I’ve been thinking about this topic for the last few months and have been dealing with it ever since I’ve started in this industry. I was going to hold off on writing about it, but a post from PPC Blog got me to go ahead and just post my thoughts on the subject.
While managing paid search for large, well known brands who receive lots of very efficient volume from their brand terms, I’ve always been annoyed by affiliates and even competitors bidding on “my” (client’s) brand terms. Some clients seem to take action right away with these partners, either taking away commissions or outright kicking them out of the program while others seem more lackadaisical about it and just give out multiple warnings before really taking any hard stance against the affiliates who are breaking the t’s and c’s.
PPC Blogger’s opinion is that he’s completely against it and that many of the reasons given to him in support of brand bidding, even for a select few affiliates, are flawed. He points out that the logic is usually flawed because of ignorance, trust in tracking and affiliates, brand ownership, lack of control and a higher CPC caused by your affiliates competing against your brand.
I’ve always agreed with his stance for pretty much those same reasons, although it wasn’t until recently that I’ve been thinking about it from a slightly different angle for a select few cases.
As a side note, I haven’t had the opportunity to ever test this theory, but I think it at least would warrant testing.
First, I feel very strongly that you should never openly allow all of your affiliates to bid on your brand. Due to lack of control, ability to monitor and possibility of a negative influence on your brand name, I don’t think anyone should have an open policy on their brand terms.
A second issue, that isn’t mentioned in PPC Blogger’s post is the display URL and destination URL. For these, you should not allow any of your affiliates to use them for the above reasons, but also because they can overtake your own ads and can end up having a negative affect on your quality score in Google. I believe Amazon actually allows their affiliates to use direct linking and many times I see ads that are poorly written or inaccurate.
Who Would I Allow to Bid on Brand Terms?
What I would allow would be to allow brand bidding for a select few affiliates (probably only 3-5) that, not only are high performers, but also trustworthy. The high volume aspect is not only because it is a reward, but also because they have put a vested interest in your business. While there are times when they can easily switch their site around to market for another brand, giving them this extra bonus can help solidify the relationship and get them to work harder for you. Being able to trust them is also crucially important so that they aren’t breaking the guidelines you set for them.
Why Would I Allow Brand Term Bidding?
If your industry has many big name brands who are all bidding on each other’s brand terms, then even though most of the searchers are still going to your site, you’re losing some to the competition. As you know, if you’re in position #2, you will get a lot more clicks than if you’re in position #8 or not even on the first page. Since Google (specifically) only allows advertisers to have one ad displayed (for good reason), you’re competitors can show up right below you, sometimes in the yellow bar, and take away clicks and customers from you. If they’re in the yellow bar, this also shows that they most likely are having a high enough CTR to be up there in the first place which is an even greater threat.
If you allow your affiliates to bid on your brand terms, making sure that they don’t set their bids too high (increasing your CPC too much) and don’t show up ahead of you, then you should be able to create an ad blockade against your competition. If you’re able to have your official site in position #1, with affiliates in positions 2-5, then you stand a much better chance of keeping your competition away from your current or potential customers.
This is also where the trust factor comes into play. You’ll need to be able to trust that the affiliates you choose to bring into this program will abide by your rules.
Rules and Guidelines
- Ad Copy & Landing Pages
Some brand are more strict than others in terms of brand protection and also legal issues. If you’re a financial company like E*Trade, where any creative change on your ads, landing page, etc. have to be first approved by your legal department, then you’ll have to have very strict guidelines to do this (although I doubt this strategy would ever get approved with a company like that). However, if you’re a Match.com or Gateway Computers, then you can probably just have whoever is in charge of the program approve any ads before they go live. The landing pages would probably also need to receive approval so they present a consistent and accurate message. - Bidding
Like I’ve stated previously, you’d have to make sure that your affiliates don’t show up higher than your ads and aren’t bidding too high. A specific CPC limit might be necessary, but would have to be determined on an ongoing basis. It could also be added in the conditions that using the excuse “the algorithm decided that we were more relevant and placed us higher” will still get you removed from this special program. - Payout Structure
PPC Blogger pointed out in his comments that the payout structure would most likely also need to be shifted lower for these keywords since providing the highest level payouts for these types of keywords would most likely lead to a negative ROI overall.
When Not to Use This Strategy
This strategy isn’t for everyone. If you don’t have any competition on your brand, then there’s no point of adding competition. If your brand isn’t very big, then adding a lot of competition may cause your own CPC to rise too much making it not cost efficient in the end. Also, like the E*Trade example, if your company is very strict about it’s brand or has to abide by certain external guidelines, then it may be too difficult to use.
Conclusion
This is mainly just a theory I’ve been thinking about recently that I believe could give a performance boost to a company in a similar way that being shown in both the organic listings and the paid listings can (can’t find the reference).
The biggest factor in terms of overall performance is whether or not the increase in costs caused by your affiliates will efficiently lead to a net increase in customers. The next biggest factor, brand reputation should be covered if you have partners you can trust and manually approve their listings.
There are actually some companies that seem to be doing this, conduct a search for Time Warner Cable. I’m assuming it’s effective for them - or maybe they just aren’t tracking very well, but either way, if Comcast or Verizon tried to start competing on the term, it’d be pretty tough for them to get any worthwhile volume out of it without having a very high CPC.
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