Why over-bidding on your brand could be hurting your bottom line

Paid search ads have long been a cornerstone of brand protection for marketers. However, this strategy may prove costlier than necessary, especially when organic search results can achieve similar outcomes. This article explores the evolution of brand search strategy and offers a more data-driven approach.

The Shifting Sands of Brand Search Investment

The prevailing wisdom regarding brand term bidding has undergone a significant shift. While a 2011 Google study suggested that paid search clicks weren't easily replaced by organic clicks, this research had limitations. It primarily focused on highly competitive auctions, overlooking scenarios where brand ads, even without competitors, consume budget that could be saved.

More recent research and practical experience challenge the earlier findings, particularly in less competitive markets. Instead of aggressive brand bidding, a more selective approach, informed by actual competitive landscape, is now recommended.

Understanding User Behavior in Branded Searches

Effective brand search strategies hinge on understanding user intent. Users searching with branded keywords, especially longer-tail queries, often demonstrate high purchase intent and brand awareness. In such cases, organic search results frequently perform exceptionally well, particularly when the query aligns perfectly with user needs. For example, a search for "Acme widgets replacement parts" shows strong brand loyalty and less need for paid advertising.

Debunking the Myth of Brand Conquesting

The fear of competitors "conquesting" brand terms—stealing traffic by bidding on a brand's keywords—is a common argument for heavy brand bidding. However, data consistently shows that competitor conquesting campaigns often yield poor return on ad spend (ROAS). Users are remarkably resistant to competitor offers when searching for a specific brand. This suggests that the threat of competitor conquesting may be overstated.

Smart Brand Bidding Solutions

The market is responding to the need for more strategic brand bidding with innovative tools that monitor competitive presence in auctions and automatically adjust bids accordingly. These solutions offer real-time competitive analysis, automated bid adjustments, and detailed reporting on brand term cannibalization. Using such tools, significant cost savings (up to 20%) have been observed without impacting overall revenue.

The Diminishing Control of Advertisers

Recent platform changes, particularly concerning keyword matching and brand traffic, have reduced advertiser control. "Exact match" keywords are less precise, phrase match behaves more like broad match, and Performance Max campaigns often include brand terms without explicit advertiser consent, leading to unintended spending on competitor brand terms. This shift towards increased platform automation can inflate the perception of competition.

When Brand Bidding Remains Strategic

Despite the arguments for reduced brand spending, there are specific situations where brand bidding remains valuable:

• Reputation Management: Controlling search results during reputation crises.
• Time-Sensitive Promotions: Highlighting flash sales or limited-time offers.
• Product Launches: Driving traffic to new product landing pages.
• Intense Competition: Maintaining SERP dominance in highly competitive markets.

A Holistic Approach to Search

Evaluating brand bidding in isolation is insufficient. A holistic view encompassing paid, organic, and all other channels is crucial. Often, organic listings could capture clicks currently purchased with paid ads. Performance Max campaigns further complicate this by obscuring data.

A Smarter Path Forward

The key is to question default settings and conduct thorough testing. Geographic split tests often reveal that regions without brand ads perform equally well, with organic search filling the gap. Before committing to brand campaign budgets, consider:

• Your organic search strength.
• Whether competitor activity is genuine or a result of broad matching.
• The potential ROI of allocating those funds to acquiring new customers.

The goal isn't to eliminate brand bidding, but to refine it into a more strategic, data-driven approach. This will not only improve efficiency but also please the CFO.

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