PPC brand bidding – to bid or not to bid?

It is not uncommon for Pay-Per-Click advertisers to invest in a Brand campaign, in which the advertiser bids on their own brand name. Quite often such a campaign becomes the bread and butter of the entire PPC account, as the majority of leads and/or revenue is generated through the advertiser’s own brand terms.

In such a setup, it is not uncommon for the advertiser to question the value of paying to bid on their own brand name. After all, why should you pay for people to arrive on your website when they are already actively searching for your brand? Surely these people will simply scroll down the Google paid listings and find your organic listing, or type in your website address into their browser’s address bar?

Unfortunately not – in reality people’s browsing behaviour isn’t quite so simple, nor is their loyalty. And whenever a client requests that we pause their brand campaign, we must quickly inform them of why this is seldom a wise decision.

Multi-Channels, Multi Campaigns

Firstly, consider a PPC campaign that consists of multiple campaigns, each targeting specific search terms and products. In an ideal world, the customer will simply see a PPC advert, click on it, and convert into a lead or purchase. In reality the path to completing a purchase isn’t quite so straightforward, and users shift between different campaigns and mediums, whether from PPC to Organic, or from Organic to a Direct visit – each user exhibits unique shopping behaviour.

In the following example, a bike store generates the majority of their online sales through Google Adwords. Let’s call our retailer Bob's Bike Emporium. Bob is currently questioning why he should continue running a brand campaign – Adwords consistently shows that the top search terms that generate a sale are his own brand name.

However, further analysis shows that the majority of customers actually discovered Bob’s Bike Emporium through the Bicycles campaign – people searching for the terms 'bicycles', or 'cheap bicycles', for example. They then later converted by carrying out a search for the shop’s brand term.

The following chart shows the top paths Bob's customers took when they completed a purchase:

What we learn here is two key facts: firstly, the above data reveals that PPC is driving the initial awareness of Bob’s Bike Emporium, generating a significant amount of sales. Were Bob to pause his PPC campaign entirely, he would have lost a significant amount of revenue.

Secondly – and very importantly – Adwords will typically show the Brand campaign as being the top performing campaign, because this was the last campaign the customer clicked on when they completed a purchase. In reality, however, customers initially discovered Bob’s Bike Emporium through the Bicycles campaign.

So What’s the Point of the Brand Campaign?

At this point many advertisers will question what the benefit of having a Brand campaign is when the Bicycles campaign, which targets broad bike-related terms, is driving the initial awareness. Why pay for an extra click if the customer is likely to purchase farther down the road?

The reality is that today’s shoppers are Internet savvy and are unlikely to feel guilty taking their custom elsewhere. Forget customer loyalty – people are constantly looking for a bargain. And Bob’s competition is all too aware of this fact.

Enter Holly’s Bike Palace – Bob’s main competition, which is located at the other side of town. Holly also drives a significant amount of her sales via PPC, and is currently hosting a sale of up to 25% off all bikes purchased online before the end of the month.

Here is what the Google sponsored ad listings look like when a potential customer types in a search for ‘bob’s bike emporium’:

Holly is bidding on Bob’s own brand terms. And because Bob is neglecting any form of bidding on his own brand name, the prospective customer would have to actively make an effort to scroll down the Google search results to locate Bob’s website.

Unless Bob was VERY price competitive, the likelihood is that his customers, looking for a good deal on their upcoming bike purchase, are going to head straight to Holly’s Bike Palace and enjoy a 25% discount. �

Were Bob to bid on his own brand name however, the sponsored search results might have looked more like this:

Of course, Holly’s 25% promotion is still showing in the search results, but the user’s eye will instantly recognise Bob’s Bike Emporium and they will be far more likely to click-through onto Bob’s website and complete their purchase.

Obviously this form of competitive bidding isn’t limited to just local competition – any major bike retailer could be bidding on both Bob’s and Holly’s brand terms. In fact, larger retailers with huge media budgets will invariably be bidding on terms as broad as ‘bike’, meaning their adverts may show whenever a user carries out a search for a bike retailer. For both Bob and Holly, both of whom may be questioning the value of a brand campaign and subsequently decide to pause it, this will result in lost sales, as potential customers are made aware of different retailers and competitive promotions.

Advertisers often question the value of bidding on their own brand, but the data always speaks for itself – customers are constantly looking for a bargain, and they’re not afraid to shop elsewhere.