Google Adwords: Bid on Branded Terms for Better ROI

by Frank on June 14, 2010

At the beginning of my internet marketing education, I was told early and often that “branding was out.”  It was expensive, it was unmeasurable.  It was the thing that big budget, no-accountability Madison Avenue agencies did.  And there was a lot of truth to that.  I’m a huge fan of accountable marketing.  In the end, the scoreboard is the only marketing metric that matters.  One reaction to seeing the posh facilities for the Clydesdale’s at the Anheiser-Busch facility in St Louis is to  say, “that’s protecting your brand.”  My reaction?  That’s why some other company now owns Budweiser.  A giant horse has never made me crave watered-down beer.

When I started into Pay-Per-Click (PPC) ads with Google Adwords, I was similarly advised: branded terms are a waste of money.  Which – like the “branding is out” crowd – had some validity.  If you’re trying to get the top spot just because you need to be #1 slot in PPC for your brand – regardless of the ROI – that’s not responsible marketing.  With all that in mind and after five years of managing about $100,000 a year or so in Adwords budget, I can say confidently:

If You’re Not Bidding On Branded Google Adwords Terms, You’re Losing Money

Some reasons I say this:

  1. Your branded Adwords Pay-Per-Click terms will almost always convert.  On one Adwords account that I manage, for every $1 I spend on branded terms, we get $12 or so back.  This makes sense: the searcher is looking for my client.  They can find their stuff elsewhere, too – but the application is easy: if people are looking for your stuff, make sure they can buy it from you!
  2. That same client has plenty of competition for their branded PPC terms.  Even though my client ranks really well in the naturals, they’d be losing that revenue to a competitor if they weren’t bidding on those terms.  It’s absolutely wrong to think that just because you’ve got the naturals well in-hand that PPC is unnecessary.  If you can make $1 more using Google Adwords than you could without PPC why wouldn’t you do it?
  3. Branded terms are usually much cheaper than broader terms.  For example, another client sells sound masking – a pretty broad term.  It’s a niche market, but the competition for that term is pretty fierce, the clicks are expensive, and the margins a lot smaller.  While the search volume is much lower on their branded PPC terms, they get a double-digit click-through rate and a similarly-awesome conversion rate.
  4. Branded terms are stacked in your favor.  The key to winning at Adwords is getting a higher ROI from your PPC ads than your competition does.  Nobody should be more relevant than you are for your branded terms, right?  Well, built into the mix of metrics Google uses to decide how much a particular placement will cost you is a bunch of relevancy factors, not least of which is the landing page your Adwords ad sends searchers to.  If you can’t be more relevant – and thus get cheaper clicks – than your competition can for your own terms, then you deserve to lose.

Like I said, I’m a big fan of accountable marketing.  And being accountable means going after the things that convert, and tossing the marketing initiatives that cost money without a clear return.  Bidding on your branded terms in Google Adwords just makes sense.  As with everything, test it for yourself – your market may be different.  But my guess is that if you’re not doing Pay-Per-Click on your branded terms, you’re probably leaving a lot of money on the table.

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