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Baidu has been making key changes to their pay-per-click (PPC) system, which has made the search engine more user friendly and more similar to Google. If you want to optimize your PPC on Baidu, take note of these changes:

As of Dec. 1, 2009, Baidu has retired their old PPC auction system, the Classic Edition. Now all PPC keyword bidding is done through their new system, Phoenix Nest.

The Classic Edition system was not convenient in managing large campaigns with thousands of keywords or more, because the old interface was not user friendly. The old way of keyword bidding was mainly based on keyword cost-per-click (CPC). The new Phoenix Nest system looks and operates more like Google Adwords; the interface is more user friendly and is very suitable for large campaigns.

The keyword bidding system in Phoenix Nest is now based on Baidu PPC keyword quality. Users should focus on optimizing their Baidu campaigns to maximize keyword quality, in a similar fashion to Google Adwords keyword quality optimization. However, there are no significant changes in the display of Baidu Search results. Here is how the display currently looks:

Search results on high traffic keywords:
Left side:10 PPC ads, then 10 organic search results
Right side: 8 PPC ads

Search results on long tail keywords:
Left side: 3 PPC ads, then 10 organic search results
Right side: 8 PPC ads

Search results on keywords with low traffic:
Left side: organic search results
Right side: 8 PPC ads

Baidu has also launched its PPC editor, Baidu Editor 1.0, which is similar to Google Adwords Editor. This tool enables advertisers to create/edit campaigns, ads, ad groups, and keywords offline. Baidu Editor is very beneficial to Baidu advertisers that manage large campaigns.

These two significant upgrades to the Baidu PPC system are going to help Baidu greatly in maintaining their market share in the ever-competitive China search advertising market. Combined with the resignation of Google China President, Lee Kai-Fu, who was mainly responsible for the increase in search market share for Google China, it will be very interesting to see how the battle for the China search market pans out.