Li Yanhong，Baidu CEOBaidu released it's financial repoart Q3 which shows the overall Q3 income of Baidu is 1,278,700,000RMB(187,283,517 USD), 39% up than Q3 2008. CEO of Baidu, Li yanhong stated that Baidu will help its client to switch to Phoenix Nest before 2009.12.01. That means the former 8-year Baidu PPC system will be closed officially.

To maintain both professional and classic PPC platform is somehow increase the cost of companies, and will hurt the efficiency of promotion campaign.

Li Yanhong said,  70% of Baidu clients are using Phoenix Nest system - the Baidu professional PPC system- and it's the right time to convert its all client to using it.

"Our clients will enjoy the convenience of unique PPC platform. We will have more resources to serve our regular clients and reach out for new clients. " Li Yanhong said. In order to insure the switch-to-Phoenix-Nest goes smoothly, Baidu will launch relevant client promotion project to ease the effect on its short-term income.

More about Baidu PPC Auction Systems 

Baidu PPC Phoenix Nest was launched in April 2009 and has effected on how Baidu PPC ads are displayed.

Baidu’s Two PPC Auction Systems – Classic Edition and Phoenix Nest Edition

Baidu’s PPC ads are served by two distinct auction platforms simultaneously:

■Baidu Classic Edition – Baidu PPC’s old platform
■Baidu Phoenix Nest Edition (aka Professional Edition) – Baidu PPC’s new platform
The two PPC ad auction systems have different ranking algorithms, but together they contribute to how Baidu’s PPC ads are displayed on Baidu’s search engine results pages.

Baidu’s Search Engine Results Pages (SERP)

A typical Baidu SERP first page starts with 10 Classic Edition PPC ads which are followed by 10 organic search results on the left side. On the right side, a maximum of 8 Phoenix Nest PPC ads are shown.

■Left side: 20 search results
■Right side: 8 search results

Another version of Baidu SERP first page without any Classic Edition PPC ad competition shows a maximum of 3 Phoenix Nest PPC ads (with a slightly different background color) on the left side (above organic results). The rest of the Phoenix Nest PPC ads continue on the right side.

■Left side: 13 search results
■Right side: 8 search results

Before Phoenix Nest Edition was launched, Baidu tried to replace the SEO result with a Classic Edition PPC ad at position 10.

Baidu Phoenix Nest Edition

Baidu’s Phoenix Nest ranks ads by including CTR in the ranking algorithm. Baidu Phoenix Nest’s PPC Keyword quality can be optimized by improving CTR of the keywords.

Phoenix Nest’s ads are displayed on the right side of Baidu. A typical example of Phoenix Nest ads that show up on the right side:
 

One exception is that Phoenix Nest PPC ads can also show up above the organic search results, when there is no competing keywords that are matched to the appropriate Classic Edition PPC ads.

Baidu Classic Edition

Baidu’s Classic Edition includes ads’ click through rates in the PPC ad ranking algorithm:

Ad Rank = CTR x Maximum Bid

Classic Edition’s PPC ads are displayed on the left side of Baidu and above the organic search results. Baidu will display up to a maximum of 10 PPC ads at this spot. One exception is that when the spot is competed by more than 10 ads. From the 11th ads onwards, ads will show up on the right side of Baidu after all the Phoenix Nest ads are displayed.

When Classic Edition PPC ads show up on the right side of Baidu:
 

The Classic Edition PPC ads can be distinguished from the typical Phoenix Nest PPC ads by tiny details:

Baidu Huobao text ads previously have been sold to advertisers for fixed annual fees regardless of performance and rooms for optimization. However, Huobao text ads will be phased out.
 

At the end of last year, State-own media CCTV unveiled that Baidu overdo its human-involved SERP, and accused Baidu of Blackmail-Marketing.