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Chinese E-Commerce Watch – Branding Opportunities on Baidu

Via The Huffington Post : Singles’ Day, China’s biggest e-commerce day annually, takes place on November 11. For just one single day, Tmall (the main shopping platform under Alibaba Group), will generate sales that eclipse the entirety of US e-commerce revenue on Cyber Monday and Black Friday combined ($5.8 Billion). For example, in 2015, Tmall witnessed 91.2 billion RMB in sales, which is equivalent to $14.3 billion USD, breaking the previous record (also owned by Tmall) only halfway through the day. In total, 2016 Tmall singles day sales beat the previous ecommerce record by 59.7% and beat Black Friday/Cyber Monday revenue by 146%.

The massive ecommerce activity on Singles’ Day is not limited to Tmall alone as the online shopping heat expands across the entire Chinese ecommerce space. This presents a massive opportunity for ecommerce advertisers considering expansion into China.

Baidu, the No.1 search engine in China, is an inseparable part of the e-commerce ecosystem. Last year, Merkle announced its official partnership with Baidu, which means Merkle is Baidu’s first US-headquartered reseller for brands seeking growth in China (learn more about Merkle & Baidu partnership here. In addition to its basic search engine function, it offers a wide range of services including Baidu Map, Baidu Cloud (a cloud storage service), Baidu Encyclopedia, Baidu Experience, MP3 Search, travel-booking, and so on.

As part of the Merkle search team, we are most interested in Baidu’s primary advertising product, similar to Google AdWords, which is called Baidu Tuiguang (which means “promoting” or “advertising” in Chinese). This platform allows advertisers to show their ads on Baidu search results pages and on other websites that belong to Baidu Union (similar to Google Display Network). If you have experience with both Google AdWords and Baidu Tuiguang, you’ll find them very similar in terms of keyword creation, campaign management, and bidding adjustments. There are even additional targeting features and products that mirror previous/current Google betas. For example, our team is testing a product called “Brand Industry Bidding” that functions similarly to Google’s Target Outranking Share Bidding product, by enabling advertisers to bid on relevant domains as opposed to keywords (more to come in a separate blog post). However, the disappointment is that Baidu’s tools are all in Chinese, which poses a big challenge for non-Chinese speakers. That’s why we wanted to share what we learned about Baidu Tuiguang here, so that anyone interested in using Baidu to promote their brands won’t be deterred by the language barrier.

An earlier report from Boston Consulting Group shows that Chinese consumers care more about brands than Westerners do, which means getting their brand names in front of potential customers is even more crucial for advertisers extending their businesses in China. To better serve advertisers to achieve that, Baidu offers different solutions for businesses at different scales. We’d like to introduce you to the following three types of brand ads that are often used by advertisers on Baidu Tuiguang.

1. Brand Zone

This type of brand ad has a similar look as RAIS (Rich Ads in Search) on Bing. They show in the top position on SERP (search engine results page), including multiple links to the site. Compared to RAIS, Brand Zone owns a bigger space on SERP so that they are more likely to catch people’s eyes and get a higher CTR, a result proven out through testing by our Baidu SEM team. However, Brand Zone runs on a CPT (cost per time) model, which means the ads are purchased on a monthly basis. According to Baidu, the price of the ads depends on the estimated traffic of brand keywords and the industry CPM. Advertisers will have to reach out to Baidu representatives for more specific pricing information, but one thing for sure is that Brand Zone is less affordable for small brands.

Brand Zone ads are shown in different forms, including standard and advanced. For advanced forms, there are seven types available, with some types featuring videos and some only having static images (click here to view all the options on Baidu’s own site). Overall, Brand Zone presents a brand in a very polished way.

2. Brand Business Card

Compared to Brand Zone, this type of brand ads is a better fit for small, regional businesses. Despite a smaller space on SERP, Brand Business Card requires a smaller budget, which is 2,500 RMB for 3 months. There are other limitations, though. Each account can only buy one brand keyword, and the ads are only allowed to reach one region, which in most cases is one province or the capital city of a province.

3. Brand Starting Line

Similar to Brand Business Card, this type of ad fits small businesses well. These two types have almost the same appearance. The main differences are that, for Brand Starting Line, advertisers have to buy the space on a monthly basis and pay prices calculated by Baidu’s system (which could mean more expensive). In return, advertisers are allowed buy more than 20 brand keywords and reach up to 5 regions.

In addition to these three types of product offerings, Baidu offers many other ways for brands to increase their exposure to consumers and build brand reputation. Although they all require extra budget in paid search ads, brands look at them as fast and effective ways to reach their audience. They are worth considering for international brands trying to enter the Chinese market.

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