One of China’s tech titans, Baidu, is pursuing a new global business twist that takes the Beijing-based search company far away from its roots in search to Hollywood movie promotion, Madison Avenue advertising and social media.
It sounds far fetched, and the timing might be better given US-China tensions. But Baidu is making a play beyond China and is gaining traction with its latest outreach that blends search, artificial intelligence, advertising and media overseas.
Baidu has recently aligned with social networks Snap, Reddit and Pinterest, and movie producers Sony and Paramount among others in about a dozen sales partnerships. Baidu’s distinct strategy for a global business unit is part of a trend of Chinese technology companies going beyond their country border and transitioning from their original core line of business.
Like others within China’s BAT or Baidu, Alibaba and Tencent, the template is to enlarge the ecosystem and boost overall business. Baidu, for instance, has morphed from paid search into other technologies such as autonomous driving and voice-powered smart home speakers, projectors, and lamps. The BAT companies have all pumped up their overseas operations through acquisitions and investments in U.S. tech companies, but now those deals are under close scrutiny by regulators and the action has slowed considerably.
Baidu’s charged up overseas effort could be seen as a stretch for the company, which has been largely focused on China except for some offerings in Japan, including a discontinued search engine for the Japanese market. This new business strategy is run through a global business unit led by Charles Zhang in Tokyo since 2015.
Through an ad platform MediaGo housed within this unit, Baidu is connecting Chinese outbound advertisers to global media partners to optimize their digital marketing campaigns. This Baidu unit is also helping producers promote their film releases with keyboard apps for smartphones directed to consumers.
For example, Baidu has worked with Sony this year to promote several films: Spider-Man: Far From Home, Men in Black: International, and Angry Birds Movie 2. In 2018, Baidu helped Paramount Pictures promote its Bumblebee movie in the US and China.
How does advertising and movie promotion relate to Baidu’s core capabilities? It stems from Baidu’s online search business that relies on artificial intelligence functions to direct queries. In effect, and like Google, Baidu is an AI-driven marketing company that uses AI algorithms for advertising objectives, for precise targeting and performance measures of ads. This mix of search and advertising is linked to the DNA of Baidu, Zhang explained. For instance, AI features that are baked into its offerings are machine learning to predict words as users type and speech recognition for accurate voice-to-text transcriptions.
Baidu has three keyboard-formatted apps that all use AI technology for more precise digital marketing options such as promotional stickers for branding and augmented reality emojis, a feature that creates an animated version of yourself.
These products within the small, focused global business unit are gaining traction. Baidu’s keyboard apps have reached 40 million daily active users worldwide. The Bumblebee AR emoji that Baidu developed for Paramount was downloaded 4.1 million times in two weeks.
Meanwhile, Zhang noted that the China outbound advertising business is still growing in the midst of the U.S.-China turmoil over tech and trade issues. Baidu is in discussions with more marketing partners and studios to grow this niche, cross-border business.
Baidu’s home base remains digital advertising, a field in China that eMarketer estimates to have grown by 26.5 percent in 2018 to $62.6 billion. Baidu remains China’s search leader and its revenues grew by 28 percent in 2018 to $14.9 billion, but as pointed out in Tech Titans of China, this B of the original Baidu, Alibaba and Tencent or China’s BAT, has lagged among the original tech titans of China in its expansionary moves.