The Importance of Bidding on Brand Keywords

- July 30, 2018

To bid or not to bid, that is the question…

If I had a dollar for every client who objected to, or at least questioned the reason for bidding on brand keywords, I would be one rich woman! As of late, I’ve had this conversation with a variety of clients. The main argument of course is, “why should I pay to show on my branded terms when I rank first organically?” There are many reasons why you should be in the top paid slot on the SERPs for brand searches, however today I’m going to focus on the most important one.

If you’re not there, your competitors are.

This simple fact seems obvious; however, some clients still want to test pausing branded terms to “see what happens.” I’ll tell you right now, the effects of “testing” what happens when you turn off branded keywords could be detrimental in the long run. I’ll break it down for you with an example.

A client of ours paused their branded traffic in October of last year (2017). This was done because they reached their annual budget allocated for this campaign earlier than anticipated and they were not willing to re-allocate or add additional funds to this effort. Upon pausing in October, their CPC was approximately $1.80. Fast forward to January 2018. It’s a new year, there’s new excitement and of course new budgets. Upon re-enabling their brand campaign, they soon thereafter saw brand CPC skyrocket to $2.60. That’s nearly a 50% jump!

Taking seasonality out of play (January CPC year over year jumped approximately 35%), our first stop was to look at quality score. We didn’t make any changes to the brand campaign while it was paused; however, we know quality score will highly affect our CPC. No changes there, strong 9’s and 10’s as we would expect for brand traffic.

At this point I’m sure you’re thinking, what happened? Well let me tell you…

A very common search tactic is to bid on competitor’s brand terms. Even though quality score will be very low (resulting in a very high CPC), it’s often still valuable to pay the heightened cost for conversions and brand awareness. If someone is searching for what your competition has to offer, they may be interested in learning about your company as well.

Knowing this, the next stop was to look at the Auction Insights report in Google Ads. This report shows us account performance compared to competitors participating in the same auctions. This is where things got interesting… We saw a 60% increase in the number of competitors bidding on our branded terms in 2018 vs. 2017!

Once a competitor realizes how valuable it is to show in the first position (or even on the first page) for your brand term, they will continue to bid higher and higher to remain there. This increased bidding/competition results in higher cost for your brand terms.

Let this be a cautionary tale. The next time you are debating pausing your brand terms, stop and remember this example. Do you want to risk paying more for your branded keywords than you currently are now? If the answer to that is no (which I would assume it is), re-allocate, ask for more money, do whatever it takes to stay active and competitive on brand terms year-round.

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