Global Marketing Strategy: How Hotels.com Approaches Russia
For international businesses, selling a product or service in a number of markets offers great opportunities but just as many challenges when it comes to maintaining the brand’s image, managing the company’s operations, and delivering the same options for users regardless of location. Monitoring, targeting, and growing business in a foreign market takes well-researched and executed businesses strategies coupled with a constant awareness of the Internet’s intertwining relationship with both cultural trends and economic developments on domestic and international scales. Many metrics of worldwide online behavior and connectivity are coalescing but are still distinctly defined by cultural differences, access to the Internet, and localized Internet behavior.
While certain aspects of business and more specifically marketing strategies can be applied worldwide, each market needs a bit of TLC to reach its potential. To better understand some of the ins and outs of this process from an expert in the field, I spoke to Michael Korkia, senior marketing manager at Hotels.com.
Korkia has been at Hotels.com for the past five years in various marketing roles leading up to his current position managing the marketing for the German speaking region, Eastern Europe, Middle East and Africa point of sale and point of supply with key focus markets being Russia, Poland, Turkey and Middle East.
As a company that has 85 websites in 34 languages, Hotels.com puts a lot of attention on correctly approaching each individual market. Given Korkia’s marketing experience in a number of regions, he offers some great insight on a global marketing strategy as a whole but we (or rather I) honed in on the Russian market during our conversation. This helped to to magnify an area we are both familiar with to offer a few specific examples of tailoring a global marketing strategy.
When it comes to the overall global strategy and promoting such a big brand internationally, Korkia explained that Hotels.com takes a somewhat unique strategy compared to many other big brands by first building a solid core business through digital advertising and then following up with other advertising channels. More specifically, Korkia answered, “The foundation of our advertising and exposure for Hotels.com starts with digital channels. The core of our online advertising is search – both paid and organic; that leads our entire marketing structure. We surround this with other forms of advertising like social, CRM, affiliate partnerships, display, mobile oriented activities, travel meta search like price comparison sites, and so forth.”
As to why this is the strategy, Korkia said, “We start with the most affordable approach, more organic and in house channels. Then when we see there is potential and people are embracing our brand, we start with the paid channels. At some point, we turn to other brand exercises like TV or print.”
Global Strategy for a Local Market
When I asked about the way the global strategy is adapted and applied to Russia, Korkia first laughed. Throughout his time at Hotels.com, Korkia, a Russian speaker, has maintained an active role managing the company’s strategy in Russia – first as an emerging market and now as a focus market.
When Hotels.com originally started marketing in Russia 5 years ago, their generic approach, as Korkia put it, was not working. Cracking Russia required two steps for Hotels.com:
- Creating the correct product for the Russian customers
- Advertising through popular local Russian channels
Producing a version of Hotels.com that resonates with the local audience was crucial. This should be applied for all global markets but for Russia it means ensuring that all of the grammar is accurate, Russian language nuances are included, and that distinct cultural characteristics of the Russian people are taken into account.
I was curious if Hotels.com attempted anything particularly creative with ad copies to connect with the Russian audience that may not resonate in other places. In response, I learned that more of the strategy is geared toward an understanding of the differences among the regions of Russia. Taking into account the differences in major cities like Moscow and St.Petersburg verses places like Siberia or the Far East are important to keep in mind when targeting different audiences.
Internet penetration and search behaviour vary in these places. For instance, Russians like traveling to Turkey, Egypt, and Russia during the summer months but the specific resort towns vary by the users’ home location. Users in Moscow and St.Petersburg prefer Sharma El-Sheikh has a top destination but people living in Yekaterinburg prefer trips to Hurghada.
As someone well aware of the market in Russia, Korkia describes the dynamic for point two as such, “Russia is a difficult market and very different from everything else. The main thing is that the population uses their own channels. For instance, they don’t use Google – well they do, but not that much. Users prefer Yandex. Russians don’t use Facebook as much, they prefer Vkontakte and Odnoklassniki. People turn more to Ozon for a marketplace rather than Amazon.”
To Korkia, this is the challenge compared to some other markets. Rather than advertising with a few big providers, as he puts it, “You have to tailor your advertising and go with Yandex, you have to go with Vkontakte etc.” A special approach in Russia in necessary. Korkia attributes the success of Hotels.com in Russia to their two key ingredients for success.
Are Google and Facebook Important?
Still I assumed many of the big players like Google and Facebook were part of Hotels.com’s strategy since they do maintain an important presence in Russia. Korkia confirmed that they were still part of the strategy but there were some significant differences to keep in mind. More specifically he commented, “Obviously Yandex is bigger but the audience itself is the main difference for us. We see more Russians using Google in Moscow and outside Russia while more traffic on Yandex comes from Russia as a whole. “
When it comes to paid advertising on theses two search engines, Korkia said Hotels.com has a completely different approach for each. Yandex is Point of Sale (i.e. targeting Russian speakers going anywhere), while Google is on Point of Supply structure (i.e. people coming to Moscow to New York, etc. regardless of their location or language). Korkia told me, “We moved all our Google accounts to a different structure recently. Since Yandex is only active in Russia for us, it didn’t make sense to move it to the same model. Although the structure has changed, we still are seeing similar differences in performance .”
Performance Over the Past Year
While we were on the topic of performance and success in Russia, I obviously had to ask how the past 12 months have gone for Hotels.com. I went into the question knowing that the past year of downturns in Russia led marketers to put greater emphasis on their digital marketing efforts. In response to the economic situation, marketers in Russia reduced their budgets in all advertising channels but digital advertising. According to research by the Association of Communication Agencies in Russia (AKAR), digital advertising increased by 9% in Q1 2015 compared to Q1 2014. Performance marketing is the logical approach that allows advertisers to control their spend and easily monitor results. This year up to 30% of marketing budgets are dedicated to online advertising.
For Hotels.com, they were already putting their emphasis on paid search so I instead asked about the major changes the travel industry and Hotels.com faced in the past year. Korkia explained, “Obviously the ruble decreased this year and there was some impact. Its difficult to get people to make big investments in Russia at this time but there is also a big perception of things going poorly versus the reality of business. Despite the change in the Russian economy people have continued to seek travel accommodations make purchases. From our side, we still see people spending. Russians are still the biggest spenders in our European audience. So it’s still increasingly important to focus on this market.”
However, Hotels.com did notice a shift in their customer’s behavior. Korkia described a few trends that developed over the year saying, “It’s not that people are decreasing their travel to places like the US and Latin America, rather people are reigning in their spend and booking more cheaply like a more typical user. There’s also been a greater shift in those booking domestically.”
Obviously adjusting to economic change and user behavior is very important for businesses internationally. Reacting to the changes is necessary but also preparing for the future is just as vital. Looking ahead in Russia, Korkia said Hotels.com has recently been more confident about Russia but ultimately things will boil down to any fluctuations in the economy. They are constantly checking in on any changes in Russia and trying to stay ahead of the curve. “We re-forecast in Q3 so we still have time to watch things and make some decisions. If we see stability, we will be much more aggressive in Russia.”
Thanks to Michael Korkia and Hotels.com for the opportunity to learn more about global marketing strategies! Whether you are looking at a new international market or working to improve your business’ current strategies abroad, utilizing knowledge on the local audience and local marketing channels is key to success. Staying informed will keep your brand relevant across the globe!