CHINA SEARCH INTERNATIONAL, BAIDU ADVERTISING PRODUCTS AND SERVICES MEDIA KIT – ALL BAIDU AD PRODUCTS – Q4 2012

China Search International is a value added-service provider that allows western companies to launch into China. We help companies to succeed on Baidu in China by adding our own insights, recommendations and best practice. Leveraging our direct relationship with Baidu as a representative in AU, NZ, US and UK, China Search International can assist clients launch a successful Baidu campaign that delivers results

OPPORTUNITY IN CHINA

‘INFLUENCERS’ ARE TALKING ABOUT CHINA“Asia will become home to most of the world's middle class by as early as 2025. Not only becoming the world’s largest producer of goods and services; becoming the largest consumer of them. This is good news for Australia and it should drive a profound change in our thinking about our economic relationship with Asia”

Source: Launch Speech for “Asia Century” White Paper

‘INFLUENCERS’ ARE TALKING ABOUT CHINA"The rise of Chinese middle class will change the world… Lucky for us at Crown, they don't mind having a punt”

Source: News.com.au

THE CHINA ECONOMY

Source: Econsultancy; China, The Digital Market Landscape Report, October 2012

Of the world’s emerging markets, China is often viewed as the region with the greatest potential. Home to more than 1.3 billion people and with an economy which has grown at around 10% per year since the 1980s China has fast become the driving force of the global economy

THE LARGEST INTERNET POPULATION IN THE WORLD

Source: CNNIC 30th Statistical Report on Internet Development in China, 2012

513 Million39.9% reach of total population, & growing YOY

OPPORTUNITY IN CHINA

Source: China Internet Insights, 2012; ChinaInternetWatch.com April 2012

PEOPLE IN CHINA, ONLINE

Australian Online Population17m

China Online Population513m

Source: China Internet Insights, 2012; ChinaInternetWatch.com April 2012

Key insight;

China… great potential

Baidu; 78.00%

Others; 9.00%

SoSo; 7.30% Google; 2.60%

While IM records the highest growth, search provides a broader, and more mature, audience

Stock Trading

Travel Booking

Group Deals

Forums/BBS

Internet Banking

Online Payment

Online Shopping

Literature

SNS

Email

Weibo

Blogs

Games

Video

News

Music

Search Engines

Instant Messenger

40.02

43.07

64.65

144.69

166.24

166.76

193.95

202.67

244.24

245.77

249.88

318.64

324.28

325.31

366.87

385.85

407.4

415.1

Source: CNNIC 30th Statistical Report on Internet Development in China, 2012

CHINESE CONSUMER USES SEARCH ENGINES TO NAVIGATE THE WEB

Key insight;

China is searching and consuming

Key insight;

Huge explosion of users with present scale lifting by 10% YOY

Key insight;

Heavy use of search & directories similar to AU composition

Key insight;

Similar engagement times to mature marketplaces

Key insight;

Online buying big and will get bigger

Key insight;

Only way for China internet penetration is up

MIDDLE AND AFFLUENT CONSUMERS (MAC’S)

Year Households2005 11,000,0002011 50,000,0002020 130,000,000*

*Approx. the same number as this classification in the USA

Source: Boston Consulting Group

MORE MOBILE MILLIONAIRES THAN EVER BEFORE

*Source: Boston Consulting Group – China’s Digital Generations 3.0 , April 2012

"more than half of the travellers surveyed from mainland China were intending to travel to Australia over the next two years”**

**Visa PATA Travel Intention Survey 2011 (published 2012)

30% YOY growth (1.4M)*

5 fold increase in affluent households by 2020*

Actively shopping for luxury goods, gambling, travelling abroad*

Top twenty regions by millionaires

Source: Boston Consulting Group – China’s Digital Generations 3.0 , April 2012

ADVANCED TARGETING AVAILABLE WITH BAIDU ADVERTISING PRODUCTS

90% of China’s wealth can be found in 20 cities and provinces, 50% can be found in 3 cities and provinces alone (Beijing, Guandong and Shanghai). However, wealth will continue to flourish across the country

ACCELERATED GROWTH

China India Nigeria Russia Iran USA0

50100150200250300350400450500

New Users 2007 - 2010 (MM) Total UsersSource: China Internet Insights, 2012; ChinaInternetWatch.com April 2012

Key insight;~35% of China’s digital population have come online in the last 5 years

