Brand Terms: To Bid or Not to Bid? [Bing Ads Study]

There is ongoing debate about the value of including your own brand terms in paid search marketing campaigns. There is a fine line between capitalizing on the additional traffic that ads associated with brand terms deliver, cannibalizing free organic search traffic, and keeping competition off your brand terms. The Bing Ads research team recently published a whitepaper to provide additional perspective and data on this debate. The whitepaper is based on a sample set of data of 50 million impressions in the financial services vertical.

The study found that bidding on your own brand terms can result in higher click yield and can actually bring short-term benefits to financial advertisers. "If advertisers choose not to bid on their own brand terms, they are at risk of losing valuable clicks to their competitors," said Lars Hirsch, lead program manager for Search Demand at Bing. "This dynamic is especially important in an area such as tax, where competing brand’s services are relatively interchangeable and competition is stiff."

Today we’re looking at findings from the study, with a special emphasis on the trade-offs and benefits of bidding on your brand terms:

  • Brand term bidding benefits
  • Brand term bidding trade-offs
  • Methodology of the study

Brand Term Bidding Benefit #1: More Traffic

The study looked at click yield, which is calculated by dividing the total number of clicks by the number of page views garnering at least one impression. Basically, think of click yield as the number of clicks a business receives from both organic and paid search results per 100 searches.

The study shows there are significant benefits to having a paid search ad in the top position (called Mainline 1, or ML1) in addition to the organic result.

  • With an ad in ML1 above the organic search results, brand owners had an 88 percent total click yield (organic and paid). This is compared to 56 percent click yield with organic alone. This means roughly 32 clicks per 100 searches were gained by adding a paid search ad in the top spot. Wow.

The chart below displays total click yield of organic listing alone compared with a combination of paid search ad in ML1 above the organic plus the organic listing.

overall-clicks

Brand Term Bidding Benefit #2: More Clicks for Testing

The big benefit of bidding on your own brand terms is more traffic – an additional 32 percent click yield in the study. There are other benefits as well. These additional clicks give you an opportunity to enrich your statistical significance in testing. Whether you’re testing ad copy or landing pages, additional clicks on your ads gives you more data to work with and to ultimately use to improve your conversion rate.

Brand Term Bidding Benefit #3: Controlling the Conquest

Every click you receive is a missed opportunity for your competitor bidding on your brand. Nice. If you’re outbidding competitors who are bidding on your brand terms (it’s a mad world), you’re also keeping their ads from serving.

In addition to controlling competitor conquesting on your brand terms, you’re boosting your brand impression every time your ad serves. A brand term that is everywhere is a brand term that searchers will remember.

Brand Term Bidding Trade-Offs

But what about the cost of bidding on your own brand terms? Beyond the financial cost, what are the trade-offs? The research shows that when your ad hits ML1, you can end up paying for clicks you may have received anyway from your organic listing. This can be an insignificant nuisance or a critical factor, depending on the difference in number of clicks coming from organic vs. paid.

  • With an ad in ML1, brand owners had an 88 percent total click yield (organic and paid), with 50 percent of clicks coming from paid results and 38 percent of clicks coming from organic results.
  • Without an ad on the search page, brand owners received 56 percent of the clicks from organic traffic.
  • We can deduce that 32 percent of the click yield are clicks we receive due to paid search. And 18 percent of the click yield are clicks from the organic only result, but are now overlapped by the paid search ad.

The chart below breaks down the percent of traffic from paid search ads and organic listings.

organic-and-paid-clicks

Before you despair over this overlap, keep in mind that this overlap also drives opportunities – see above, the brand term benefits two and three.

Ultimately, you have to weigh the value of more clicks, better testing, and brand protection versus the cost of cannibalizing your organic traffic for your business. It’s worth noting also that this study is relatively narrow, focusing on a specific time period in one vertical. Different industries and seasons will have different results in an evaluation like this.

Methodology of the Study

The Bing Ads research team analyzed brand queries for the top three tax advertisers. According to Bing Ads, brand-name tax software searches make up almost 40 percent of all tax searches before taxes are due on April 15.

All data was collected on only PC users searching via Bing, and weighted by impression volume. The data was made up of 98 brand queries across over 50 million impressions in the financial services vertical from January – March 2014.

In addition, queries were also divided into two groups, based on whether a query showed commercial intent or non-commercial intent. Results were compared by advertiser size.

The Conversation Continues

The debate continues, but with a few more data points. The study shows that paid search ads drive net new traffic (especially ML1). And the study reminds us to be thoughtful about our approach if we are in a vertical prone to competitive conquesting strategies.

Tell us: What do you think of the study? You can find the complete whitepaper on SlideShare.