By Yang Yang(杨阳)
Corporation, Page No.31
Issue No. 537, Sep. 19, 2011
Translated by Li Meng
Original: [Chinese]

 On September 15th, Liu Yun, the Google executive in charge of marketing in China, made another high-profile media appearance to promote Google's advertisement services. He specifically mentioned that Google has passed the annual inspection as an Internet Content Provider in China.

 After experiencing one and half years of twists and turns in China as well as huge pressures from its dwindling in this market, will Google change the focus of its business on the mainland China? "The trump card to be played on the Chinese market won't be its core product of search, but DoubleClick - an ad exchange," said one former employee of the internet giant. In the Liu assessment, the upcoming business of DoubleClick will have even much greater reach than search engine advertising.

Google seems to have found a good breakthrough point. Its new service, as an advertising platform, won't fall foul of China's Internet censorship as long as it "complies with the Advertising Law". Furthermore, since China's online advertising market has lots of room to grow and is experiencing explosive growth, there's no reason why Google shouldn't earn a larger slice of market. Liu thinks it will give Google the opportunity to gain a vital position in the market, perhaps even a leading position that surpasses search advertising.

 Google would dismiss the idea that it intends to "return" to China. Liu claims that Google never actually left, and Google's music, translation and other services have always been around. "In the past year, Google China has made solid progress in certain areas while keeping a low profile," he said. "The quantity of display ads run by Google China's top 50 advertisers doubled in 2010. Ninety-seven percent of the largest 100 advertisers have embraced display ad campaigns. Google's China revenue is growing on a quarterly basis."

 Liu also believes that the market scale of display advertising will amount to 200 billion dollars in the following two or three years with higher potential than search. The range of formats of display ads on which he's basing his optimism includes text, mobile, rich media and video. One of the facts that makes his case is that Google's display network is reaching 96% of Chinese Internet users and providing 6 billion ad impressions each day with over 100,000 partners.

 Google regards it as a "platform product." It all started off with Google's 3.24 billion dollar acquisition of DoubleClick in March 2008, a display ad serving platform that provides tools for advertisers and publishers to show the ads. Unlike the traditional trading mode, it enables advertisers to bid for ad space in real-time on an impression-by-impression basis, so they can deliver the right display ad at the right time at the right price. Across billions of impressions, this can mean significantly increased returns for online publishers.

 Currently, the display ads have enabled advertisers to find more efficient media, offering them an easier way to target their most engaged audiences. Zhou Jie, the founder and CEO of a precision marketing platform Lang Tao Jin, thinks Google's business focus in China will now be focused on promoting DoubleClick which has been very successful in the US.

 "The growth rate of PC web search, still a part of Google China's business portfolio, has slowed down in recent years," said Liu. "While the current mobile Internet has become a higher growth business and a bigger market for Google with almost all tablets and smart phones on the market running Android system, we're working on building a unified advertising platform that will eventually incorporate the ad system AdMob for mobile devices, AdSense for PC and DoubleClick.

 Although we face competition from Baidu, which has the dominant position in domestic PC web search, it looks like all levels of the corporation believe in a new breakthrough in China. Liu believes that traffic is not the only factor for the online advertising business, which also depends on technical support for products. "Google China's future performance will be measured not only by market share and revenue, but by its influence on the China market," adds Liu.