facebook 29 VKontakte 12 vk.com * The numbers denote the ranking of social networks in each nation’s list of most visited websites Source: Alexa.com52
SoCIal nETworkIng recruit a Polish executive, it can be a just one. Applications are popular. good place to start looking.” The game Happy Farmer has 6 Over the border in Lithuania the millon users. Major brands, such as situation is identical. Facebook is Standard Vodka, have a presence, a major part of the marketing mix marketing to consumers and to for firms of all sizes. In fact Vilnius wholesale distributors. It really is is home to Kitoks, a Facebook very similar.” Preferred Developer, one of just 10 Wilsdon moved to Russia in outside the US. 2005, so he can compare the UK “The potential of social networks and Russia. He believes the major was recognised only half a year difference is the sophistication of ago. Now many Lithuanian business usage. “There aren’t many companies introduce themselves internet marketers in Russia. There on Facebook.com. Big companies tend to be a lot of one-man-band and famous brands use Facebook firms.” Russians firms are also slow applications,” says Kitoks founder to capitalise. “International firms Tomas Kacevic̆ius. He points to here realise the value,” he says. “The brands such as Svyturys beer and approach of native Russian firms Pigu.lt, the nation’s biggest online lacks rigour. For example, there are a store, which have both established lot of banner ads and SEO, but often powerful Facebook presences. without tracking. You really need to nETworkS undEr fIrE The potential of social monitor every campaign and every rouble you spend.” He says the national social networks are suffering. “The networks was recognised This point is emphatically endorsed by Alexander Repiev, popularity of One.lt and Draugas decreases because of Facebook only half a year ago. founder of the Repiev School of Marketing and Mekka Consulting. growth. Moreover the audience of One.lt is mostly under 18 years old. Now big companies use “Many employers are suspicious of social networks. They don’t like Facebook.com consists of older Facebook applications employees using them and they users. Needless to say, this makes aren’t sure how to use them to Facebook.com more attractive for TomaS kaCEvICIuS, kITokS market their products.” This, he brands and business. There are says, is partly due to the low status 633,760 Lithuanians on Facebook of marketing in Russia. Social and two-thirds of them fall in the pointless. VKontakte has 42 million networks are still not considered range of 18-35 years old.” users, with 17 million unique users respectable tools, he adds: “It is too Trends move fast. Kitoks logging in each month. The webmail early to say that social networks are itself is only two years old. “Our service Mail.ru offers a social used by the majority of businesses first Facebook application was network extra, My World, which in Russia, or that those who use developed one-and-a-half years boasts 15.6 million unique users a them use them expertly.” ago. It was a novelty in the month and Odnoklassniki 15 million. This will change. Analysis by Lithuanian IT market – only 80,000 By contrast Facebook has only 1 Moscow management consultants Lithuanians were on Facebook. million Russian users. J’son & Partners suggests usage of Now half of all internet users are on Nick Wilsdon, the British chief social networks in Russia will doublemasterfile Facebook.” In Romania, Estonia, executive of Moscow-based internet by 2013. Membership will increase Bulgaria, Slovakia and the Balkans marketing agency E3Internet, 40% year on year. the situation is similar. says the Russian social networks The phenomenon of social The frontier is Ukraine, Russia, are just as good as their Western networks is just getting started. ■ Kazakhstan and Moldova. Here counterparts. “VKontakte has the the appeal of Facebook clone same functionality as Facebook,” Charles Orton-Jones is a VKontakte and classmates he says. “You can programme freelance business journalist, site Odnoklassniki mean applications in a variety of specialising in entrepreneurship Facebook itself is rather languages, whereas Facebook has and small businesses. pwc.com/transform 53