Regional Update: Search in the CEE

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When the invitation to speak on behalf of SEMPO at the ADMAZ e-commerce conference in Prague arrived, my colleagues asked, “How big can the Czech market be?” I said, “I don't know, but I am about to find out!” I am happy to report that while the market is certainly smaller than most countries, Prague is a burgeoning hub of technology and interactive marketing for a much larger region, frequently referred to as Central and Eastern Europe (CEE), representing roughly 10-20 countries (depending upon who you speak to) and about as many languages.

“The advantage to speaking a language common to only 10 million people, is realizing early on that it is wise to learn other languages to grow,” said Matej Novak, the Prague-based SEO director at Ataxo, the largest interactive marketing agency in the Czech Republic, with offices in Poland and Slovakia as well.

It is precisely this attitude that makes Prague a likely capital for technology development and online marketing, as evidenced by the CrunchGear/TechCrunch Prague meeting I was fortunate enough to attend on May 23.

Having been to hundreds of similar events in the US, there was a refreshing energy among the 200 participants gathered to demo new technology, discuss developer salary data, and push the tech envelope in the CEE.

Pavel Dolezal, cofounder of Ataxo with Petr Dejm, did just that by providing a preview of Webeena, a WYSIWYG template for content creation critical to search engine marketing and social media. As a follow up, a blog in English, the event's lingua franca, was set up. According to organizers John Biggs (http://www.crunchgear.com/) and Jack DeNeut (Nelso.com), 40% of the audience was not Czech, suggesting that the city just might claim the tech equivalent to its 14th century title as the capital of the Holy Roman Empire.

Firms operating in this region have similarly imperial ambitions. Martin Kovac and Jan Sifra of E-Target, a contextual player serving the Czech Republic, Hungary, Romania, Slovakia, Bulgaria, Croatia and Serbia, discussed this expansion over dinner. In half-jest, I suggested that a move to Turkey would be a chess move of Byzantine aspirations. To this, the table nodded, and said that Turkey is very much on the radar for CEE-based firms. Much of the Czech Republic's commercial growth since the 1989 Velvet revolution is due to European Union investment in infrastructure. All eyes are now on Turkey to see if that country will take a similar route over the next decade. 

While CEE-based firms successfully expand to markets further north, south and east, American firms struggle. The most frequent mistake is to treat the region as a homogenous entity, forgetting that language, search behavior and purchase patterns vary widely. And of course, there is a strong loyalty to local players. One of the more interesting points, brought up by Novak of Ataxo, is that the Polish make more purchases on Allegro, a Polish-based online auction, than they do on online e-shops. Even Google faces an uphill battle; the almighty US-based search engine trails Seznam in the Czech Republic by a wide margin.

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