googlechinalogo

Google China Approval Could Restore Confidence Among Search Marketers

  |  July 12, 2010   |  Comments

But the search advertising company awaits approval from another government agency in a decision that affects local and mobile ads.

Hong Kong-- China's decision to renew Google's Internet Content Provider (ICP) license clears the way for the search marketing company to regain advertiser confidence.

"We are very pleased that the government has renewed our ICP license and we look forward to continuing to provide web search and local products to our users in China, " David Drummond, SVP, corporate development and chief legal officer, wrote on Google's blog on Friday.

In January, Google threatened to shut down its operations in the country, citing a "highly sophisticated and targeted attack" from China to hack the Gmail accounts of Chinese human rights activists.

At the time, the company decided it was no longer willing to continue censoring its results on Google.cn in a move to assert its stance on free speech on the Web.

Antony Yiu, regional director, North Asia for iProspect, said marketers had initially reduced their search advertising budget for Google but restored spending after a couple of weeks because they were able to see a stable return on investment as before.

Despite various reports on Google's unwillingness to yield to China's stringent online censorship policy, Yiu says "the censorships issues have no commercial implications to marketers unless the product offering and the operating model changes".

However, in compliance with China's Internet law, the Google.cn site had to redirect to a landing page in Hong Kong, raising doubts at the time among some marketers about the uncertainty of Google's user base and market share in the country. On Monday, the Google.cn site was continuing to redirect to Hong Kong; it was displayed in simplified Chinese characters.

Google's market share in China may have been eroded as a result of the standoff. According to iResearch, a Shanghai-based research firm, Google's market share for Q1 2010 dropped year on year from 33 percent to 29.5 percent, while its rival Baidu increased in the same period from 62.3 percent to 67.8 percent.

According to the market research company, China's total search engine revenue totaled more than (U.S.) $282 million for the first quarter of this year.

China's renewal of Google's license, Yiu said, will help advertisers regain confidence in the company, in particular, when allocating advertising budgets on Google for upcoming marketing campaigns.

A Google spokesperson said they will clarify what products the company will offer locally through Google.cn in the coming days.

While Google might be the most popular search engine in most markets worldwide, in China, Baidu dominates the local search landscape.

In recent months, various reports had speculated that emerging search players in China such as Tencent's Soso, Netease, and Sina will dilute market share from Baidu if Google had blacked out from the country.

But Yiu says the new players currently possess little market share and their search product offerings are still under development.

He added that most of these smaller search engines have a very young user base, mostly comprised of students who have minimal disposal incomes compared with Google's middle to affluent consumer base, which are usually the key targets of many marketers.

Earlier this month, Google has made a further investment in a local online music provider Top100.cn, a partnership that both companies forged since 2007, to provide online music through legal downloads in China. The site claims to boast a music library of more than one million songs.

It is understood that Google has been trying to push display ad sales on the Chinese music search portal in recent months but marketers are sitting on the fence to advertise via this product offering as they determine the actual size of the user base using the music service.

While China approved the ICP license for Google, another challenge awaits.

The State Bureau of Surveying and Mapping has approved 13 local companies including Baidu, to operate Internet map services in China but not Google in its first round of qualification.

Google's failure to secure a license from the SBSM will not only affect ads that are currently served on the Google Maps site, it would be unable to offer Internet mapping services via mobile phones in the country.

This would thwart the search giant's global plans to focus on monetizing its mobile advertising and services, forecast to gain rapid growth in the next three years.

Google first established its presence in China in July 2005 and launched Google.cn in 2006. The company has local sales teams in key markets of China in Beijing, Shanghai and Guangzhou.

ClickZ Live Toronto Twitter Canada MD Kirstine Stewart to Keynote Toronto
ClickZ Live Toronto (May 14-16) is a new event addressing the rapidly changing landscape that digital marketers face. The agenda focuses on customer engagement and attaining maximum ROI through online marketing efforts across paid, owned & earned media. Register now and save!*
*Early Bird Rates expire April 17.

ABOUT THE AUTHOR

Adaline Lau

Adaline Lau, ClickZ Asia editor, oversees day-to-day editorial operations covering digital marketing from search to social media, mobile to analytics in the region. Before ClickZ, she was senior reporter at Marketing Magazine and has worked as a journalist for The Singapore Marketer and Asia Pacific Broadcasting. Connect with her @adalinelau or Google+.

COMMENTSCommenting policy

comments powered by Disqus

RELATED READING

Information currently unavailable

Get the ClickZ Search newsletter delivered to you. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

ion Interactive Marketing Apps for Landing Pages White Paper

Marketing Apps for Landing Pages White Paper
Marketing apps can elevate a formulaic landing page into a highly interactive user experience. Learn how to turn your static content into exciting marketing apps.

eMarketer: Redefining Mobile-Only Users: Millions Selectively Avoid the Desktop

Redefining 'Mobile-Only' Users: Millions Selectively Avoid the Desktop
A new breed of selective mobile-only consumers has emerged. What are the demos of these users and how and where can marketers reach them?

Jobs

    • Contact Center Professional
      Contact Center Professional (TCC: The Contact Center) - Hunt ValleyLooking to join a workforce that prides themselves on being routine and keeping...
    • Recruitment and Team Building Ambassador
      Recruitment and Team Building Ambassador (Agora Inc.) - BaltimoreAgora, www.agora-inc.com, continues to expand! In order to meet the needs of our...
    • Design and Publishing Specialist
      Design and Publishing Specialist (Bonner and Partners) - BaltimoreIf you’re a hungry self-starter, creative, organized and have an extreme...