According to local reports, the Search Engine Marketing Standard and Regulation is being circulated to drive out disreputable companies who tarnish the reputation of SEM in China and help to steer the healthy advancement of SEM.

Among the goals of the organisations involved include a wider education of the benefits of SEM for businesses looking to become involved with the medium, including an appropriate way to engage in it.

The regulations come one year after Baidu found itself embroiled in several SEM controversies, including accusations of blocking searches containing words associated with the melamine milk scandal as well as being found to have accepted money from fraudulent medical companies to include their websites in Baidu’s top search positions.

In response to the latter, Baidu launched an ad platform that separates its list of paid links from its general search listings.

Disgruntled companies unhappy with their dealings with Baidu further pledged to launch a mass lawsuit against the search engine in December. Each of these hurdles contributed to Baidu’s revenue drop that same month.

According to Barney Loehnis, head of Isobar Asia-Pacific, which is engaged in a search engine optimisation partnership with Baidu, the SEM landscape in China has become increasingly more focused on transparency following the incidents Baidu faced in 2008 as well as pressure from music and video providers looking to preserve copyright entitlements.

In the market, rival Google has worked to make its operations transparent, and Loehnis points out that the regulations are an attempt by Baidu to prove that it is also taking the matter seriously.

“Baidu has traditionally not been as transparent as others in showing what’s a paid result and what’s not, and in that case some consumers wouldn’t be aware of the paid or not paid and the result is that Baidu has fallen at one end of the spectrum where it’s not always known where they’re making money and not making money,” Loehnis said. “Any group operating in transparency has got to be good from a client’s point of view and I would interpret Baidu’s action as a step in the right direction.

“However, some Chinese companies do claim the moral high ground for more political reasons, so I think so it’s up to Baidu which way it falls and follow through to maintain these guidelines,” he continued.

Separately, Baidu announced the launch of a marketing promotion that will see it give Rmb 100 million (US$14.6 million) of display search ads to companies. The offer aims to promote its Baidu Search Marketing Services platform and gives participating companies a 60-day image display ad worth up to Rmb 10,000 ($1,464).

According to reports, the promotion was launched to help broaden Baidu’s image as an ad-sales provider.

Source: http://www.media.asia/newsarticle/2009_09/Baidu-helps-to-launch-SEM-regulatory-guide/37292

In short the relaunch, started on April 20th, now offers advanced account setup possibilities getting closer to Google’s account management standard:

• Renamed from Baidu Bidding (百度竞价) to Baidu Marketing (百度推广)
• Account structure: Account – Campaign – Ad Group – Keyword and Ad
• Daily budget setup
• Keyword matching
• Negative keyword settings
• Text ad rotation
• Geo targeting
• Day parting
• Keyword suggestion tool and bid estimator
• Bulk import and export
• IP exclusion
• Ad preview

Useful links:

http://e.baidu.com/keyword/

So far, this information resulted from some studies and personal observations and discussions. Now, this news: “Alibaba pulls ads from ‘low-quality’ Baidu“.

According to this press release, Alibaba ended its search engine advertising contract with Baidu due to unsatisfying marketing results. Alibaba says that they get too much low-quality traffic from Baidu which doesn’t convert into business. Besides, click fraud rates are on the rise.

So, again, consider this when doing or planning Baidu SEM campaigns:

a) Start your Baidu SEM campaign on a low level, include a test phase to figure out what works and what doesn’t.

b) You can still get a lot of eyeballs through Baidu, so it depends on your online marketing strategy: awareness vs. conversion. What counts more?

c) Clear and good ad text copywriting. Make it clear what the user will get when he clicks on the text ad.

d) Perfect landing page. No confusion or user losses allowed here.

e) Tracking and daily campaign optimization

Anyway, the last days I always had my digicam lying close to the TV and also brought it when I was on the street in Taipei. In the following you will find some photos I shot; please ignore the poor quality, the keywords are normally only shown for a second or two, so getting the right moment and also holding the camera in the right position was not all that easy.

No matter, what the results will be. There is already a winner: Yahoo. As Yahoo is the dominating search engine in Taiwan many TV spots show a copy of the Yahoo search engine slot in the spot! That’s real good advertising for their brand. And even, if there is a white-label search engine slot in the spot, the people are drawn to the search engine – which is Yahoo (they have a market share of appr. 70%).

Would be interesting how much Yahoo pays for these positions and if they pay for all of them or just for some and others are just adopters.

Here are some examples:

Product:Airwaves
Keyword: 點子
SERP: position 1
Yahoo seems to be co-brand as also strong presence on the landing page


Product: Insurance
Keyword: 愛無憂 = company name


Another example is LG with its cell phone ‘Secret’. In the TV spot there is a search engine slot filled with the keywrod ‘’secret’. If you enter ’secret’ into tw.yahoo.com and click on the LG ad you will not find a subpage on the LG domain (although in the text ad the target domain shows tw.lge.com) but you will be redirected to a LG sponsored blog in a blog network (http://www.wretch.cc/blog/lgsecretclub).

