April 15, 2008
Are you looking to increase your international marketing? Central and Eastern Europe are prime areas -- if you can handle the challenges.
In our latest Special Report, we’ve put together a compendium of what to watch for in the region. Plus, samples and stats from an email strategy that works in these developing countries.
The Internet may be old news in the US, but ecommerce has been slower to develop in many parts of the globe. A prime example is Central and Eastern Europe.
Markets in this region are still recovering from communism. Ecommerce trade lags behind places like South Korea, the UK and Japan. But that doesn’t mean Central and Eastern Europeans don’t buy online.
Money can be made if you’re willing to contend with the cultural, legal and technical differences. Tactics like simple email marketing are adding to companies’ bottom lines every day.
In this Special Report, we look at how to market in Central and Eastern Europe and give examples of email campaigns that are working there.
Defining the Region
What countries make up Central and Eastern Europe? Well, that’s in a bit of a dispute. The United Nations, Central Intelligence Agency and Time Almanac all define the region differently, for instance.
For this Special Report, we defined Central and Eastern Europe as: east of Germany/Austria, south of the Baltic Sea, Russia and west, and Turkey/Greece and north (see map hotlinks below).
The region’s population is about 300 million. Many countries are growing fast but no two are the same. Each has “different languages, different problems, different specifics, different markets,” says Andrej Nabergoj, CEO, Noovo, a Solvenia-based social network and search engine.
Examples of three economies:
- Slovenia, with a population of just over 2 million, has more than 1.25 million Internet users -- 62.2% of the population, which is one of the highest Internet penetration rates in the region. Slovenia also enjoys the highest GDP per capita in Central Europe, $27,300, according to ‘CIA: The World Factbook.’ (In comparison, the US has 71.4% Internet penetration and $46,000 GDP per capita.)
- The Czech Republic “is one of the most stable and prosperous of the post-communist states of Central and Eastern Europe,” according to the CIA Factbook. Half of its 10.2 million people have Internet access and its GDP per capita is $24,400.
- Moldova, one of the poorest countries in Europe, has a GDP per capita of $2,200, and only 19.5% of its 3.8 million people have access to the Internet.
Scanning the Markets
Despite their differences, ecommerce markets in Central and Eastern Europe are emerging. Clear leaders have yet to dominate many areas, and that spells opportunity.
“Very few companies are doing email in any kind of real scope. Although, of course, there are some in each market. Markets like Poland, the Czech Republic and Hungary are quite advanced, but most markets are still incredibly far from any relevant email marketing activity,” says Rok Hrastnik, International Internet Director, Studio Moderna, a direct response marketing network.
Hrastnik and his team do email marketing in 22 different languages in 19 markets in the region. But roads into the region can be filled with potholes, such as different legal systems, languages, cultures, economic development, risks and Internet use. You have to assess these differences or risk legal problems and wasted capital.
Here are eight major differences to look for:
-> Difference #1. Lack of benchmarks
Not much research exists on email (or Internet marketing, in general) for the region. The only available benchmarks are for online display advertising, says Hrastnik. You have to learn from your own numbers and assess success by experience.
“In terms of overall Internet measurements being available, Slovenia is definitely a leader,” says Hrastnik, whose main office is based there. “But, unfortunately, our markets still don’t have any email open rate benchmarks, email clickthrough rate benchmarks, and so on. Most of the advertisers here don’t really care about metrics.”
-> Difference #2. Murky laws
The region is dominated by countries with local legal systems and murky laws.
In some local markets if you read the legislation, letter by letter, “what it actually seems to say is that you can only send the email if you have written consent from the subject, like a person’s signature,” Hrastnik says. “That, of course, doesn’t hold in practice, so that makes it very difficult to navigate through the legislation and make practical decisions. And different market inspectors treat this legislation in different ways. Usually you won’t get anywhere just by reading the laws.”
Also, many countries don’t operate under a system of legal precedents. Therefore, whatever you do with email, wherever you do it, check with your attorney first.
-> Difference #3. Spotty credit-card use
Few countries in the region have thriving consumer credit markets, which can affect consumers’ faith in ecommerce … but not always.
“Generally, people in less-developed markets don’t use credit cards and don’t buy online so much. [However], in Hungary, for instance, which is a very developed market, people don’t use credit cards at all,” says Nabergoj. “[Penetration] depends also on the banking sector, how developed and how privatized it is. When was it privatized?”
Payment for online purchases in Latvia, the Czech Republic, Ukraine and Romania, for instance, are usually made with cash on delivery, not credit cards, according to Gemius, an online research agency in the region.
