BAIDU HANDED OUT THE "IRON RICE BOWL" TO ITS AGENTS! CANCELS EXCLUSIVE REPRESENTATION MODELS IN SIX CITIES, INCLUDING JINAN, CHONGQING, WUHAN, FUZHOU, AND XIAMEN, AND ADOPTS SERVICE PROVIDER OPERATION MODEL

Author: 《BUG》 Column, Wu Wenming

BAIDU has been exposed to launching adjustments for its agents, which will cancel exclusive representation models in six cities, including Jinan, Chongqing, Wuhan, Fuzhou, and Xiamen, and adopt a service provider operation model. Although BAIDU has not officially confirmed this information, insiders have revealed that the company is indeed adjusting its commercial strategy and changing its total agency model to a common agency model.

This adjustment has left many agents who have relied on BAIDU for years "shaken" and some have already been severely impacted.

Sources close to the company revealed that Shandong Kai Rui Group, once BAIDU's second-largest advertising agent, had started to delay paying salaries to its employees. Employees pointed out that the group had lost its exclusive agency protection and was now facing intense competition from other agents.

Industry insiders attributed the difficulties faced by advertising agents to their own operational and business capabilities rather than changes in BAIDU's commercial strategy. However, many core agents have been experiencing difficulties, which may reflect a deeper issue – BAIDU's advertising business is no longer thriving.

According to BAIDU's 2025 Q1 financial report, online marketing revenue reached RMB 160 billion, down 6% year-on-year. Although advertising remains the core driver of BAIDU's revenue, its growth momentum has already slowed.

A former No. 2 agent teeters on collapse

"Jinan High-tech Zone Ka Rui Group and Ka Rui Cloud have stopped paying wages, and the company's financial department is unreachable," said employees of the group. Many employees were affected by this situation, but the company has not provided a clear explanation. As of press time, the group had not responded to inquiries.

Some employees believe that the reason for these developments may be related to "BAIDU's agent model change."

Ka Rui Group was once BAIDU's second-largest advertising agent and a listed company. As of the end of 2024, Ka Rui Group accounted for over 95% of its revenue from digital marketing business income. The company had publicly acknowledged in its annual report that "the company's business is heavily dependent on BAIDU, and if the company's cooperation relationship with BAIDU changes, it will increase the risk of fluctuation in the company's future performance."

Unfortunately, BAIDU's cooperation relationship with Ka Rui Group has changed recently.

Sources close to the group revealed that "recently, Ka Rui Group is no longer BAIDU's exclusive agent in Shandong Province, but rather a regional service provider."

In the eyes of Ka Rui Group employees, the company has lost its exclusive agency protection and is now facing intense competition from BAIDU's direct operations and other agents. In this situation, "the era of getting by is over."

BAIDU's advertising business is no longer thriving

In the previous month, insiders had reported that BAIDU would be launching adjustments for its agents, which would cancel exclusive representation models in six cities, including Jinan, Chongqing, Wuhan, Fuzhou, and Xiamen, and adopt a service provider operation model. Although BAIDU has not officially confirmed this information, combining Ka Rui Group's change with the agent model change, it is possible that this adjustment has already taken place.

BAIDU insiders also told the 《BUG》 column that "the company indeed has a commercial strategy adjustment and will be changing its total agency model to a common agency model."

In an earlier report, Wuhan Century Century Network Technology Co., Ltd., BAIDU's total agent in Hubei Province, announced that "with the changes in BAIDU's channel model and the company's business cooperation about to terminate," the company has lost its core revenue source and is facing insurmountable operational difficulties. It was unable to find a new direction to support its development and ultimately had to initiate liquidation proceedings.

Industry insiders attribute the difficulties faced by advertising agents to their own operational and business capabilities rather than changes in BAIDU's commercial strategy. However, many core agents have been experiencing difficulties, which may reflect a deeper issue – BAIDU's advertising business is no longer thriving.

According to BAIDU's 2025 Q1 financial report, this year's first quarter, BAIDU's core revenue reached RMB 255 billion, up 7% year-on-year. However, online marketing revenue reached RMB 160 billion, down 6% year-on-year. Although advertising remains the core driver of BAIDU's revenue, its growth momentum has already slowed.

Just a month ago, Fidelity also made a negative evaluation of BAIDU's second-half advertising revenue growth. According to an analysis report by Fidelity analysts, with BAIDU's rapid enhancement of AI search capabilities and continued low sentiment in advertising expenditure, Fidelity will lower its forecast for BAIDU's core advertising revenue in the second quarter and third quarter by 6.1% and 8.9%, respectively. The negative impact on BAIDU's future performance has also led to a 21% reduction in its expected core operating profit in the second quarter and a 24% reduction in the third quarter.

Wuhan Century Century Network Technology Co., Ltd., Ka Rui Group, and other agents that have experienced difficulties are serving as a warning to more BAIDU agents to accelerate their transformation.

In the era of Douyin, Xiaohongshu, WeChat, and other super apps continuously eating into traditional search advertising shares, Quark, Bean, kimi, and other new AI search engines are constantly redefining the search experience, thus overturning the search industry's landscape. At this moment, BAIDU is facing intense market pressure, which has forced it to start thinking about "reform and innovation."

In the eyes of industry insiders, "recent changes in BAIDU's search have made 'the biggest adjustment' in the past decade. The commercial strategy adjustment may be aimed at adapting to the new search landscape." Although "search adjustments will undoubtedly affect advertising revenue," from a long-term perspective, it is also a manifestation of BAIDU's efforts to improve user experience and lay the groundwork for future development."

Perhaps, for more BAIDU agents, the era of following Lee Huan-ming's "wind and cloud" has come to an end. They will have to face the challenges of exploring new business models, transforming themselves, and finding new directions.

Source: Sina News