Here are some more shots:

• Low divergence-losses, the searcher already knows what he wants. Desire doesn’t need to be created, the user already has it. The result is that the budget can be allocated much more exactly and thus return on investment is increased.
• Campaign reports are very detailed, conversions can be broken down to a single keyword. It is always very clear how much you earn with the PPC campaign.
• No need to predefine a marketing budget at the beginning of the year. As long as you know your product margin, your keywords and your conversion rate, you can use a floating budget because you know that you will earn with every conversion.

Possible ways for brand marketers to adopt search

But also for brand marketers, search engines are an important advertising channel. Many people who get aware of your advertising campaigns on TV, in magazines, radio or outdoor will sooner or later go to the search engines to search either your product or company. Or they will use search terms that are related to your business and do a general search and thus also search for your competitors. They will compare their findings as that’s especially convenient with search engines.

So, how can search engines be used by brand marketers for awareness creation?

• The user has to find you! That means, you have to book your brand/product keywords and all keywords that are related to you and your products and the user might associate you with.
• You should use the wording from the offline campaigns to give the user a familiar feeling and still have a click-animating text ad.
• You must have a great landing page which continues the story of the campaign and goes even further to more interaction with your brand and product and optimally results in a conversion, so you can use this contact again in the future, e.g. for newsletter campaigns or cross-selling.
• You have to find the best position in the search engine result pages (SERPs). That is not necessarily the top position.
• You have to differentiate from competitors because the competitor is only one click away.

By Brian Asmus, Special to the China Post
Stefan Schneider, Managing Director of 3digitalminds, spoke to the American Chamber of Commerce Marketing & Distribution Committee June 12 during a luncheon held at the Howard Plaza Hotel in Taipei. Schneider pointed out that Internet Penetration in Taiwan, Japan, Hong Kong and South Korea is approximately 70 percent, while it is only 12 percent in China and 5 percent in India.In China, Schneider explained, 90 percent of consumers do research online but purchase offline when shopping for mobile phones. Similarly, 70 percent do so for purchases of consumer electronics and 50 percent each for financial and automotive.

Chinese consumers begin by searching e-commerce sites such as eBay and taobao, said Schneider, before going to search engines like Google and Baidu. Finally, they may look to word-of-mouth sources such as BBS and blogs.

Schneider recommended that companies that wish to market online first conduct Web-site analysis, including keyword research, structure, linking and duplicate content to optimize the Web site.

Christopher Fay, Co-Chairman of the AmCham Marketing & Distribution Committee and Stefan Schneider, 3digitalminds

In Phase 2, he suggested that they look at Web-site enlargement, adding fresh content, developing blogs and setting up forums. This involves linkbait and reputation buildup, and requires constant tracking and optimization, he said.

According to Schneider blogs are “everybody’s own newspaper.” In South Korea, he said, 92 percent of Internet users read blogs with 72 percent writing them. In China, the figures are 88 percent and 70 percent; in Taiwan, there are 86 percent and 71 percent and; in Japan, they are 84 percent and 47 percent.

When it comes to topics, said Schneider, 64 percent write about their private lives, and 34 percent write their opinion about brands and products.

“How should companies use blogs to further their business objectives?” asked Schneider. “These,” he said, “can be used to advertise, establish relationships within your company’s niche and market products.”

There are several important dos and don’ts when setting up blogs, he stressed. “The consumer is smarter than you think; alternative marketing tactics must be genuine and, in today’s world, transparent.” That means companies should forget about setting up fake blogs. “You will always be found out,” said Schneider.

Blogs, he added, should not contradict, but rather explain the company, its products and services. “It has to live the concept,” emphasized Schneider. “That is why blogs are not suitable for every kind of business.”

Finally, Schneider examined branded communities. The purpose of branded communities,” he said, “is to engage in a conversation with stakeholders and customers.
This enhances product development, while enabling designers to hear consumer voices, particularly creative consumers, while develop brand ambassadors, fans and influencers.

“These individuals,” he continued, “create trust around a brand for new site visitors by the quality of the comments that they make. They act like a host rather than a policeman.”

The incentive is to propel mouth-to-mouth marketing. Schneider cited the Dell Ideastorm campaign by way of an example. “The target group was its customers. Dell executives wanted to come up with new idea. The branded community ended up delivering 8,000 suggestions, 600,000 votes and 64,000 comments.”

Although the procedure looks pretty easy at the first glimpse, the detailed campaign management is essential for a well-performing search engine marketing campaign. Detailed campaign management includes continuous tracking, monitoring and optimization of the campaigns.

But why is a PPC in China so important?

