A conference called Internet CEE took place in Warsaw in the end of November. It was organized by Gemius, a leading internet research agency in the region, and it turned out to be better than I had expected. First, because the speakers presented very interesting data about their markets – data, which are very difficult to get, as I know from my own experience. And second, because it was a great networking opportunity – there were people from the whole CEE, from Croatia to Estonia and from the Czech Republic to Russia. So I think it's a good idea to start blogging about search in the Czech Republic, Slovakia and Poland (the “home” markets of our agency) with a few impressions from the conference and a few notes about the region.

There Is No CEE Region

First, if you intended to expand your search marketing (or any other kind of on-line activities) into Central and Eastern Europe, forget about it. CEE is just a construct, not a homogeneous region. CEE made up of about 20 very different countries with 20 different languages. And in terms of internet or search marketing, it's 20 very different markets. They differ in all aspects, e.g.:

• Internet penetration, which goes from 19% in Romania through 36% in Poland to more than 60% in Slovenia.
• Shopping habits – while people in almost all these countries prefer e-shops to on-line auctions, in Poland, on the contrary, many more people buy items on Allegro (polish eBay) than in e-shops. (The figures are from Chris Modzelewski's presentation at the conference.)
• Search engine market share – Google has got its “standard market share” of about 90% in most of these countries, however, it has only a 30% share in the Czech Republic, lagging far behind the dominant local search engine, Seznam, which has a 60% share. (You will find a similar situation in Russia and Estonia.)
• You will see many other local players who are stronger than global brands on the local markets. I've already mentioned the Czech search engine Seznam and the Polish auction site Allegro; then there are Russian search engine Yandex, Polish community site GoldenLine, Slovakian PPC advertising system eTarget, and many more. These companies used the advantage of being first-comers in their markets, as global players were very often not interested in localizing their services for smaller markets.

As I see it, trying to enter CEE markets with a one-size-fits-all approach reduces your chances to succeed. Instead, it's necessary to see Central and Eastern Europe as a very heterogeneous landscape and assess the opportunities and challenges separately for each individual country.

Internet in CEE – Terra Incognita

My second strong impression from the conference was: there is not much trustworthy and comparable data available about the region. In most of the countries, the methodologies of market research are not unified, so different sources come up with very different figures. I saw this when I was trying to collect data for my presentation about search marketing in Poland, the Czech Republic, and Slovakia. To give you an example, here is how different sources estimate internet penetration:

• Eurostat, reports that in Slovakia there was 43% of regular internet users in the population aged 16–74 in 2006. The same source states 36% penetration in Czech Republic, 34% in Poland.
• According to Chris Modzelewski, who presented data from Gemius in the conference, internet penetration is 42% in Slovakia, 44% in Czech Republic and 36% in Poland.
• The CIA World Factbook tells us that in 2006 41.4% of all people in Slovakia had internet connection, 34.6% in Czech Republic and 28.6% in Poland.
• According to GfK, the internet penetration is 38% in Slovakia, 37% in Czech Republic and 31% in Poland.
• TNS reports that 37% of people in Slovakia actively use internet.

Even if we accept that these differences are OK, because the researches used different methodologies, the trends should still be basically the same. However, according to GfK, it seems internet connection penetration in the Czech Republic almost matches the one in Slovakia, while, according to CIA World Factbook and Eurostat, it is supposed to be significantly lower than in Slovakia, and according to Gemius, it is supposed to be slightly higher than in Slovakia.

This is just one example, but it illustrates the state of knowledge we have. And I have to add, this is in fact not a really telling example, because internet penetration is a field where there are at least some data available and these data come from more or less comparable sources. However, if we have a look at on-line advertising spending or on-line purchases, the situation is much worse: there are no reliable estimates at all on some countries, and where the data are available, they are not comparable anyway, because each country uses a completely different methodology for making the estimates. No need to say that there is even less information about the volume of money spent on search marketing.

Gemius is working on making the data for individual countries comparable, and I think that they are on the right way, but I'm afraid it will take at least two more years before we get reliable data on the amount of money in the industry. But, as one speaker said during the conference – better to have inexact data than an empty gap.

Well, I think this is enough for the beginning, next time I'm going to bring some more detailed information about search in the Czech Republic, so stay tuned and please leave comments about what you are most interested in.