(Yicai Global) Sept. 26 -- Agents of Beijing Baidu Netcom Science and Technology Co. [NASDAQ: BIDU] hard-sell in-feed advertisements to users of China's most popular search engine by requiring them to pay extra money for in-feed ads during ad service subscriptions or subscription renewals. Moreover, agents claim the company's headquarters orders this practice.
In-feed ads are those that appear on news clients or social media interfaces. Whenever a user starts a mobile app, the system inserts a precisely targeted ad after every few messages.
Sina Weibo and Toutiao.com were the first platforms in China to provide in-feed ad services. Baidu followed suit in June last year, adding ads and news below the Baidu search box on mobile phones.
Some Baidu advertisers have been told by marketers that they must pay an extra CNY1,000 for in-feed advertising to renew their advertising service subscriptions or otherwise they will not be allowed to renew. After renewal, the fee paid for in-feed advertising cannot be used for other purposes. This is not an isolated case. Baidu's agents in such eastern Chinese provinces and cities as Henan, Hebei, Tianjin and Jiangsu all reportedly tie in-feed ads with normal advertising services.
Baidu has never proposed or put forward any policies or requirements for tie-in sale of search ads and in-feed ads to its agents, the company countered. Since it launched the in-feed ad service this year, it has received more than 60 complaints lodged against local agents' inappropriate in-feed ad sale practices, and Baidu has properly handled these violations and warned or punished relevant agents based on the severity of the cases, it added.
Baidu will continue to strictly investigate some agents' potential tie-in sale of Baidu commercial products. Once infractions are confirmed, Baidu will sanction such violators and their operating units per contract and deduct deposits or even cancel their agency qualification. This demonstrates that Baidu never allows such behavior that hurts the lawful interests of Baidu's customers or tarnishes its reputation, Caixin reported.