In China, Baidu is the local search engine and has the biggest market share. They can claim 60% and more with Google being second with roughly 20%. But Baidu’s pay-per-click campaigns and search engine result pages (SERPs) work a little different: All keyword advertising placements will be listed before the index search results. So, professional keyword advertising is a must to be listed in Baidu.

That’s why the selection of a local SEM agency who understands the market and the Chinese search engines is absolutely mandatory for a successful PPC campaign in China.

To ensure high quality of our managed Chinese keyword advertising campaigns we use sophisticated tracking and campaign management software. Besides we are experienced in handling large budgets based on conversions and achieving sales targets.

Glossary terms:

SEM: Short form of China search engine marketing. Synonym for pay-per-click (PPC), keyword advertising or paid search. The meaning is to buy a position in the search engine result pages by bidding for click prices.

ROI: Short form of return-on-investment and a key figure to measure marketing expenses. Let’s you know if a search engine campaign was successful and to which degree.

1. Comparing market share and popularity of Google and Baidu in China

Throughout China, the market share of Google and Baidu has been more or less constant in the last few years apart from some minor shiftings in percentage from year to year. The market shares of 2007 don’t really offer rocking news as well, as you can see in the following graph.

But as more and more information about the Chinese search engine market become available, these numbers can be analyzed more in detail. Especially if broken down to certain areas or provinces of China the market shares of the two search engines vary heavily.

CNNIC reports that they compared market shares in different regions: North, Northeast, East, South, Central, Northwest and Southwest China, involving 3 first-class cities, 7 second-class cities, and 14 third-class cities.

The statistics indicated that Baidu.com has a rising trend as the city level falls, while google.com goes the opposite. The priority ratio for Baidu.com in cities of first, second and third class respectively: 67.33%, 73.35%, 83.82% while that for google.com: 22.11%, 14.78%, 4.99%.

The report also mentions that baidu.com and google.com drew in the priority market competition for high end users characterized by “non-student users aged 25 and above, receiving Bachelor’s Degree and above, having a monthly income of over 3,000 yuan”, 47.72% of whom selected baidu.com as first choice while 42.32% chose google.com.

2. Comparing quality of search results from Baidu and Google

Intelliconsulting, a Chinese research company, conducted a survey among search engine users and compared the search results of Google and Baidu. The overall result is that the search result satisfaction among Google users (48.2%) is higher than among Baidu users (39.8%).

If you take a closer look at the graph you can clearly find out the following facts:

• The better educated users are, the more they rely on Google.
• The older they are (and the more disposable income they have), the more they use Google.
• There is no difference among female and male test users.

More findings were:

• The more a user users search engines, the more he likes Google.
• Negative points for Google are the instability of Google’s website, having no page-caching and no free MP3 and other media search functionality.
• Negative points for Baidu are that search results are mixed with paid search results and that no content from Chinese pages abroad is included. That search results are filtered according to governmental requirements is a negative factor as well, according to the study.

Well, what do you think? Two independent researches (CNNIC and Intelliconsulting) come to almost the same conclusion. That’s impressing, as a little unusual for China.

3. Baidu Keyword Advertising (PPC)

How Adwords, Google’s paid search program, works is pretty much known I suppose, so I don’t want to go into detail too much here.

The screenshot below is from google.cn and the keyword is 汽车(car). You can see that there are several ads, one in the highlighted area above the organic search results.

Here is a screenshot from baidu’s search results for the keyword 信用卡(creditcard).

So let me explain the differences to Google:

1. The paid search and the organic results are not clearly divided. You will only notice the difference by the small gray underlined term next to the displayed URL. 推广 means it is paid search, 百度快照 means organic search result.
2. All paid search results will be placed before the organic search results. That means, if 20 customers buy the same keyword, the first organic search result will be found on page three. The price is based on a bidding process. Not only the CPC but quality factors like landing page evaluation will influence the position as well.
3. The ads in the right column are no CPC-based ads. They are fix-priced for one whole year. Position no. 1 to no.3 have the same price and rotate among each other. Position no. 4 to no.10 are cheaper than no.1 to no.3 and rotate as well. If the position is already booked, you have to reserve and wait respectively until it will become free. There is no possibility to get out of the contract before this one year ends.
4. Once a while you might notice one or two ads with a blue banner on position one and/or two. It looks similar to Google’s blue banner, but in fact it has a totally different meaning: if you search for a keyword and there are no paid results for that keyword because no advertiser has booked it, Baidu will display ads that are similar to the keyword you entered. Example: you enter ‘keyword advertising’ but there are no paid results, so baidu will show two ads for the keyword ‘advertising’ with a blue background.

Last but not least, some examples prices for the right column (as of 2007/11/15):

手机 (cell phone) 1.056.700 RMB/year
广告 (marketing) 13.000 RMB/year
汽车 (car) 117.600 RMB/year
美容 (cosmetics) 193.600 RMB/year
电脑 (computer) 16.400RMB/year