Up until the middle of 2016, Chinese PPC, especially with Baidu, was, on average, delivering better returns than SEO. This was due to several factors:
- First, the search results, especially for popular terms, were dominated by paid ads. In some cases, hardly any organic results would be displayed in the first page;
- Second, there was little visual distinction in Baidu between paid and organic results and most people couldn’t even tell the difference.
Things have changed significantly since the most recent scandal involving fraudulent Baidu medical ads that led to the death of young cancer sufferer. Following public outcry and negative publicity, Chinese government published new rules concerning Baidu advertising that, among other things, recommended limiting paid results to no more than 30% of SERP (search engine results pages).
Also, the new rules require ads to be more easily distinguishable from organic results in order to minimize the confusion between them.
Baidu, as well as other Chinese search engines, have announced their commitment to comply with the new rules (not that they had any choice in the matter anyway). Less advertising space has inevitably led to increased cost of PPC advertising which has made such campaigns more expensive than they could have been in the past.
On the positive side, the quality of ads is supposed to improve which may, at least in theory, increase trustworthiness of paid ads from a user standpoint.
How to choose between PPC vs. SEO for Chinese market
When it comes to SEO, organic results are now guaranteed to feature prominently in Chinese SERPs which makes SEO a more worthwhile investment than it would have been before the new rules were implemented.
On the other hand, you still need to consider different pros and cons of each strategy.
One of the most important consideration is the time frame. Getting results from PPC is almost instant while building SEO traffic takes time. Typically, it would take somewhere between 3 to 6 months to start seeing some benefits from SEO and 9-12 months of consistent efforts to build a stable organic ranking to show up high enough in SERPs. If you can’t wait that long than PPC is probably the best route to choose.
In addition, since the feedback is fast and measurable, PPC is best at testing different keywords to see which ones work better. Tweaking SEO keywords takes much longer feedback loop.
Calculating which strategy would be more profitable also requires knowing LTV (life time value) of a customer. This figure can then be compared to the cost of acquiring that customer with either SEO or PPC. As a general rule, SEO tends to be a better fit for high volume, low LTV cases.
Another disadvantage of SEO for Chinese market compared to PPC that is worth mentioning is its sensitivity to Baidu algorithms changes. When that happens, an optimized site can lose ranking practically overnight which makes SEO an ongoing, hence expensive, effort.
Obviously PPC doesn’t have this weakness since you are paying Baidu for getting visitors bypassing their ranking algorithms.
On the other hand, organic results are generally considered to be more trustworthy and therefore are more likely to be clicked than the ads. Since now Chinese engines are required to implement more visual distinction between paid and organic results, visitors are becoming more aware of which is which and tend to favor organic ones.
Considering the above point, SEO for Chinese market seems to offer the better value in search marketing than PPC as a long term strategy. There is an exception however: if your niche is dominated by established players or authority sites that have been building their reputation for years, it is highly unlikely that you would be able to unseat them. However, if you employ PPC you still may be able to outbid them.
In conclusion, choosing between SEO and PPC requires answering three basic questions:
- Can you afford waiting a few months for the results or time is of the essence?
- How LTV of your customer stacks against the cost of their acquisition with either strategy?
- How competitive is your space and whether you have a realistic chance to achieve high organic ranking vs. existing sites?