Asking the Right Question
More often than not when a company is buying paid search ads they include their brand name in their list of keywords. At first glance it seems like the right thing to do. After all, paid search ads show up on the top of search engine results. If someone is looking for your brand you want to be there right? The answer, of course, is yes. However, do you want to be there is not the right question. The question is should you pay to be there? The answer? It depends. Here we will dive into the scenarios where it does and does not make sense to bid on your brand name. We will also debunk some common myths and misconceptions about bidding on your brand name.
The Case to Bid on Your Brand Name
There are a few scenarios where bidding on your brand name should be done. If any of the following criteria is met, we recommend bidding on your brand name:
- You do not have the top organic ranking for your brand name
- Competitors are bidding on your brand name
- Your brand name is generic
- Examples: Dawn, Cascade, Bounty
When looking at paid search reports, branded campaigns are almost always the top performer. They have the lowest CPC's, the highest conversion rates and the best ROI. So if you don't fit any of the above criteria and are seeing such great numbers from your branded paid search, why on earth would you stop buying your brand name? Keep reading and we will show you.
The Case Against Bidding on Your Brand Name
More often than not it is not necessary to bid on your brand name in paid search. The one big thing most people don't factor in when looking at branded paid search campaigns is incremental value. Even though a branded paid search campaign may look great and show strong ROI, if you do not meet the criteria discussed earlier then you are paying for something you could have had for free.
This screen shot of a search for Under Armour on Google is a perfect example of wasted ad spend. As you can see they have a paid ad at the top of the page. What you will also notice is if that paid ad was not there they would still have the top of the page with their organic listing. Below that organic listing is a link to their Twitter page. They also have the knowledge graph to the right. As you can see, a person searching for Under Armour is going to get to the Under Armour website regardless of if they bid on their brand name or not.
Why are so Many Companies Wasting Money Bidding on their Name?
Why are so many companies like Under Armour wasting money bidding on their brand name? These companies are big and smart, surely they have a reason for it. We have found two main reasons why a company bids on their brand name when it is not needed:
- Their paid search and SEO teams are not integrated and from a paid search perspective the performance is strong. This is very common and shows the need to look into higher level metrics and have all digital marketing teams integrated.
- The agency is incentivized to spend money. Many agencies charge clients a percentage of their spend as a fee for paid search. Aside from the accounting issues this creates every month, there is a big flaw in this fee structure. It incentivizes the agency to spend the clients money. After all, the more the client spends, the more the agency makes. If you take out branded spend not only will the agency make far less money, but their paid search performance reports will get a lot worse. Although this would improve their SEO performance, SEO is typically billed as a flat fee so the agency would not make any additional money off showing improved performance.
We strongly recommend against working with any agency that charges a percentage of spend. Although some agencies are honest and do good work, there are many that will take advantage of this fee structure.
Summary
More often than not, companies do not need to buy their brand name in paid search. With that said many companies still do so. With any client we always recommend testing before pulling spend out of a campaign that is performing well. However, the test needs to be comprehensive enough to include all other channels. This will enable a full analysis of the incremental benefit that bidding on your brand name provides.
If you are unsure whether or not you should bid on your brand name contact us today for a free assessment.