OPPORTUNITY IN CHINAChina already has the largest online population in the world at 513 million usersAstonishingly that’s only 38% of their population, so their capacity for growth is enormousThey’re not just growing in size – the Chinese are growing in affluence, the number of millionaires is expected to grow 33% year-on-year for the next 5 yearsThe middle classes are expanding beyond the largest cities more rapidly & in greater numbers than any market has ever witnessed. The number of Middle and Affluent Consumer households in China will be the same as the US by 2020As China's recent economic growth continues to surge, the demand for online goods and services will continue to grow

Source: China Internet Insights, 2012; ChinaInternetWatch.com April 2012

CORE BAIDU PRODUCTS 2012

CORE BAIDU PRODUCTS 2012

Baidu Sponsored Search

Brandzone

Baidu Mobile

Baidu Union (Content Network)

Baidu Sponsored Search

Brandzone

Baidu Mobile

Baidu Union (Content Network)

BAIDU SPONSORED SEARCH, PAID SEARCH

Each month, over 90% of China's internet users use Baidu search.With the daily query number reaching the hundreds of millions. Through Baidu paid search, clients can reach this vast audience of potential customers when they are actively searching for information related to your clientBy choosing specific keywords, ads are displayed at the exact time users are looking for client’s products. Through continuous monitoring and optimisation, you can obtain the maximum return on your paid search ad investment.

BAIDU SPONSORED SEARCH, PAID SEARCHHow does it work?

Sponsored search listings that appear over-and-above the natural listing in the Baidu search results pagesDepending on the number of advertisers, listings are seen at the top of page, or running down the right-hand-railBid to position using max bidsRanking algorithm similar to Google’s Quality Score metricThree match types on keywords:– Exact match - Baidu's relevant audit will check your keyword list to make sure your ad and landing page has high relevance with

these keywords. Exact matches show at the top of natural search result pages. Exact match can trigger an ad appearance only when a user queries Baidu with exactly the same keyword in your keyword list

– Broad match - Broad match triggers ads by query with a relevant variation of the keyword you bought. These ads appear on the right side of the search result page

– Right match - If you choose some less relevant keywords to target your potential customers, the only choice to pass Baidu relevant audit is Right Match. Right Match ads list on the right side of the search result page, alongside those natural search results, competitive position and bidding price with broad match triggered ads

BAIDU SPONSORED SEARCH, PAID SEARCH

Sponsored Search, Paid Search Listing on search

results page

Sponsored Search, Paid Search Listing on search

results page

BAIDU SPONSORED SEARCH, PAID SEARCH - AD SPECIFICATIONS

Sponsored Search Listings

Format: text

Heading – 25 Mandarin characters including space (approximately 50 English Characters)

Description 1 – 40 Mandarin characters including space (approximately 80 English Characters)

Description 2 - 40 Mandarin characters including space (approximately 80 English Characters)

Ad specifications correct as of August 2012

Baidu Sponsored Search

Brandzone

Baidu Mobile

Baidu Union (Content Network)

BAIDU BRANDZONEBrandzone is Baidu’s equivalent of a home page take over. Brandzone clients can “own” the space above the fold whenever one of their brand terms is searched on Baidu. This placement is recommend to clients who already have a well known brand established in China

BAIDU BRANDZONEHow does it work?

Instead of just a search listing, Brandzone provides true brand exposure, ensuring users know who you are long before they make it to your websiteBest of all – Brands can also “own” their brand related keywords exclusively. No other Baidu advertiser can use their keywords. Their competitors can no longer capitalize on their brand equityThere is no equivalent of this on other search enginesImpressively, Brandzone campaigns deliver average click through rates (CTR) of 50%. Compare that to the Baidu SEM average CTR of 1% (or the Google SEM average CTR of 0.2%)Half of everyone that views a Brandzone campaign interacts with it. That’s measurable proof of brand awarenessBrandzone keywords are usually trademarked terms. Once Baidu grants use of a keyword to an advertiser they own it exclusively. No other advertiser would be able to utilise their keywords

BAIDU BRANDZONEBurberry is a great example of what is possible on the platform. Their Brandzone campaign (translated from Chinese to English using Google Translate) shows videos, animated gifs, multiple product photos, latest news, deep links and social media

BAIDU BRANDZONEBrandzone ad below for Chanel shows their logo, latest news results, product promotions, links to videos, their official television commercial, social media links, downloads and links to their iPhone app

BAIDU BRANDZONERolex contains animated gifs and a full table of their biggest selling range for men and women

Baidu Sponsored Search

Brandzone

Baidu Mobile

Baidu Union (Content Network)

BAIDU MOBILE, EXPECTED LAUNCH 2013

230 million Chinese access the internet via a mobile device

How does it work?

