Baidu (BIDU) is the most popular search engine among paid search advertisers: in September 2007, Baidu had ~107K advertising clients, more than doubling Google's ~51K clients and Yahoo's ~52K clients, according to a recent report by research firms KKeYe and Dadu Consulting.
Summary of the Report. The report found that there were totally 184K paid search advertisers in China in September 2007, and these advertisers purchased over 7 million keyword ads in China during the month. We highlight two most metrics from the report that are very important to analyzing Baidu's current market position: Penetration Rate and Exclusive Advertisers.
1. Penetration Rate.
Table 1 shows that Baidu's penetration rate among paid search advertisers in China is 57.9%, more than doubling Yahoo's 28.4% and Google's 27.6%. This means: 57.9% of all the paid search advertisers use Baidu, while only half as many use Yahoo and Google. This demonstrates Baidu's dominant popularity among paid search advertisers in China.
Table 1: Comparing Search Engines' Customer Base in China
| Search Engine | Number of Advertisers | Penetration Rate |
| Baidu | 106,952 | 57.9% |
| Yahoo | 52,470 | 28.4% |
| 50,967 | 27.6% | |
| Tencent/Soso | 25,713 | 13.9% |
| Zhongsou | 10,190 | 5.5% |
| Sohu/Sogou | 9,387 | 5.1% |
| Total | 184,616 | 100.0% |
Source: KKeYe and Dadu Consulting
Note: The sum of all the search engines' numbers is larger than the total number because some advertisers use multiple search engines and were counted multiple times as a result.
2. Exclusive Advertisers.
Exclusive advertisers are advertisers who only advertise on one search engine. According to data published by KKeYe and Dadu Consulting (Table 2), 73.7% of all the paid search advertisers only advertise on one search engine. Such a high exclusive ratio shows that paid search advertisers are very selective in China, and the competition is fierce among search engines.
We believe a high exclusive ratio indicates high customer loyalty. As shown in table 2, 70.6% of Baidu's advertisers only advertise on Baidu, the highest ratio among all the search engines in China. In terms of absolute numbers, Baidu had ~75K exclusive advertisers in September 2007, vs. Yahoo's ~32K and Google's ~15K. This comparison of customer loyalty demonstrates Baidu's superior customer satisfaction and customer loyalty, and shows that Baidu is dominantly more popular than all the other search engines in China.
Table 2: Comparing Search Engines' Number of Exclusive Advertisers in China
| Search Engine | # of Advertisers | Exclusive Advertisers | Exclusive as % of Total |
| Baidu | 106,952 | 75,455 | 70.6% |
| Yahoo | 52,470 | 31,611 | 60.2% |
| 50,967 | 14,620 | 28.7% | |
| Tencent/Soso | 25,713 | 1,193 | 4.6% |
| Zhongsou | 10,190 | 7,038 | 69.1% |
| Sohu/Sogou | 9,387 | 6,059 | 64.5% |
| Total | 184,616 | 135,976 | 73.7% |
Source: KKeYe and Dadu Consulting
Other reports in our Baidu 3Q07 Preview Series:
(1): Baidu Maintained 4-1 Traffic Lead Over Google China
(2): Search Queries Increased 4% vs. Q2
(3): Baidu Expanded User Market Share to ~70%
(5): Historical Trading Pattern Reveals Key Metrics to Watch
(6): Baidu Q3 Revenue Estimated to Be $66.7M by Analysys International
Related: Latest Research on Baidu; Compare 19 China Internet Stocks