-> Difference #4. Language barriers
Many of the two-dozen languages Hrastnik emails in have special characters. He manages communication with a local office in every market he targets. That way translation and customer service are handled locally.
Tips for hiring a translator:
o Look for experience - Find a translator familiar with your company’s terminology. For example, if you self golf equipment, your translator should be familiar with local and American golfing terms.
o Hire local - A translator based in Slovakia, for instance, will usually be better at translating into Slovak than one based in the United States.
o Request sample translations - Ask a translator to translate a few paragraphs of text and have it checked by a third party. You’ll likely have to pay for the sample.
Check out the links below for a directory of translators and two translator associations.
-> Difference #5. Easier to spot spam
Spam regulations differ from country to country, but the region is not as heavily regulated as the US. Also, countries other than Russia and Ukraine receive very little “local spam” or spam in the correct language, says Hrastnik. “Most spam that we do get is US spam, or Chinese spam, or along those lines.”
-> Difference #6. Mishmash of ESPs
The online markets are small in some countries, but that has not limited the number of email service providers. Even a small country like Slovenia, with its tiny 2 million population (1.2 million online population), has about 10 major providers, including Gmail, Hotmail and Yahoo!, that you have to adapt for.
Here are some problems Hrastnik has encountered with Web-based email systems. They:
o Only receive text emails
o Don’t support all the characters needed to communicate with each audience
o Refuse embedded images
o Render HTML code in unique ways
“In Latvia, the biggest ESP there has a limit on how many characters can be in a single line. So in an HTML email, it tends to break links or not display the entire link. For that specific ESP, our entire tracking system doesn’t work, but we had to change for that one ESP because that was the largest ESP in the market,” says Hrastnik.
-> Difference #7. Online ads mirror GDP
Countries with higher GDPs have better developed online ads. “There is a strong correlation between economic development and online advertising,” Nabergoj says.
If you’re looking for a country with a well-developed online market place, look to countries with higher gross domestic product, such as Poland, Hungary or Slovenia.
-> Difference #8. Concentrated media power
Media is concentrated in a few hands.
“Most of these markets are not so transparent as one might think. Because of privatization, people started to accumulate huge properties in the media,” says Nabergoj. “People can own a really big chunk of the media business and control it entirely, but you might not know it if you come to the market as a foreigner. You want to know who the players and the movers are.”
Getting Started With Email
Don’t immediately try to cast a wide net over Central and Eastern Europe. Hrastnik operates in 19 markets, but that’s only after years of expansion.
“Don’t even think of going pan-European off of email. You need to adapt and localize for each individual market,” he says. “Don’t think you can just create an email creative and push it out to three, four, five, six or more markets. Adapt and localize for each individual market.”
Here are four tactics to get started:
-> Tactic #1. Pick a developed market
Starting in a more developed and stable market is easier.
“The leader in Internet marketing is Slovenia. Very close behind, you have Poland, Hungary, the Czech Republic and Slovakia. These countries are well-developed and also have reliable legislation. Poland is problematic in terms of competition,” Hrastnik says. “Even companies like eBay are finding it difficult to compete in that local market.”
Market size is the most important criteria when judging a country’s attractiveness, Nabergoj says. But you also should look at how developed the market is and how stable the market is. “So, you want to consider which countries are already closed to the European Union, or part of it.” (See links below for an EU member list.)
-> Tactic #2. Find a local partner
Because the region is so different from the United States, Hrastnik recommends finding a local partner. This will smooth your transition and help you understand the ESPs, laws and customs.
-> Tactic #3. Hire local lawyers
You’ll also need a few lawyers. At least one should specialize in your target country and another should specialize in the branches of law that affect your business.
-> Tactic #4. Open a local office
Hrastnik operates an office in every country he sells in. They handle all the local marketing and customer service. At a minimum, hire customer service reps and translators and put them into a local call center.
Setting Up an Email Campaign
Email campaigns in Central and Eastern Europe mimic the US. You build a list of subscribers, send good content and occasionally send a product promotion. But ways to build an email list are limited. Here’s why:
- Few co-registrations on the market. “There might be one or two, or 10 at the most, in these 18 countries, that I’m aware of,” says Hrastnik.
- Poor list rental deals. “You can’t get good list rental deals, or you can only get them in a couple of cases,” says Hrastnik.
- Reluctance of people to sign up for an email newsletter without some incentive.
So what are the best strategies to adopt? Follow these seven:
-> Strategy #1. Pick a dependable provider
Your email service provider will be the foundation for your campaigns; it’s important that it be dependable. Get guarantees for the capabilities and character sets you need to market locally.
