Chinese search engines and Baidu
In the second quarter of 2010 the total revenue of the Chinese search engine market reached RMB 2.64 billion (€285 million); this is an increase of 53.2% compared to the first quarter (source: iResearch). Don't be surprised about the number, but consider the population and territory first.
Due to recent changes in the Chinese search market (especially the news that Google is quitting China) the direct consequence is that Chinese customers will rely more and more on Baidu. Google and Baidu have formed an oligopoly for years and Baidu's dominant position will not change in the short term. Other newly launched local search engines like Soso and Sogou are struggling to grow but at present can not compete with Baidu.
Baidu is the biggest search engine in China and has a market share of 77.2% in 2009. More than 100 million web-browsers visit Baidu each day and perform 1 billion searches. Baidu can not be ignored when talking about the Chinese search market. To give you a clear insight on Baidu consider the following features:
Baidu's total revenue in 2009 was RMB 4.4 billion (€478 million) in 2009, an increase of 39.1% compared to 2008 (source: Baidu Annual Report 2009). Amongst the people using Baidu almost 40% are business decision makers who use search engines for information gathering (source: CNNIC Internet Development Report 2010).
Baidu is the biggest Chinese language search engine in the world and is targeted almost entirely at mainland China. Almost all campaign management apps, language settings and corresponding certificates are in Chinese, which means that only native speakers are able to manage campaign in Baidu.
The cost for launching a promotion campaign in Baidu is low due to currency differences. For the most popular product, online-marketing services, the cost to open an account is RMB 600 (€65) plus a pre-paid RMB 5000 (€540) media expense which for an average campaign can last up to 5 months. This adds up to a yearly costs of around €1200.
Just like with Google you can launch Baidu campaigns on paid search and display network. But Baidu also has several unique products like brand zone, hot zone, picture promotion, etc. These products have no direct counterpart in Google.
In conclusion advertising on Baidu can be challenging, but it is a good strategy for companies that want to expand their business to China and for those already operating in China who are willing to expand to reach a larger audience.
In my next post I will tell you more about the various products that Baidu offers.
* Source of picture:digitip.net. All Baidu product details are from www.baidu.com
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