Baidu says hospital chain is threatening its clients as advertising spat gets uglier

Chinese search and advertising giant Baidu has, for weeks now, been embroiled in a public conflict with Putian, an industry group that represents thousands of hospitals in China. After Baidu announced that it was cracking down on medical advertisements containing what it considers to be false or misleading health information, Putian announced a boycott of Baidu that could cut significantly into the company’s revenue in the short term.

But now, it seems Putian has taken things a step further. On Tuesday evening Baidu Advertising’s Weibo account posted an update that says some of Baidu’s other advertising clients have started receiving threats from Putian or agents claiming to represent Putian, asking them to stop advertising with Baidu. The post includes screenshots of conversations between Baidu clients and people claiming to be from Putian making threats. One of the more extreme conversations threatens physical violence, but most of the threats suggest that Putian has hired an “army” of online workers to click on the Baidu ads of hospitals that haven’t joined the boycott, driving their advertising costs through the roof without generating any revenue.

“We’re the Putian army,” reads one thread, “And we’re going to bury you with clicks. Believe me?”

When the Baidu client responds with ridicule, the guy continues: “Then just wait and see.”

Baidu says that it has already reported the threats to the police and is cooperating in the investigation. It says it has also implemented a technical solution to prevent malicious clicks from running up a clients’ ad bills, and that it will not surrender to this “gangster behavior.”

It’s unclear whether the people making these threats actually represent Putian. In the Chinese internet industry, it certainly wouldn’t be unheard of for a competing company to take advantage of the situation like this to try to weaken Baidu’s position in the online advertising market.

But whether the threats are really coming from Putian or from a competitor, the long-term results are likely to be good for Baidu. While the loss of Putian’s business will cut into Baidu’s revenue in the short term, in the long run cutting out misleading medical ads – which have been a major driver of complaints about Baidu’s ads for a long time – should boost consumer confidence in the ads that remain, increasing their value.

(h/t to Techweb)