BIDU(US:BIDU) 3 6 Ke·2025-08-19 03:42Core Viewpoint - Baidu is reportedly undergoing a significant adjustment in its advertising agency model, transitioning from exclusive agency arrangements in several cities to a service provider model, which has raised concerns among its long-time advertising partners about the sustainability of their businesses [1][5]. Group 1: Agency Model Changes - Baidu has decided to eliminate the exclusive agency mechanism in cities such as Jinan, Chongqing, Wuhan, Fuzhou, and Xiamen, shifting to a service provider operation model [1][5]. - The change in agency model has led to significant distress among existing advertising agencies, with some, like Shandong Kaichuang Group, facing severe financial difficulties and employee salary delays [2][3]. Group 2: Impact on Advertising Revenue - Baidu's Q1 2025 performance report indicated that online marketing revenue was 16 billion yuan, a year-on-year decrease of 6%, highlighting a decline in the growth momentum of its core advertising business [2][8]. - Analysts from Citigroup have downgraded Baidu's core advertising revenue forecasts for Q2 and Q3 by 6.1% and 8.9%, respectively, due to a weakening advertising business outlook [8]. Group 3: Broader Industry Implications - The operational challenges faced by multiple core advertising agencies suggest a deeper issue within Baidu's advertising business, indicating a potential downturn in the overall market [2][8]. - The rise of competing platforms like Douyin, Xiaohongshu, and new AI search engines is intensifying the pressure on Baidu's traditional advertising model, prompting the need for strategic transformation [8][9].