iProspect, a search-engine marketing agency under Isobar, studied the behaviour of visitors to ad-supported sites. It found that nearly as many netizens who click on banner ads will conduct searches for brands associated with the ad, and nearly half of all audiences on an ad-supported site will eventually perform a search that is relevant to the ad they saw.

According to the agency, the study aims to highlight the connection between display ads and search engine marketing, based on a pool of 1,575 American internet users.

“This new iProspect study goes beyond previous studies about the importance of integrating the offline and online marketing mix,” said Antony Yiu, search director, wwwins Consulting Hong Kong and iProspect Hong Kong. “Marketers should shed the old dotcom era mentality of using only display ads for their online campaigns and instead utilise a more synergistic approach of integrating both search and display ads to earn exponential returns on their advertising investment.”

The survey further found that 31 per cent of netizens respond to display ads by clicking on them, compared to the 27 per cent who respond by conducting a search for the brand, product or company.

Twenty-one per cent instead choose to type the company’s URL into their browser and nine per cent find relevant information from social media sites.

According to iProspect, a total of 52 per cent of internet users actively respond to display ads.

Additionally, the survey found that 33 per cent of respondents to an online display ad go on to purchase from a company with which they are familiar, compared to the 14 per cent who learn about a company for the first time from a digital display ad.

Wow, that’s a number. Let’s take this statement to try to calculate what this means in terms of search engine marketing budgets in Asia:

1. To start with we need to set a few numbers. As we don’t exactly know we have to assume:

• Average click-through-rate (CTR): 1.5%
• Average cost-per-click (CPC): 0.20 USD

2. Amount of Internet users:

I did a small table because I wanted to break the total amount of Internet users in Asia down to single markets. For this I used the statistics of the World Factbook.

As you can see, the amount of Internet users I came up with differs from the amount in the initial statement. So, in order to keep relations, we also have to adjust the amount of total searches.

450 million Internet users = 20 billion searches
525 million Internet users = 23 billion searches

3. Calculation:

• 23 billion searches x CTR of 1,5% x 0.20 USD CPC x 12 months =
  828 million USD per year click budget in Asia spent

Is that so? Let’s make a test backwards to put these 828 millions into relation:

• Baidu alone had a revenue of 227 million USD in 2007 (source: wikipedia), which mainly comes from online advertising. For 2008: expected growth of 20% = 272 Mio. USD
• Baidu has a market share of appr. 63% in China, i.e. the Chinese market for keyword advertising is 431 million USD (227 million / 63% x 100%).
• And, as the above table shows, China’s Internet users make up for about 48% of Asian Internet users.
• So: 431 million USD / 48% x 100% = 898 million USD

Well, that’s not the same but rather close. We assumed a few figures such as

• CTR and CPC
• CTR could be actually much higher, due to Baidu’s advertising display strategy
• Baidu’s revenue would probably not totally come from keyword advertising

Anyway, there are good reasons to say that the market size for keyword advertising in Asia is currently somewhere between 800 and 900 million USD.

4. Finally, we can again break the Asian market size for search engine marketing down to single Asian markets:

5. Here is what other resources say:

• In Q3/2008, market size of keyword advertising increased by 19.3 per cent quarterly to 1.464 billion yuan, accounting for 43.8 per cent of the Internet advertising market. (lexisnexis)
• Search engine advertising accounted for 27.3 percent of the market in terms of value, up 4.3 percentage points over the previous year, and it was predicted to hit 30 percent this year, the report said. (highbeam)

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.

a) 75% of Internet users use search engines to find information about products and services they are interested in. This is great, because these people already have some interest in your product category. You will save a lot of marketing budget by avoiding divergence losses.

But important: When people search for anything that is related to you, you MUST be there. Now it’s your task to convince these searchers that your offer is the best. This can be done with good and targeted keyword advertising texts.

b)  Cross-channel user behaviour: This means that your target group sees your offline advertising on TV, on outdoor ads, in magazines, etc. But eventually, after a few touch points with your brand, they will go to the Internet and ask the search engine about you.

Typical search phrases are:

• experiences with [your brand]
• satisfaction with [your brand]
• compare [your brand]
• negatives of [your brand]

Or they simply type in your brand name and see what pops up. Now, your keyword advertising MUST be there. On position one. So, you need to have all kinds of keywords which are related to your product names, brand, company name, etc. in your keyword advertising campaign.

Read more about China Search Engine Marketing here or contact us directly.

• A lot of education is necessary, as experiences and understanding of search engine marketing is pretty low. Many Chinese customers don’t understand the difference between SEO and SEM yet. The value of qualified traffic is not appreciated yet, a conversion rate either unknown or often unimportant. Quantity (i.e. website visitors) counts, not matter if relevant or not.
• Chinese SEO agencies promise things that can’t be kept, customers believe it. Often heard potential clients say: “your competitor promised me to be among the top 5 in Google. If you don’t, you’re out…”
• Quality SEO has its price, also from Chinese SEO agencies. For quality SEO in China, experts are required. They are not cheap, but hard to find. Labor costs in this area are far above average.
• SEO is cheap because it is just about adding some things here and there. In fact, good SEO is a strategic approach and has to be planned and implemented thoroughly.
• Long-tail SEO (reverse search) is hardly understood. Customers want to be on position no. 1 with their most competitive keyword. Convincing them that long-tail SEO can deliver much quicker and more converting results is not understood or not wanted.

Before selecting the right online marketing channel there are a some strategic questions to answer. Target group information should be available, the general marketing strategy should be considered and how digital advertising fits into there. Interaction and integration with other sales channels in a company should be looked at and the goals of the online marketing campaigns itself.

Online Marketing Channels:

Search engine marketing / keyword advertising / SEM
Search engine optimization / SEO
Affiliate marketing
E-mail marketing
Banner advertising
Blog marketing

The banner on the right side (no.2) has a size of 175×300px and is animated gif. The whole ad covers almost 2/3 of my laptop screen. Under the ad I can just see one and a half other search results.

So what’s the purpose of this ad? I mean, in search engines, when you search for a brand, you will finally definitely land on the brand’s homepage. Ok, brand building for the advertiser is certainly one goal but do you really need to do it for your brand keywords? In terms of generating new revenue it can’t have thus big an effect, as the searches for brands are comparatively low in comparison to the total amount of search inquiries. Another reason could be –due to the large size- to press competitors who are also listed for the brand keyword out of the screen…hmm. What do you think?

So far, there are only two advertiser who take part in the brand advertising program: Gome (国美), the largest consumer electronics store and China Construction Bank (中国建设银行), one of the top 4 banks in China. We called Baidu and asked for prices, purpose and how it works, but the sales agents in Shanghai didn’t even know this advertising program…

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