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The China Opportunity: Merkle Becomes Baidu's First US-Headquartered Reseller

The following article originally appeared in Merkle RKG Dossier 6.2, which is now available as a digital download. You can get more information about China and Baidu at www.Merkle.com/Baidu.

As a marketer, China must be on your radar. Not only as a producer of goods, but as a massive consumer of goods and services. Within the digital realm, much of this commerce flows through Baidu, which is why we’re so excited at Merkle to offer new services to help brands get up and running on what is China’s largest search engine (and so much more).

We’ll offer more details on those services in a bit, but first, let’s examine the broader China opportunity in more detail, along with some of the challenges brands face in capturing it.

China's Large (and Growing) Digital Economy

Chinese Economy

China is a very large, vibrant, and fast-growing economy. It has the largest online population globally, and that digital population continues to grow quickly in size, purchasing power and sophistication. These trends in digital are occurring in tandem with the rise of China’s large and fast-growing middle class. Short-term hiccups aside, their trajectory is strong.

In fact, the largest day of ecommerce each year is not Black Friday or Cyber Monday in the US. It’s in China, and has been since 2013. It’s Singles’ Day (11/11), a concept commercialized by Alibaba, which also has the honor of being the largest IPO in history.

Challenges to Entering China

Given the size of the opportunity, what is holding marketers, particularly performance marketers, back from entering the market? Often the answer is, “China is hard.”

Common challenges include:

  • If operating remotely, there is complexity in organizing a performance marketing presence. Complications often arise in:

» Setting up accounts (Chinese licenses required)

» Currency management, payment, and exchange issues

» Translations

» The many different formats and protocols (lots of them)

  • If operating in China, there can still be difficulty in vendor management (a lack of sophisticated, ROI-focused digital marketing)
  • The difficulty of integrating the APIs of China’s platforms and management of bids
  • Finding and keeping staff to develop, manage, optimize, and grow programs
  • The perceived costs of entry and development of programs
  • Transparency issues

Merkle can help brands overcome all of these issues. After all, we’ve been through the process ourselves.

Merkle in China

Merkle has been working in China for more than seven years. It was the first operation we set up outside of the US and we now have more than 400 staff in our two offices located in Shanghai and Nanjing.

Our China strategy had three stages:

STAGE 1 Provide outstanding service for our US clients through the China team.

STAGE 2 Provide service for our global clients in China.

STAGE 3 Provide in-market service and excellence to China-based clients (the most recent example of this is our win of NBA China’s business).

Given our strength in performance marketing globally, the breadth of our client base, and the size of our China team, Baidu, in partnership with Kenshoo, approached Merkle to become the first US-headquartered Baidu reseller for US clients. As part of this partnership, we will be using Kenshoo to manage our China campaigns.

Why is This a Big Deal?

Simply put, Baidu is a giant in one of the world’s most important growth markets. A marketer with a stake in China cannot afford to miss out on the Baidu opportunity.

Baidu is the largest digital platform in China by a long way, and the fourth most trafficked site in the world following Google, Facebook, and YouTube. They are, at their core, an outstanding and highly-used search engine. According to CNNIC research, 87% of China’s digital population prefer Baidu for search.

But categorizing them only as a search engine does not do Baidu full justice.

Baidu also has an encyclopedia function, a social network, a mapping and direction service, a Q&A community, and extensive online video, music, and image collections. Each day Baidu users listen to more than 230 million songs, make 370 million route and location requests, and ask 200 million questions.

In addition to Baidu’s many services and their broad reach, advertisers also have access to the Baidu Union. This is a network of more than 600,000 sites and it allows targeting based on users’ online behavior.

Baidu offers the many formats a US-based performance marketer would expect, and has even developed some innovative offerings. One example is Brand Zone, which lets a marketer buy a substantial brand presence on the SERP, with transaction capabilities, when the consumer’s intent is clearly for that brand.

So what does Merkle's Baidu reseller relationship bring the performance marketer?

  • Merkle’s excellence in performance marketing in China – the same datadriven, technology-enabled service and approach you’ve come to expect in the US.

  • Hassle-free execution – Merkle will handle the account opening, all of the paperwork and licenses required in Chinese.

  • Merkle will manage currency exchange and payment.

  • We will develop Chinese programs as we do in other markets, adding local market nuances. We’ll have an ongoing focus on building out keyword coverage – we’ll do all of the translations and we’ll ensure flawless execution.

  • We’ll provide US-based service and integration with your current team, matched by a bilingual team on the ground in China, focused on program development and management.

  • And we’ll do all this at the cost of the real-time auction. There will be no commissions or fees on spend. There will be no ongoing program management cost for our work on Baidu.

We’re able to provide this service without a commission or program management fee because Baidu pays a commission to their accredited resellers. This is a little known fact that many agencies don’t tell US and global advertisers.

Note that depending on the size of your program, there may be a one-off fee for initial translation.

How to Get Started

Whether you’re looking for more information on China, considering entering the market, want to launch on Baidu in particular, or simply wish to improve your existing efforts, we’re available for consultation. If you’re making a visit to China, we’d welcome hosting you, either in our Shanghai or Nanjing offices.

As a first step, please visit www.Merkle.com/Baidu.