To Bid, Or Not To Bid…

At High Position we take ROI seriously and aim to use PPC budgets as efficiently as possible, generating cost effective clicks, which convert well and achieve a healthy CPA. One topic we are constantly debating with clients is the process of bidding on branded terms when a site is organically in the top spot. So, I thought it was about time that I dig deep for the reasons in support of, and against bidding on brand terms and compare them to studies conducted by Google and independent sources – as well as our very own test which is in the making!

Pro Bidding on Brands

“Maximise your presence and dominate above the fold search results”

Google is gradually moving further towards an above-the-fold domination of paid results – strangely enough this will probably mean they will generate more revenue as users are manipulated to choose paid results! By offering more and more ad extensions, this allows paid adverts to take up more space, and generate more Google revenue. But…these are also very advantageous to advertisers. By making the most of the various extensions we can take up hundreds of extra ad pixels – for free! The more screen space you can own, the more likely you will be to catch the attention of searchers and generate more clicks.

“Control and tailor your message – as often as you want to”

We all know that a good meta description can improve organic visits – but the reality is that in 160 characters we need to summarise the organisation and slip in a few generic keywords for SEO benefit. We can’t promote every offer or work in real time with whatever is “hot” right now – instead we let Google decide what to list, hoping they will use a well written meta description. Another feature of paid ads is having total control over content, allowing you to promote offers, test call to actions and master the appeal that’s needed to keep improving Click Through Rate.

“Tell people lots of things in one ad”

With Ad Extensions, you can not only try to dominate the page, you can provide several other options and cover all bases. From additional, helpful, links to telephone numbers and printable coupons you can try giving them exactly what they want in an advert –a lot more appealing than an organic listing I’d say!

“Prevent your competitors from stealing your business”

Unfortunately, you can’t stop people from bidding on your branded keywords. It might cost them a lot due to having a low quality score but not competing with the competition is as bad as letting your competitor hand out “buy from us, not them” flyers to customers as they go to walk through the shop door.

“Is your brand name ambiguous?”

Some brands have less unique names and find themselves fighting for organic stability! If this is the case, the best way to stand out and secure first page visibility is to bid on branded terms. Make sure people know they are clicking on the right link and finding exactly what they are meant to find!

“Improve your quality scores by upping CTR”

Part of Google’s quality score algorithm uses previous ad success – or Click Through Rate to deem whether your ads are what people want to see! After all, the more people want to click on a set of ads, the more money Google will make! So, how does this help your campaign? By using branded campaigns – which typically have the best Click Through Rates, your whole campaign can over-time achieve better Quality Scores. Better quality scores mean lower CPCs and better Average Ad Positions! Siddharth Shah explores CTR v.s. Quality Score in more detail here.

“Professional Appearance”

Some brands argue that web users expect “good brands” to be present in paid and organic results. Theory suggests this instils more trust in a search user as the brand is visible in two areas – meaning the brand must be doing something right?!

Against Brand Budget

“Why waste budget when they will find us anyway?”

Sure, you will be there in the first spot for your brand organically so if people want to particularly use your service or find your product then maybe they will look for your organic listing. If this is the case, then a chunk of PPC budget can be freed up to target new customers who are searching with generic keywords. We are also all familiar with the logic that says keeping a customer coming back is 10 times easier, and cheaper, than going after new ones! Plus, a large proportion of searchers will only click on organic listings which have earned their way to the top, but, when Google is gradually dominating above the fold results with paid listings, will it take much for a fickle audience to click on the first thing that ticks their boxes?

“Bidding on brand will only upset my affiliates”

A fair point indeed! Having a naturally great quality score (because you are the keyword!) will most likely mean that any affiliate sites will have to pay a higher CPC. But, on the plus side, having your brand in the mix will reduce the chances of clicks going to competitors as much as their chance of gaining more clicks.

Proof is in the Pudding

So, the arguments are solid, but where is the evidence and who has done their research?

Several companies – including Google – have conducted tests and found the following results which concluded that overall search revenue increases with both paid and organic presence.

So, here is what Google says: 

But we also dug around for some less bias results:

From PPC Associates:

“…test shows that brand keywords increased total brand conversions (SEO+SEM) by around 10% even though competition was rare on both paid and organic listings”

From Econsultancy:

“… investment in brand paid search delivers incremental revenue. As soon as we paused the ads, the total revenue from search dropped and wasn’t fully compensated via other channels”

From Enquiro Research:
“When a brand name is the top result in both natural and paid search results, 83% of consumers looking to buy would consider a purchase. Without paid search, however, the same brand name as the top result in organic search only obtains 73% purchase consideration”

But, does your industry matter?

So, AdWords textbooks say that bidding on branded keywords is a no brainer. But is this really true for all industries, and all companies? What about the small proportion of monopoly industries – and do such things even exist?

We are examining the common arguments against bidding and will be testing the theories on a duopolistic client who has one direct competitor and a bunch of affiliates which all sell their product anyway. So, what better way to determine if investment in brand terms is worthwhile? Will the ROI for “lost” traffic captured via PPC be worthwhile for the ad spend for all branded PPC?…Will it only be worth bidding on branded terms during offer periods?…Wow! There are so many questions we could potentially answer here!

Keep checking back here, where we will keep you posted and update you with the results in the next couple of months!