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The Value of Bidding on Brand Terms in Paid Search

October 6, 2010 | Posted at 10:02 am | By The ChannelAdvisor Team

Bigstock_Brand_2611077 If you’ve been in paid search any amount of time, you’ve heard the question that goes something like this:

“Why are we bidding on our brand if we already show in the top position?”

Some people just can’t believe that potential customers would click anywhere but that natural link, and the belief persists that paying extra for these terms is not an effective use of money. Obviously there are arguments both ways, but as with most things in paid search, this is an argument that can be solved with a simple test. We recently did just that for one skeptical client, and the results are definitely worth sharing!

We created a Brand campaign for this client, and ran it for three weeks. We then took that three weeks of natural and paid search data and compared it to two separate, seasonally similar three week periods when the brand terms were not running to get a range of data, and here’s what we saw:

Range Natural Clicks Natural Conv Total Clicks Total Conv
Baseline Period 1 31,857 1,368 45,200 1,473
Baseline Period 2 31,423 1,269 45,555 1,375
Brand Test Period 31,058 976 51,168 1,626

Compared to the two periods without brand terms, bidding on Branded terms:

Decreased Natural Clicks by just 1% to 3%
Decreased Natural Conversions by 23% to 29%

Increased Total Clicks by 12% to 13%
Increased Total Conversions by 10% to 18%

So yes, the paid search results did pull a significant number of orders from the natural links, but they barely touched natural traffic. This means that we weren’t paying for clicks we would have gotten for free at all. Instead, we were paying for extra clicks, and this extra traffic led to an impressive increase in total orders of 10-18%, an amount of revenue that represented an ROI of 12-20x the cost of the campaign itself.

That’s a huge win! It’s not every day that you find a way to increase total search orders by that much, and it’s even rarer to find a strategy as simple as bidding on brand terms to get you there.

Now, for those of you still fighting the good fight, I know it’s not going to be as easy as showing this post to your boss to get clearance for that long awaited brand campaign. Sometimes it is hard to believe that people won’t just click that top natural link, but the fact is, search engines are ridiculously complex and are littered with potential distractions and pitfalls. Competitor’s paid and natural results, shopping results, review sites, coupon sites, and other “places of interest” are all lurking in the search results, waiting to pull in your potential customers and prevent them from making that final order. When you couple that with the nuances of language and the idiosyncrasies of people in general, you are left with a situation where you need to be doing everything you can to get the people who have searched for you to your site as quickly as possible.

If you’re still having trouble winning your boss over- run a test! Build a brand campaign and run it for long enough to get statistically significant data (at least 2-3 weeks). Once you’re done, compare your traffic and orders to similar time frames and see what effect the brand terms had. If you see anything like the retailer in our test, take that number to your boss and thank me later!

 

Written by Kevin Hill,  Search Account Associate