New Regulations for Online Ads in Effect in China

New regulations for online advertising took effect in China on Sept. 1 and the new rules will affect all online publishers (ecommerce sites, search engines and programmatic advertising) with a presence in China.

For search engines, the regulations (Note: Linked page is in Mandarin) require paid search ads to be clearly differentiated from organic search results. Further, ads must be clearly identifiable to the user and not interfere with the normal use of the network/website. For example, pop-up ads must have a prominently marked “close” sign so users can easily close out of them.

Baidu SERP example

In addition, internet advertisers are now responsible for verifying the authenticity of an ad’s content as well as the legitimacy of the business itself. Advertisements from more regulated industries, such as healthcare, food, medical equipment, veterinary medicine, and health supplements will be under further scrutiny, and must adhere to the laws regulating those industries.

The regulations also cover social media advertisements, including those endorsement posts by social influencers, according to the Wall Street Journal. These type of posts must clearly indicate they are sponsored advertisements.

The new regulations offer clear guidance to businesses and advertisements in what was previously a largely unregulated industry. “Before this, there was no law that defined exactly what an internet ad was, and the regulations were a bit piecemeal,” said Eugene Low, a partner at the Hong Kong office of law firm Hogan Lovells, told the Wall Street Journal.

The regulations went into effect on Thursday, Sept. 1 but it’s still premature to see what the full impact on publishers, advertisers and users will be.

However, some in the industry believe the new regulations are a positive move for marketing and the online advertising and search marketing industries in the long-term.

“The government is trying to get a hold of a fast-moving segment of the internet. This new move will create a more transparent business environment for major players and will lead to a more favorable development of the industry,” Faith Gao, a programmatic director for Performics, told ClickZ.

Recent Baidu Paid Advertising Changes

Earlier this year (in late May) Baidu made significant changes to the structure of its paid advertising. This included limiting the amount of ads that appear on the search engine results page to 30 percent, as well as clearly differentiating ads and organic search results.

Before this change took place, there was no limit to the amount of ads displayed on a SERP, now there is a maximum of four ads on a page and ads on the right hand side of the page have been removed.

“With other agencies, the tendency is to see a flurry of work initially, and then communication and accountability starts to fall off. Our KoMarketing account team is in contact with us almost daily – it’s like they’re sitting right here in our office. They’re truly an extension of our marketing team.”

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