Yandex recently interviewed Skyscanner, one of the most successful companies in the Russian travel industry that grew 50% in 2014. Yandex sat down with Skyscanner’s Russian marketing manager, Ilarion Kopaleyshvili, to learn more about their business and online marketing in Russia since their launch on Yandex.Direct in 2009. Skyscanner is one of today’s highest-ranked global travel search engines. Users can compare prices for flights, hotels, car rentals, find exclusive deals and book everything online without additional fees.
Skyscanner was born in the early 2000s, when a young programmer (the company’s future CEO, Gareth Williams) and two of his fellow undergraduates were looking for a flight from England to France. Tired of checking airline and travel agency websites one at a time, one of them wrote a program that copied prices directly from the websites and organized them in an Excel spreadsheet. After they put the program online, they were stunned to see thousands of people per day using their creation. The three friends realized that they had something truly special and in-demand, so they quit their day jobs and started building a dedicated site to search and compare travel prices to any destination in the world.
How do users on Skyscanner find such amazing deals?
Flight prices are generated according to complicated algorithms that only the airline companies themselves fully understand. Skyscanner sidelines these algorithms entirely, finding only the most worthwhile offerings and making them available to the public. Over our twelve years in operation, we’ve established our own set of rules for how to always get the best deal. The most important thing is to book early. Book at least two or three months in advance, with six months being ideal.
Secondly, people should be flexible in planning their itinerary. With us, users can find out in just one click what day of the month or even year has the lowest prices for their destination, and what neighboring airports have to offer. Likewise, it’s important for travelers not to automatically ignore offers with connecting flights, to be open to traveling in fall or spring, and never book flights around holidays. The closer people follow this advice, the less they end of paying. A determined Skyscanner passenger might be holding a ticket that is two or three times cheaper than what the person in the seat next to them paid.
What’s the biggest difference between Skyscanner and its competitors?
Skyscanner was one of the first sites to compare flight prices from airlines and travel agencies, and is now one of the biggest names in the travel industry. Because of our history, we have always been able to focus on our own new ideas, not just follow in the wake of similar services. Travelers choose us time and again for countless reasons. One example might be the option to search for the cheapest flights out of a city without having to put in a destination. We have gotten great feedback on this feature.
The Internet is chock full of stories on the secret methods travel search engines employ to generate prices based on the perceived financial standing of each customer. What can you say about these claims?
Of course, we’ve heard about sites that show higher ticket prices to people searching from expensive computers or smartphones, or those who have used the service before, in order to spur them into making a quicker purchase. If these kinds of pricing mechanics actually exist, then Skyscanner is the most effective tool for travelers who want to avoid being duped. It operates as one big anonymizer, finding only the most advantageous deals the market has to offer.
After having already operated in Europe for six years, why did you finally decide to branch out to Russia?
When our site first started operations, it was logical that we focus our efforts only in Western Europe. However, once we realized that a huge number of Russians were already using Skyscanner in English, we decided that it was high time we built a new site for them. That was all we needed to stake our claim in the Russian Internet market.
How well is Skyscanner adapted for Russian users?
Skyscanner in Russia isn’t just a translated version of the original site. It is an entirely unique project that is run collectively by a team of international developers and Russian specialists. Compared to other metasearch engines, we have the largest number of Russian and international airline companies sharing pricing data with us directly. Each and every one of our partners also accepts rubles as payment and provides customer service in Russian. A new section of the site, with savings just for Russian users, has been one of our more successful recent additions.
Where does the Russian segment fit into Skyscanner’s wider market?
Our monthly traffic exceeds 50 million unique users from all over the world, and Russia is close to the top, with its own numbers well into the millions. Plus, the service has been enjoying more popularity recently, with more than a 50% increase in Russian users from 2013 to 2014. Traffic has increased partly because of the service’s convenience and partly because of the general trend towards organizing your own travel arrangements. More and more people today prefer to plan their own trips, instead of relying on agencies and travel packages.
What was the hardest part about growing Skyscanner in Russia?
The most difficult thing had to be getting Russians to understand what ‘metasearching’ actually is. FYI, metasearching is a search system that generates results by combining and ranking results from other search engine systems. A lot of people are under the misconception that we sell airline tickets, when in reality we just find the best deals online and then direct users to our partners’ sites.
What advice would you give to other companies looking to enter the Russian market?
When companies enter the Russian market, they often use a carbon copy of the marketing strategy they employed in other countries. A common misstep is organizing contextual advertising through AdWords, and using the things that worked in AdWords in other systems. Companies translate the keywords they need and then carry over that questionable syntax into Yandex.Direct. This, of course, does not achieve much. I think people are drawn to this strategy because advertising with an unfamiliar service makes the process harder to analyze, manage, and improve on. Our experience has shown that contextual marketing is vastly more effective when tailored specifically to the search engine it is going to be featured on.
We even did a little test recently, on two different search engines, and got back categorically different results. From the day we launched operations in Russia, we were working hand-in-hand with Russian specialists who knew the ins and outs of their market. From the very start, we sought out solutions specifically designed to work in that particular market. In the end, Yandex.Direct turned out to be worth every penny, despite its seemingly high prices. It is, as of right now, our most effective advertising and promotional tool.
How does your expansion strategy in Russia differ from that of other countries?
The Russian online ecosystem is quite different from other countries, so international marketing tools must take a back seat to Russian ones. The media mix therefore diverges markedly, along with other promotional methods (by media mix we mean a comprehensive company marketing plan spanning across all available channels). For example, we cannot use the same methods that we use in other markets to optimize automatic contextual placement, so we must look elsewhere for solutions.
Another aspect unique to the Russian market at this stage is the relative ineffectiveness of mobile advertising. The opportunities for native ads are quite limited compared to what we work with elsewhere. But this isn’t to say Russia doesn’t have its own unique benefits. Our advertising campaigns on VK and the Yandex Advertising Network are the most crucial elements of our media mix, and the success we’ve already had with them completely outpaces equivalent international services.
How do you evaluate which marketing channels are the most effective? How do you then divide your marketing budget among them?
The one indicator that has been valuable to us across the board is our advertising ROI. Our goals for ROI fluctuate depending on our monthly or yearly plans, but generally speaking we strive to always maximize ROI and split up the budget among channels based on actual performance.
We utilize a variety of channels geared toward every section of the conversion funnel. The goal of the funnel’s top section lies in increasing brand recognition and building awareness among a wide audience. We approach these tasks through online ads rather than traditional media (such as television and outdoor advertising). A company’s reach using online ads is already further than with television, not to mention the improved RTB targeting and programmatic platform management that comes along with them. We also strive to not just stick with the status quo, but branch out and experiment with other methods. For instance, just last year we tested out Yandex’s contextual media advertising solutions that gave us fantastic results.
We address the bottom sections of the conversion funnel through contextual advertising and remarketing. This is where Yandex.Direct, with its Advertising Network and search functions, comes into play. Ever since the first days of Skyscanner’s entrance into the Russian market, Yandex.Direct has been one of our most crucial advertising channels. Regardless of a channel’s position in the conversion funnel, we always use different conversion attribution models. Another one of our main focuses is each customer’s lifetime value (CLV or LTV) for the media mix as a whole. This way we are able to precisely formulate our monthly goals based on ROI and turn every marketing campaign into a profitable one.
How much of your budget goes to Yandex.Direct?
When it comes to Russia, Yandex.Direct is by far our most effective tool for reaching the widest possible audience. Its importance is therefore reflected in our budget.
Thanks to Ilarion and Skyscanner for sharing their experiences with the Russian market and online advertising in Russia!