Clean up of ad business to improve Baidu's user experience

Baidu has been ordered to clean up its ad business and reduce the number of ads it serves following recent scandals; the Chinese search giant was criticised for selling listings to bidders without adequately checking the veracity of the business or their products. Despite lowering its revenue forecast in the wake of the events, the clean up is expected to benefit marketers by creating a better user experience, making it easier to find information and putting greater emphasis on organic results. Marketers are expected to pay higher premiums for top positions in paid results for better engagement, and the transparency and rules Baidu has introduced are viewed as positive for advertisers targeting specific audiences.

Baidu this month lowered forecasts for its ad revenues as it deals with the repercussions of a series of scandals around its advertising business.

The first was an issue around medical forums and the way access was being sold to private companies. Not long after Baidu came under fire for its search ads listings, which was blamed for the death of a student that underwent controversial cancer treatment after seeing an ad. The Chinese search giant was ordered to reduce the number of ads it served.

But what will this mean for advertisers in China if the dominant search platform has been cleaned-up?

A better user experience

Less ads mean a nicer experience for users. A sentiment echoed by Linda Lu, senior media director at DigitasLBi China; “For users, it's means we can easily find information on the Baidu platform, and also have a better user experience for people who searched on Baidu. For Clients, they should pay more attention to their SEM account to get great ad performance.”

A greater emphasis on organic results

Google has also streamlined its search results over the years but advertisers have always balanced a focus between organic and paid. According to Tony Chen, CEO of iProspect China, a greater emphasis will now fall on organic in China too.

“Organic results will become more prominent and although top positions in the paid results will become more expensive, they will deliver greater engagement and foster the development of loyal consumer relationships. We believe that agencies who are more nimble will reap these benefits earlier, therefore we have been working hard to ensure our teams are capable of becoming more agile to adapt to these ongoing changes in the China digital ecosystem,” he said.

It won’t impact spend long-term

DigitasLBi’s Lu says that while it means other platforms may start to enter into the mix more seriously, it won’t impact client spend on Baidu.

“For some clients, the search result page is going to become more transparent, so they should adjust the bids to get better ranking. On the other hand, some client will need to explore optimizing their marketing strategy to expose their brand on other media platforms too. It doesn’t make us feel differently about spending money with Baidu, for the moment it remains an important part of digital planning,” she said.

Chen agreed; “we actually feel more reassured than ever as we believe we are going to see more value for every Yuan invested. While a number of ads have disappeared on the right-hand side, these ads were less likely to deliver a positive outcome for brands. Investment saved on these ads can now be used to bid more aggressively for the coveted top spots that create more engagement with users and, therefore, more returns for brands. The steps Baidu has taken to offer more transparent and firm rules on what a quality ad is will only reinforce greater trustworthiness towards them.”

Simplicity and transparency will help in a mobile-first future

Looking forward, experts also believe that as people increasingly use mobile as the first port of call for search, this cleaner and more transparent Baidu will help assert its dominance.

“As users become increasingly reliant on this platform, particularly when you look at Baidu’s current dominance in mobile search results, brands will be able to more easily engage with their target audiences and develop a more consistent relationship with their customers – all of which will reinforce Baidu’s powerful presence in China,” added Chen.