China Marketing Blog

Baidu's May 2016 Ad Format Changes - How Will It Affect Advertisers?

Tait Lawton — Fri, 05/27/2016 - 12:55

After Baidu’s recent troubles, they’ve updated their ad format in a pretty major way.

There used to be many more ad spots, and now there’s only 4. All 4 spots are up top, and no ads are shown in the right-side bar.

baidu_may_2016_search_results_page.png

The old ones used to look like this:

old-baidu-serps.png

Changes are similar on mobile, although mobile search results were less cluttered to begin with.

mobile-baidu-new-search-results-2016.png

 

How will this affect pay per click advertising on Baidu?

Off the top of our head, this is what we see coming…

1) Prices for the top spots should increase, and some advertisers will be pushed out.

Most likely, those with lower budgets for a set of terms will find that they can’t get into the top spots any longer.

2) Quality score changes may be coming…

Baidu says they’ll continue to improve usability, and focus on presenting more quality ads to searchers, but we haven’t seen Baidu embrace quality score to the extent that Google has.

3) For the advertisers that do make it into the top spots, they should see a higher click through rate.

4) More traffic for organic search results!

There’s more space up top for organic search results, which is a good thing.

But, that being said, Baidu’s own platforms will still take up a disproportionate amount of space on the search results pages.

5) The client + agency + reseller game changes?

Let’s think this through. Imagine you’re looking for an agency to help you with Baidu advertising in China.

In China, the chain looks like this:

  1. Search engines & other platforms.
  2. Resellers - They should be loyal to search engines, sell more ads.
  3. Agencies - They should be loyal to advertisers, improve results.
  4. Advertisers

If that agency has one client in the niche, it’s in their best interest to lower CPC to increase the ad spend of that one client.

But if the agency has 5 clients in the niche, it may be in their best interest to play off each client against each other, increasing cost per click to the amount each client will pay. This is more likely now, since there are few enough ad spots that may make it possible for a certain agency to dominate certain niches.

So here’s some questions you might ask your potential agency partner:

  1. Do you currently promote other competitors of ours?
  2. How could we motivate you to NOT work with any of our direct competitors?

6) It’s more important than ever to have excellent landing pages.

Regardless of quality score, advertisers need to make the value of those visits high enough that they can afford the CPCs to get into the limited ad spots.

 

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Comments

Following up on my own post, I should've mentioned that the fewer paid search results will also make it easier for single companies to dominate some niches. Especially large companies composed of multiple sub-groups.

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