Whilst the current mobile internet access figures are huge for China – they ere getting bigger. By 2014 China will have over 957million mobile internet usersBaidu sells its advertising space for their mobile platform separatelyAs far fewer results are shown above the fold, the paid ad slots deliver very high CTRs of around 3%The need to be above the fold however, does result in greater competition amongst advertisers. The result is a higher CPC for generic terms compared to their PC platform

BAIDU MOBILE, EXPECTED LAUNCH 2013

Baidu currently only support Title, Description and Telephone extension but will support downloads, emails and website links in the future

Title

DescriptionTelephone extension

Title

Description

Baidu Sponsored Search

Brandzone

Baidu Mobile

Baidu Union (Content Network)

Baidu Targetisement offers advertisers the opportunity to display their ads on Baidu’s high traffic properties

BAIDU UNION, DISPLAY CONTENT NETWORK – BAIDU PROPERTIES

How does it work?

Targetisement works in much the same was as Baidu Content Network placements, except that ads are seen exclusively on Baidu’s own high traffic properties

Minimum requirement to use Baidu Union is a current sponsored search campaign Sites within Targetisement include:

Baidu Baike (China’s equivalent to Wikipedia)Baidu Zhidao (China’s equivalent to Yahoo answers)Baidu Hi – Social Networking siteBaidu Paste Bar - Forums

BAIDU UNION, DISPLAY CONTENT NETWORK – BAIDU PROPERTIES

Targetisement banners, placements are available in a range of sizes and in JPG, GIF and SWF

BAIDU UNION, DISPLAY CONTENT NETWORK – BAIDU PROPERTIES

Targetisement placement is a pop-up that must be dismissed by the user before they can continue to their search results on Baidu paste bar

BAIDU UNION, DISPLAY CONTENT NETWORK – BAIDU PROPERTIES

BAIDU UNION, DISPLAY CONTENT NETWORK – EXTERNAL PARTNER SITES

With over 600,000 websites and a detailed audience targeting algorithm, Baidu display banners are a fantastic way to reach exactly the right users with exactly the right content to build traffic and brand recognitionMost of the 600,000 websites are exclusive

How does it work?

Baidu tracks where web users go, what sites they visit, what search terms they use and what they say on social networks The result is a very rich detailed profile that advertising clients can use, to target exactly the right audience for their productsBanner ads have an advantage over pure search results in that they can use imagery, flash, text and levels of interactivity that a website user is more likely to engage withIt is also great for clients whose campaign objectives include extending brand awareness. The use of logos, colours and imagery will do a much better job of extending the reach of a client’s brand than search results aloneVideo banners can even be used as “pre-roll” whilst Baidu users are waiting for online games to loadOnce we define the audience profile – they will see client banners on every content network site they visitAPI compatible to ensure all results could be tracked in 3rd party platforms such as Marin, DART etc.Minimum requirement to use Baidu Union is a current sponsored search campaign

BAIDU UNION, DISPLAY CONTENT NETWORK – EXTERNAL PARTNER SITES

There are over 600,000+ sites within the Baidu Content Network. They cover a wide range of genres, ensuring your target audience will be presented with client creative regularly. Most sites exclusive to Baidu

BAIDU UNION, DISPLAY CONTENT NETWORK – EXTERNAL PARTNER SITES

Baidu Embedded Video Ads, displayed pre-roll video while online game loading

BAIDU UNION, DISPLAY CONTENT NETWORK – EXTERNAL PARTNER SITES

Baidu display/image based placements, available in 18 different sizes, in JPG GIF or SWF formats

BAIDU UNION, DISPLAY CONTENT NETWORK – EXTERNAL PARTNER SITES

Baidu floating ads, placements move down page and stay in the users line of sight. Available in 3 sizes and in JPG GIF or SWF formats

BAIDU UNION, DISPLAY CONTENT NETWORK – EXTERNAL PARTNER SITES

BAIDU UNION, DISPLAY CONTENT NETWORK - AD SPECIFICATIONSDisplay AdsFormat: JPG/GIF/SWF，textSize: 55k

1. 468x60, 728x90, 960x90, 960x60, 640x60, 460x60, 580x90, 760x902. 250x250, 200x200, 336x280, 300x250, 360x3003. 120x600, 160x600

