Get the free version of Marbridge Daily delivered to your inbox

Click here to subscribe

Baidu Takes 62% of Q3 2007 Search Revenues

Marbridge Consulting, 12/20/07

According to a new survey of Chinese paid search advertisers conducted by China IntelliConsulting, in Q3 2007 Baidu (Nasdaq: BIDU) held 62% of the market by revenue, Google (Nasdaq: GOOG) roughly 23%, and Yahoo 11%. A related search engine user survey conducted in September found that Baidu had increased its share of the user market to 70%.

The advertiser survey also found that SMEs in China's interior and in second- and third-tier cities in coastal provinces had begun to adopt paid search advertising in significant numbers. As a result, the combined number of advertisers from Beijing, Shanghai, Guangzhou and Shenzhen dropped from 57.7% of the market at the end of 2006 to 47.7% in Q3 2007.

Geographically, Baidu enjoyed greater market shares in Beijing and most of central and western China than its national market share, while Google performed above its national average in Shanghai, Zhejiang, Fujian and Guangdong.

With greater brand awareness than Google in markets outside Beijing, Shanghai, Guangzhou and Shenzhen, and a more comprehensive nationwide distribution network, Baidu dominated in the acquisition of new advertisers; during the quarter 81.2% of new advertisers placed ads on Baidu, compared to 29.6% on Google. However, as China's paid search market gradually begins to mature, increasing numbers of Baidu advertisers have also implemented cross-platform marketing strategies. As a result, in Q4 almost 50% of Google's new advertisers will be those currently advertising on Baidu.

One area where Google is perceived as significantly superior to Baidu is in its ability to better reduce click fraud and other types of invalid clicks. Advertisers estimated the invalid click rate - including both click fraud and clicks by users unaware that the search result is an ad - for Baidu at 42.8%, but at 30.5% for both Google and Yahoo. In addition, 39.3% of advertisers with at least some knowledge of invalid clicks said they felt Baidu's invalid click rate was too high and might discourage them from placing further ads. In contrast, only 24.3% said they same about Google, and 29.3% about Yahoo. However, among Baidu advertisers, only 27.9% have some knowledge about invalid clicks and can gauge Baidu's invalid click rate. For this reason, it may be some time before the issue of invalid clicks drives significant numbers of Baidu advertisers to leave Baidu in favor of other search engines.

Keywords: Baidu BIDU Google GOOG China Yahoo online search market share SME 2nd tier 3rd tier Beijing Shanghai Guangzhou Shenzhen Zhejiang Fujian Guangdong online advertising click fraud Internet


Please note, all fields are required.
None of your personal information will be shared with third parties.



The information contained in this newsletter is based upon sources that Marbridge Consulting believes to be reliable, and we have made every effort to translate the original articles or article excerpts as faithfully as possible. However, Marbridge Consulting makes no warranty of and assumes no legal responsibility for the accuracy of either the original source material or the English language translations.

Marbridge Daily Premium

Interested in gaining full access to all newsletter articles and the Marbridge Daily archive? To learn more about premium subscription options, including pricing, please:

Click here

Marbridge Consulting RSS Feed

Marbridge Reports