Baidu Sets Its Sights On The Global Market

Baidu2Chinese search engine Baidu is one of Google’s biggest competitors. The company recently bought China’s largest Android app distributor, 91 Wireless, for $1.9 billion and launched its own smart TV. And it is reportedly developing a wearable computing product, a la Google Glass.

Baidu reported $1.2 billion in revenues for this year’s second quarter, representing a 38.6% increase from the same period in 2012. AdExchanger spoke to Yvonne Zhu, channel director of Baidu’s overseas department, and Johnny Zhu, VP of Charm Communications, a performance marketing agency that Baidu appointed as a partner to promote its services across Europe.

Johnny helped translate Yvonne’s comments to English in the below interview.

AdExchanger: How would you describe Baidu in comparison to Google?

JOHNNY ZHU: Some of Baidu’s products are similar to Google like our paid search ads and we have a display network similar to Google, but with more ad formats. We offer ads on top of the natural search results that are a combination of images, text and even video. We also have a mobile ad platform for mobile search and affiliated display ads. Baidu also owns 91 Wireless, the biggest Android app distributor in China.

What’s your strategy for overseas markets? What percentage of your business is international?

JZ: Baidu launched its international agency program two years ago. More European and North American companies are showing interest in China. They see the potential of the Chinese audience and their buying power. Some of the international companies have landing pages in traditional Chinese, but some advertisers don’t have websites in Chinese, only English. The conversion rate [of an English-only landing page] is a little lower than a landing page in Chinese and companies are looking into using Chinese on their pages.

YVONNE ZHU: More than 90% of our revenue comes from China and 10% from global visitors. Our mission is to become a household name outside of China by 2020 and we already have many partners working with us.

What’s your pricing model?

JZ: The main pricing model is cost-per-click for search ads and display networks but we also offer a CPM [cost-per-impression] option within the display network. For some cases, we will offer a cost-per-acquisition model but the major pricing models are CPC and CPM.

How do you guard against fraudulent practices for boosting search listings or other tactics?

JZ: We have several strategies to emphasize the ad’s credibility. We have a verification process with an icon to let the consumer know this advertiser has been verified by Baidu. To verify the advertiser we check the advertiser’s business license and other documents needed for specific industries. If people click the ad and something is wrong, we try to make sure the advertisers provide their contact info. You can see how many months an advertiser has been on Baidu. We also let customers, after they buy from the advertiser, write reviews about the ads and Baidu also lets the advertiser give feedback [on the comments.]

What’s your approach to mobile ads?

JZ: We see people searching on mobile more and more. A few years ago over 95% of people visited sites from PCs and mobile was really small. Now more than 10% of users are clicking on the ads through mobile phones. Advertisers are now more focused on creating landing pages for mobile users. Baidu has different ad formats for mobile with shorter descriptions to leave more room for the ads. Baidu also lets advertisers create a separate destination URL for mobile and for the desktop to provide the best user experience.

What kind of ad targeting capabilities do you offer?

JZ: For search ads, you can target by things like region, province or hours in a day, or days per week. Say I wanted to show my ads during working hours, so you can select those hours and bid on different frequencies. Or say I wanted high CPCs in the morning and low CPCs in the afternoon, there are options for that, too.

Some of the targeting is similar to Google. For example, Baidu also does contextual keyword targeting. Baidu also offers site targeting. For example, if an advertiser wants to target lifestyle sites, you can tell Baidu to only show your ads on specific sites. For retargeting, after people have visited your site, you can identify the pages they visited and show ads that relate to those pages. For mobile advertising, you can also target by devices [for example, whether it’s] an iOS, Android or Samsung Galaxy S3 or S4. That’s helpful especially when devices reflect the background of the person.

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