The Pros and Cons of Using Brand Paid Search

August 7, 2015

By August 7, 2015insights
paid search cpc search

To use brand paid search or not to use branded paid search? That is the question search engine marketers are asking today. Is it worth it to bid on branded terms for additional search engine traffic, or a trap lurking in the background?

Instead of going one way or the other, this article is a balanced position with the pros and cons of using branded paid search or cpc search campaigns.

What is Branded Paid Search?

Before we go into the pros and cons, let’s address what brand paid search is. Branded search or Cost-Per-Click (CPC) is simply bidding on a specific company, product, or brand keyword to drive traffic.

This is in lieu of bidding on traditional keywords. A good example is iPhone versus smartphone. iPhone is a brand of Apple, while smartphone is a generic term for all phones with internet capability.

A smartphone obviously includes iPhones by definition, which is the keyword iPhone might not receive as much traffic as the keyword smartphone.

Keep in mind that anyone can bid on any branded search term, including your competitors. Google began allowing competitors to bid on branded keywords back in 2008.

That is a big part of the pros and cons we discuss below.

Brand CPC Search Pros

Cheaper form of traffic:
While the prices of Brand CPC are rising, they are still considered cheaper than the traditional keywords marketers bid on to attract traffic. This is changing as the nature of competitor bidding becomes more popular. Yet the costs are on average 80 to 90% less than traditional keywords. This is what makes them so attractive.

Less competitive:
Another argument is that they are less competitive than traditional keywords. The reason why they are cheaper (as we discuss above) is because less people bid on the terms.
Google works on a bidding system. The more people interested, the higher the bid. If fewer people are bidding, then the price naturally decreases.

Control your brand:
As we mentioned above, not only you, but also your competitors can bid on your keywords. That means you need to bid on your own brand terms.

Even we could do a better job on this. When you do a search for shout web, you also find an ad for Shout Stain Remover. If we decided to add a small campaign for the word shout web then we can improve our Click-Through-Ratio (CTR). A recent study determined when you combine organic and paid presence is 25.2% compared to 20.1% on organic searches only.

This means you can increase your CTR by 20% just by adding your branded keywords in your paid search. Your CTR is a factor in your quality score Google assigns you.

Your quality score can affect how much you pay for Google AdWords. We discuss this in further detail below. For now keep in mind that when you bid on your own brand terms it has a positive effect on the price you pay for your entire campaign.

Branded CPC Search Cons

Your competitors can take over your traffic:

Take a common word like Kleenex. It is a branded product, but has almost become synonymous with tissues.

Because of this Kimberly-Clark, the manufacturer of Kleenex®, has to pay more for their branded keyword. Otherwise, retailers like Target and Staples would stamp out the sales they receive on their website for the product.

While this is not as dangerous for a manufacturer, ecommerce stores can take significant hits when this happens.

Worse than having competitors taking over your traffic is getting sued:

For the past 6 years Marks and Spencer and their rival Interflora® have been in court over keyword bidding of the term “Interflora®.” Interflora® is a trademarked term.
The plaintiff company argued that it is not permissible for their competitors to bid on that keyword without their permission.

While they are still discussing the merits of this idea in the courts, make sure if you do branded bids, you ensure that your ad has no mention of your competition. It reduces the chances of getting sued for trademark violations. No guarantees!

Potentially Lower CTR and Quality Score:

We mentioned above the positives of higher CTR and quality scores.
The downside is that when you bid on your competitors branded terms, you also potentially can reduce your quality score with a lower CTR.
WordStream generated a visual of how lower quality scores affect your costs. They used the formula from Google to determine roughly how much extra you would pay with various quality scores.

Remember, when you bid on competitor keywords you are asking prospective clients to change their mind about whose services they will use.
It is at the heart of why search marketers can pay more for their entire campaign, because of a reduced quality score after failing more often than not.

Wasting Money on Mobile Searches:

Unlike desktop searches, mobile branded search is a waste of money.

That is because unlike desktop searches, a mobile search is probably happening when a prospect is looking for nearby locations of a specific retail outlet. That means you are throwing away good money with this approach.

Cannibalise your Organic Search Results:

One of the biggest dilemmas search engine marketers face is whether they are cannibalizing their long-term organic search results for paid search results.

If you spend all of your money on your brand, then you do not have money to spend on new prospects you don’t know. Even worse is that if a consumer searches on Google they are more likely to click on the first result. If your first result is an ad then you wasted money that could have gone to expanding your market. It is a catch-20.

Do you spend it on current clients who might have clicked on your site anyways, or new ones who might not be as likely to click through to your site?

Final Thoughts

You now have all the pros and cons of using brand paid search. The fact is you need to decide whether it is worth it for your company to get involved with branded search marketing.

It is more complicated because of the nature of the bid, yet potentially prosperous. Let us know in the comment section below what you think about branded CPC ads?