Floating AdsFormat: JPG/GIF/SWFSize: 55k

1. 120x2702. 120x1203. 300x250, 250x200

Pre-roll / Pause Ads(Displayed when video / games is loading or paused)

400x30055kbFormat ： SWF/JPGLength (Flash) ： 3-4 secondsCPU usage （ Flash ）： <25%

Ad specifications correct as of August 2012

BAIDU BID MECHANICS

MAX BIDS AND RANK IN BAIDU PPCBidding Price, Quality Score and CRI

If more than one advertiser chooses the same keyword, the maximum click price you bid is not the only factor to get better position; quality score is another important factor that affects your ad ranking. Baidu ranks ads based on its Comprehensive Rank Index (CRI)

CRI= Bidding Price x Quality Score

When more people click on your ad then others, it means your ad has a better Click Through Rate (CTR). Higher CTR helps you get a better quality score, which results in you ads getting a better position with lower cost. The following chart shows how Baidu calculates CRI and decides the ranking and click price for each account

Source: http://is.baidu.com/bidding_price.html

Q&A ABOUT BIDDING, KEYWORDS AND PROGRAM MANAGEMENT ON BAIDU

Q: How do they manage the bid process?A: If clients have a bid management tool they can apply for an API with Baidu. Otherwise they have to use the Baidu bid manager

Q: What technology is involved?A: Either the agency /client's bid management tool or the Baidu bid management portal

Q: Is it dynamic/real-time?A: It's not real time - there's a delay of a few hours

Q: Why has CSI set an initial CPC of $2?A: This max CPC has been set to ensure a guaranteed position 1 across all terms. Clients are free to modify this max bid by using the Baidu control console or their bid management tool

Q: Will my Google, Yahoo, Bing keywords work on Baidu?

A: The important thing to note is that just because a keyword works on major western based engines, this does not mean they will work on Baidu. The Chinese public search in a very different way. CSI can recommend keywords via a semantic and idiomatic translations that will drive meaning volume to the site

Q: Can CSI help with the management of my Baidu search program in China?A: CSI workes with many many value added partners that will ensure your success in China. We are happy to recommend a strategic partner that is right for your business

HOW CHINA SEARCH INTERNATIONAL CAN HELP

HOW CHINA SEARCH INTERNATIONAL ENSURES SUCCESSChina Search International is a value-added service that is free to use, some of the value added tasks that we can perform are:

Insights Strategy Implementation Maintenance

HOW CHINA SEARCH INTERNATIONAL ENSURES SUCCESSChina Search International is a value-added service that is free to use, some of the value added tasks that we can perform are:

Speed-to-market in China, account set up in 4-6 weeksDirect relationship with Baidu account managers in ChinaBudget recommendations and overarching strategy specific to BaiduInsights into the Chinese marketplace and audience in terms of purchase habits, seasonality and method of search-engine useKeyword recommendations in local language or creation from scratchProposals including estimated volume and cost based on pre-selected keywords, estimated conversion volumes based on your own in-house metricsRecommended max bidsAd copy translation, semantic/idiomatic translation or ad copy built in local language from scratch Bid management API application process to Baidu Full end-to-end account set up Website and shopping cart/conversion funnel translation, working with strategic partners, if required Consulting staff and contracts that are based here in Sydney, Australia available by phone or email

OPENING AN ACCOUNT ON BAIDU

ACCOUNT OPENING PROCESSIf you’re considering a search, display or Brand Zone online advertising campaign on Baidu, the team at China Search International is here to help

Setting up an account on Baidu is a complex and sometimes lengthy exercise. China Search International makes this process easy and fast for our clients

Please click to download detailed instructions on how to kick-off the process of setting an account up on Baidu

To pair with these instructions, China Search International has created a one-pager step-by-step guide to help keep track of the process, please click to download . This will also give you some transparency on time frames and some of the activity to expect in the future

We can help you get started by selecting and translating your keywords for Baidu

Send us any keywords you’re currently using for other search campaignsIf you don’t have an existing keyword list, we will help you develop a list of what keywords you should be usingWe use the list to check how many Baidu users have typed in keywords to gauge demand for your goods and servicesThis allows us to present a budget estimate. You can refine your keywords and budget until you have a mix you’re comfortable with. We can recommend budget lines for Baidu based on key client KPIs and goals

