Baidu to Make Conversion Rates a Key Determinant of Quality Score
Marbridge Consulting, 7/31/15
Chinese search giant Baidu (Nasdaq: BIDU) plans to modify its algorithm for determining a search ad's quality score, making conversion rates a key determinant, a reliable source at a Chinese search engine marketing agency revealed to Marbridge today. A search ad's quality score, together with the cost per click (CPC) bid by the advertiser, is used to determine how the ad is ranked, with the highest ranking ads for any given keyword appearing at the top of the search results page, followed by the next highest ranking ad, and so on. The quality score is normally based on a variety of factors, such as the relevance of the ad copy to the keyword, and the relevance of the website's content to the keyword.
The source added that the change would basically force Baidu's advertisers to use the company's Baidu Tongji ("Baidu Statistics"), a system similar to Google Analytics. To use Baidu Tongji, the advertiser must add a small amount of Baidu code to each page of their site they wish to allow Baidu to track. The code allows Baidu to follow and analyze on-deck traffic, including conversions (e.g. traffic that results in some desired action, such as a registration or sale), which, when collected from many advertisers over time would be highly valuable in improving Baidu's ability to provide more targeted advertising.
The source, however, was skeptical that small and medium enterprise advertisers, which comprise roughly 70% of Baidu's search revenues, would have sufficient technical background or interest to adopt Baidu Tongji, and also expected multinational advertisers to push back against the requirement to add Baidu code to their sites to maintain their quality scores.
No detail was available regarding when or how (e.g. trials) Baidu might implement the change.
Keywords: Internet Baidu BIDU Baidu Tongji online search search advertising
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