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Chinese search engine marketing is costly but responsible

April 3, 2017 Baidu is the most popular search engine in China with approximately 70% market share. It is also the second most popular search engine in the world after Google.

Baidu, like Google has its own advertising service called Baidu Tuiguang which is the equivalent of Google Adwords (“Tuiguang” means “promotion in Chinese”).

However, unlike Google Adwords whose costs differ according to the popularity of the key words and other criteria and for which it is possible to budget according to a specific company’s needs, the cost of opening a Baidu Tuiguang account has a minimum cost of 6000 yuan (857 euros). Costs are also dependent on the activity of the advertising company. If the company’s activity is education or medical related, the minimum cost of opening an account is 11600 yuan (1657 euros).

It should be noted that in return for the income generated by the PPC advertisements, the search engines are liable for the content of advertisements published online. In an effort to combat misleading advertising, a new law came into effect on 1 September 2016. According to this new legislation, search engines are obliged to verify that the content of online advertisements corresponds to goods and services proposed by the advertising company.

The new law considers search engine marketing as advertising and thus strengthens consumer protection in relation to online misleading advertising. Earlier this year, both Baidu and Sogou (another Chinese search engine) were fined, the former for selling keywords which enabled a hospital to advertise a medical service (the hospital was not allowed to advertise) and the latter for having sold keywords to a company which had been struck off the Chinese Companies Register nine months previously. In both cases, the court judged that the search engines had failed at their obligations to check that the advertising content was legitimate in relation to the goods and services on offer and was not misleading.

The new legislation also obliges the search engines to carry out checks in relation to data privacy and unfair competition.

This new legislation goes some way in strengthening consumer protection in China. Time, however, will tell, if it succeeds in changing company practices in the long term.

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