SELECTION CRITERIA FOR CLIENTS

KEY PROSPECT CRITERIA FOR CLIENTS

• Commercial motivation via sales to a new marketplaceHas products and services that can

be sold to China

• Marketers understand value and performance of PPC to their businessIs currently active in PPC

• Open minded to adopt native language and China specific content (notes about English pages on the next slide)

Has a website this is in Chinese or at least can be easily translated into

• Understands the scale of the opportunity and already has buy-in or is flexible to consider best-practice from China Search International

Has an existing strategy to China or can be persuaded to adopt one

• Potentially can be persuaded to reduce inefficient media-spend in existing markets and reallocate to China or has a specially budget-line for China

Existing budget lines that have been maximised in existing markets

NOTES ABOUT LANDING PAGES AND CONTENT

We have special approval to use English language landing pages paired with Chinese keywords and adsThis will mean a first stage approach, enabling the launch of existing websites and relying on the user’s browser to translate English to simplified Chinese. There are considerations here which we can examine with you, please contact China Search International for these aspectsWe do recommend that all landing pages be in local simplified Chinese languageHowever, a site launch in English is can facilitate an information gathering exercise while a website is being converted to Chinese languageChina Search International works with strategic partners to facilitate website build and translation, please speak to your point-of-contact for more information

TOP LINE STRATEGY AND KPI’S FOR CLIENTS

TOP LINE STRATEGY AND KPISSt

rate

gise

•Set easy-to-achieve success metrics

•Set the scene for a broad-based approach at the start in a brand new audience

•Use PPC sponsored search and content network in tandem

•Acquisition strategy for PPC and brand strategy for content network

•Consider different themes across all media, for example a consumer, wholesaler and agent/retailer strategy with different goals and messaging for each

•Build in expectations for client•Leverage the resources of China Search International to create China specific Baidu campaign recommendations

Laun

ch

•Use China Search International to assist with creation and launch of program

•Draw on China Search International to suggest semantic translation of existing keywords and also suggest others that are specific to the brand O

ptim

ise •Leverage China Search

International to define optimisation metrics and benchmarks

•Go back to search-101•Refer back to success metrics of the overall program

•Refine based on performance-to-goals

•Look for best performing ads and keywords and expand

•Look for worst performing keywords and pause

•Optimise image/video based creative to goals

• Increase content network bids to maintain max reach across the buy

ROADMAP AND BUDGET PLANS FOR CLIENTS

ANNUALISED PRODUCT PLAN FOR CLIENTS

Launch & Test

Allocate a min spend of $15K for PPCAllocate +50% for Baidu UnionCollect intelligence including ave CPCs, best performing keys, ads, offersStart with a broad based strategy with high max bids, $2 top bid recommendedMax bid of $1 for Baidu Union with RONLeverage China Search International native language keyword recommendations

‘Always-On’ PPC

Allocate a min budget of $15K per quarterStart folding additional keywords into the overall program, from Google, Yahoo, BingLeverage experience of China Search International to add sector specific terms into the program

Baidu Union (Content Network)

Recommended budget-line of +50% of PPC budgetBroad based approach to Baidu Union with RON recommendedPhased approach using video, image based creativeBrand building strategy utalising the extensive reach of the Baidu Union Content Network

Baidu Mobile

Launching in 2013Recommended budget-line of +200% of PPC budgetBroad based approach similar to Baidu Union, with and initial data collection, followed by optimisation and refinement

Brandzone

Recommended for clients with established brands in China, or has used tactical devices such as Baidu products to build

BAIDU ANNUALISED BUDGET ROAD MAP – PER QUARTER BUDGET SUMMARY

Launch & Test $15K

‘Always-On’ PPC $15K per Quarter

Baidu Union (Content Network) $8K per Quarter

Baidu Mobile $60K per Quarter

Brandzone $50K per Quarter

Spends recommended based on min spends per quarter with Baidu as of August 2012, except Content Network

Baidu Sponsored Search - $60K

Brandzone - $200K

Baidu Mobile - $240K

Baidu Union (Content Network) - $32K

BAIDU ANNUALISED BUDGET ROAD MAP – ANNUAL BUDGET SUMMARY

Spends recommended based on min spends per quarter with Baidu as of August 2012, except Content Network

MANY THANKS IN ADVANCE, WARM REGARDS AND BEST WISHESGUY BAXTER, SALES DIRECTOR, CHINA SEARCH INTERNATIONALGUY.B@CHINASEARCHINT.COMDIRECT +61 2 8417 2294MOBILE +61 414 585 254