Conquering Eastern Europe a Challenge for Western Firms

clickz_ukandeu.gifI’ve written a couple of pieces regarding the booming Eastern European online ad market recently, but entering those markets as a Western firm isn’t as easy as it may seem. That was the message from the “winning business in emerging markets” panel at last week’s Interactive Advertising Bureau Europe Interact conference in Brussels.

Comscore VP Europe Mike Read kicked things off with some encouraging Eastern European growth figures. However, the panelists suggested the realities of actually doing business in and generating revenue from those markets remained a challenge.

“If we take Russia as an example, the ‘I come and I conquer’ attitude doesn’t fly,” said Andrey Sveshnikov, who is in the process of setting up an IAB in that country. “Russia is a historically and culturally complex place. Setting up business there will take patience, and may require you to alter your business model,” he added.

Filip Pieczynski, VP of Poland-based online research firm Gemius, warned against underestimating local online brands, and indeed the governments of places such as Russia. He cited Google’s relative obscurity in the search market there, for instance, alluding to its proposed deal to acquire ZAO Begun which was blocked by Russian regulators.

That said, the panel — which also included Martin Radelfinger, chief business development, M&A officer of prominent Eastern European media firm, Goldbach Media — acknowledged that if the time was spent to understand the local cultures and markets, margins could be achieved, through the discounted cost of human resources, if nothing else.

Ultimately, the key takeaway, and something I found extensively during my reporting on the region, was summed up nicely by Pieczynski: “Each individual market is completely different. There’s no golden rule to conquer all.”

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