Also, make sure your provider can prove its reputation, deliverability rates and white-list status on email servers throughout the market. This research will take time but can save you from costly mistakes.
-> Strategy #2. Use prize games
One of the best ways to collect email addresses is to run a contest with substantial prizes, says Hrastnik. “We use trips, vacations overseas, luxury trips -- stuff like that. We do offer electronics, but usually it’s big-ticket items.”
Hrastnik’s games operate on a point system; whoever earns the most points wins. Participants earn points by:
o Recommending the game to a friend
o Commenting on a product or article
o Recommending a product
o Forwarding a video
Prize games are promoted virally most of the time, says Hrastnik, but he jump-starts them with:
o Ads in house email newsletters
o Mailings to external lists
o Banner ads
o Text search ads
These campaigns usually collect 40,000 to 80,000 email addresses within a month, says Hrastnik. “We’ve had a couple campaigns where we went over the 120,000 mark as well.”
-> Strategy #3. Offer white paper ‘freemiums’
If you’re a B-to-B marketer, Central and Eastern Europe is a great place to be because there are few white papers or ebooks in the region.
“There really is so much you can do generating leads with valuable content that you can’t do in the US anymore,” Hrastnik says. “Actually, right now, there are fewer white papers and ebooks on the market than there were in the US back then, in 2000. So if you push out a high-value white paper or ebook, people are bound to really grab it up.”
-> Strategy #4. Single or double opt-in?
There is no legislation that tells you that you need to do double opt-in for email sign-up. “Usually we do single opt-in,” says Hrastnik. “In our tests, we found if you want to do double opt-in, then usually you lose about 50% of the email addresses that you want to confirm.”
-> Strategy #5. Draw interest with editorial content
One of Studio Moderna’s brands sells household goods and has an email newsletter with weekly tips on cleaning, weight loss, diets, etc. (see hotlinks below).
“It really isn’t product-focused. We’re really trying to make it high-value content,” says Hrastnik. “What we found was we always need to bribe subscribers to keep on reading. So, it’s mostly valuable content mixed with product-related articles, of course, full of product promotions in between the articles.”
For a mattress-selling brand, Hrastnik and his team oriented a newsletter toward sleep-related content but also sex and personal relationships. “After that, every newsletter had at least one sex article, and those of course were the best read.”
NOTE: If you write about touchy topics, be careful. “Don’t try to use sex in countries like Turkey and be very careful in using sex in countries like Poland,” Hrastnik says. “Turkey is a Muslim country, and Poland is a very Catholic country, so a different set of rules apply there.”
-> Strategy #6. Send follow-up emails
Rely on follow-up emails. “The number one takeaway is whenever you’re doing a product emailing, always, always follow up,” says Hrastnik.
Sending product promotions in a three-email sequence over two weeks generally works best. Here’s how they’re set up:
o First email - graphic-heavy, announces the sale
o Second email - sale reminder sent one week later, includes a product list with images and hyperlinks tied to a shopping cart
o Third email – short, text-only email sent two days before the sale expires to serve as a quick reminder
Hrastnik uses these campaigns to:
o Promote seasonal sales
o Promote new product launches
o Follow-up with prize game participants after a contest
Hrastnik recently ran a three-email seasonal sales campaign in Romania with these results (see creative samples below to view the emails):
o Email #1, sent week 1:
Clickthrough rate: 13.7%
Conversion rate: 1.36%
Percent of total campaign sales: 44.8%
o Email #2, sent week 2:
Clickthrough rate: 11.6%
Conversion rate: 1.21%
Percent of total campaign sales: 36.9%
o Email #3, sent week 3:
Clickthrough rate: 7.8%
Conversion rate: 0.97%
Percent of total campaign sales: 18.2%
“These should not be taken as any kind of average to determine any benchmarks for Romania, this type of campaign or the region because results are quite different across the board,” says Hrastnik.
-> Strategy #7. Focus on timing
Getting emails into a subscriber’s inbox between 10 a.m. and 1 p.m. works best, says Hrastnik. Wednesday and Saturday tend to be the strongest days.
Useful links related to this article
Creative samples from Central & Eastern Europe:
United Nations: map of Central and Eastern Europe:
Internet World Stats: usage and population statistics:
Wikipedia: list of European Union Member States by accession:
Gemius: reports and presentations:
CIA: The World Factbook:
TranslatorsCafe.com: directory of translators, interpreters and translation agencies:
American Translators Association:
Institute of Translation and Interpreting:
Noovo: a social discovery platform: