In China, the largest online marketplace in the world, Google captures less than 5% of search traffic. It’s dwarfed by the Chinese search engine Baidu, which has about 70% of search activity.
It may be hard to overestimate Baidu’s place in Chinese life. Google has given us the Android platform, dynamic maps and promises to deliver driverless cars, but Baidu already provides a mind-boggling array of consumer products, including chopsticks that test the quality of food you’re about to eat and send the results, via Bluetooth, to your phone. (Click to watch a demo.)
So, how can an American travel marketer, eager to reach 614 million Chinese online consumers, make the most of Baidu?
Baidu doesn’t make it easy. But that’s less a reflection of its willingness to take your money than indicative of the high number of fraudulent travel sites that initially defined the online user experience for many Chinese consumers who bought tickets online only to find out, at the airport, that they had been fleeced.
As a result, Baidu has instituted policies to make it a trusted source. It goes to great lengths to verify the legitimacy of advertisers, and consumer complaints easily get an advertiser ousted from the site.
Baidu requires, among other things, that an international travel company own the products it sells — a significant barrier to resellers like online travel agencies (OTAs).
In addition, OTAs are further required to have a brick-and-mortar presence in China. To advertise on Baidu, five contracts must be executed and sealed with a “chop” (indicating the business meets all requirements to operate in China).
Further, it’s prudent for suppliers and retailers to understand the Chinese approach to search and to buying travel online. The Chinese search differently than Americans do. They’re driven by destinations (Yellowstone is the No. 1 U.S. destination searched for by Chinese travelers), attractions and, of course, shopping.
While they’re still interested in group tours and commoditized packages, there’s a rise in independent travel, driven by high net worth individuals under age 45.
Due to the early proliferation of scams, Baidu advertisers actually benefit substantially from buyer skepticism. Because Baidu invests heavily in verification, paid search in China is more likely to be clicked on than organic search.
Then there are various government regulations layered on top of Baidu policy. Like Google, Baidu wouldn’t accept advertisements for services that are blatantly illegal.
And there’s one tourist-related activity that is very popular in the U.S. but is in fact illegal in mainland China: gambling. As a result, the words “gambling” and “gaming” cannot be purchased as keywords, nor can anyone who expects their website to be accessible in China have those words on searchable pages.
Given the complications for American companies wanting to tap the Chinese online audience, it’s not surprising that a few companies have popped up in the U.S. as authorized Baidu representatives, hoping to assist U.S. companies through the thicket.
One of them, China Search International (CSI), says that it educates “brands on the market size, opportunity, reach and strategic support to target Chinese travelers.” It has the exclusive right to work with OTAs and has a nonexclusive specialty in general travel.
Sarah Holtzman, head of North American sales for CSI, says the company is positioned as a reseller rather than a media buying agency. They don’t charge management or service fees; Baidu pays them to represent the company.
In addition to walking companies through the various restrictions and regulations, Holtzman said CSI advises on, well, ways around the restrictions and regulations — to breach, in essence, the great firewalls of China.
Let’s say you’re the marketing director for a Las Vegas resort and casino. Can you only promote your accommodations, entertainment and restaurants, but not gaming?
You certainly can’t have gambling mentioned directly in ads or on pages directly linked to Baidu search results, but you can put information about gaming behind a “bridge page,” similar to a site with adult content that asks viewers to first click a button saying they’re at least 18 years of age.
She also notes that more and more Chinese are acquiring virtual private network (aka VPN) access, which enables them to bypass government censors (and also to reach Twitter, YouTube and Facebook, which are otherwise unavailable in China).
She does have a casino group as a customer and is engaged with tour operators and destination management companies, but has yet to sign a major cruise line.
While Baidu is dominant, Google still has outsized brand strength. Both companies, in fact, charge higher cost-per-click (CPC) than their market share would suggest; Baidu captures 82% of the search revenue with 70% of the market, and Google China has almost 11% of the revenue, a percentage that is more than double its market share. (Both charge roughly the same CPC in the travel vertical.)
It’s appearing that the more one becomes involved in China, the more one sees the correlation between opportunity and challenge.
To paraphrase Peter Parker’s Uncle Ben, “With great upside comes great complication.”
Email Arnie Weissmann at [email protected] and follow him on Twitter at twitter.com/awtravelweekly.