China’s Pay-per-click (PPC) Search Engines

Chinese search engines can be categorized into three tiers:

• 1st tier search engines: Baidu, Google China
• 2nd tier search engines: Yahoo China, Tencent’s Soso, Sohu’s Sogou, Netease/163.com’s Youdao
• 3rd tier search engines: Bing, others

Chinese search engines that offer Chinese pay-per-click (PPC) auction systems:

• 1st tier PPC search engines: Baidu PPC Phoenix Nest, Google Adwords
• 2nd tier PPC search engines: Tencent’s Soso PPC, Sogou PPC, Youdao PPC
• 3rd tier PPC search engines: Yahoo China, smaller PPC search engines that can be ignored

Chinese Search Engine Marketing in 2009 Revised

Baidu PPC auction systems has made major upgrades. The number one Chinese search engine Baidu,

• Launched Baidu PPC Phoenix Nest in April.
• Retired Baidu’s old PPC system and launched Baidu PPC Editor in December.
• Offers Baidu keyword research tool and Baidu Analytics to advertisers who have Baidu’s Phoenix Nest accounts.

Adwords launched a few Chinese localized advertising products in China. Google China,

• Started showing bottom Adwords ads.
• Tested China’s version of Google Adwords PPC site links (i.e. Adwords Brand Zone).

Soso PPC’s Account Structure

Tencent Search Marketing has simple account structure and do not have campaign or ad group levels. Keywords and ads are the two major layers in Soso PPC’s account structure.

A keyword consists of:

• Keyword match type (broad, phrase or exact)
• Keyword cost-per-click (CPC)

An ad consists of:

• Ad title
• Ad description
• Display URL
• Destination URL

How Soso.com Displays Pay-per-click Ads

Soso.com currently shows Tencent Search Marketing PPC ads above and on the right hand side of organic search results.

At the bottom of Soso.com’s search results pages, Google Adwords ads are shown.

Create a Tencent Soso PPC Account

Soso.com does not allow new advertisers to directly create Tencent Search Marketing account. However, you can go through one of the ad agencies which have been approved by Tencent.

Soso PPC Reports

Soso PPC offer two basic reports:

• Ad report
• Keyword report

Other Issues and Features about Soso PPC

• Soso PPC’s auction system takes click through rate (CTR) and keyword maximum cost-per-click (CPC) into account to determine ad ranking, but the effectiveness of this new ad ranking algorithm is yet to be verified.
• Soso PPC’s account interface and many features are not as thorough and complicated as Google Adwords search ad auction system or Baidu’s PPC auction system (Phoenix Nest). So optimization may tend to be mainly based on bidding.
• The default minimum bid for keywords is RMB 0.30, but many high search volume keywords’ minimum bids are over that rate.
• Only basic reports are offered for you to monitor the performance of your keywords and ads.
• No ability to set and control your account’s / ads’ daily budget.
• Ad rotation or A/B ad testing are not possible.
• Exporting and/or importing of your account (ads, keywords, CPC, match types, ad titles, ad descriptions, destination URLs) are possible through spreadsheets.
• No payment feature is available to advertisers to pay directly through Soso PPC’s system.
• Tencent’s Soso search engine has much lower Chinese search volume than Baidu and Google.

For the companies in China that already have been spending on PPC in 2007, they are currently focusing on generating sales and conversions. Branding and combining PPC strategies into overall marketing strategies have already been happening commonly in the US and many Western European countries, but will only be the next two steps for most of the companies in China.

Advertisers who want to reach online Chinese audiences should consider spending through the major China paid search platforms below:

• Baidu Search Marketing
• Google Adwords
• China Yahoo P4P

In terms of traffic, Baidu Search Marketing is the PPC search engine that delivers the highest traffic volume in almost all sectors. Google Adwords delivers the highest quality of traffic, as Google’s user base in China is of generally higher educational backgrounds.

Regarding to platforms, Adwords is of the highest user-friendliness and provides the most features for optimization. Baidu Search Marketing and Yahoo P4P provide platforms that are more basic.

• 16.8% don’t know what paid search is about and have never heard of it
• 11.3% know what paid search is about
• 9% pays great attention to the ranking of paid search ads
• 9% think paid search is high risk to privacy leak
• 9% believe the pay per click business model is sustainable
• 5.1% are able to distinguish between paid search ads and natural search results

Other concerning findings regarding the use of search engines include:

• 32% have searched on their own real names on a search engine
• 29% have used a search engine to find their own personal information

The research report is based on the survey conducted to 4500 people in metropolitan areas of Beijing, Shanghai and Shenzhen.

• Banner 48.9%
• Paid Search (PPC Advertising) 24.9%
• Classifieds 7.4%
• Text Link 7.2%
• Rich Media 2.6%
• Email 1.4%
• Others 7.4%