“Should we be bidding on our branded terms?”
– Every client ever
It is the most common question I get asked as a PPC manager, and one that I have always had to rely on anecdotal evidence, and case studies from major data providers to answer. “Of course you should,” I’d say, “synergy and all that. The sum of the parts is greater than the whole. Bidding on your Branded terms should bring a 40% lift in clicks from those branded keywords.”
Truth be told, it’s a widely accepted truth among those managing PPC campaigns that bidding on branded keywords is the right thing to do, and a widely questioned practice by those skeptical brands that pay for their management services. So what are their concerns? Are they justified? How can we definitively answer this question without relying on ambiguous, standardized data?
Is my agency just using Branded keywords to inflate their stats?
I can’t necessarily answer this one for you. It is true that branded keywords are typically going to be the lowest cost (by virtue of highest possible relevance), highest converting keywords. Your results with a Branded campaign will almost surely be better than without. Does this mean your campaign manager’s intentions are corrupt? Probably not. Most likely they are relying on the best data they have available to them, which suggests bidding on Branded keywords is a good move (more on that to come).
If you truly believe there is some foul play at hand, there’s probably a greater issue of trust that should first be addressed. Hopefully this can be resolved by improving communication, and establishing where Branded keywords fit within the overall strategy. If that still isn’t enough, consider developing separate goals for Branded/Non-Branded campaigns, rather than a roll-up. Worst-case scenario, you can adjust your contract structure to remove all performance based incentives.
While there may be a few bad apples, I can attest that any of the dozens (hundreds?) of PPC managers I’ve met through my career are doing just what they think is right for their clients.
* Also referred to as ‘padding the stats,’ and widely seen in the worlds of online gaming and professional sports. The most recent tracking of stat padding (‘03-‘04) shows Kevin Garnett to be the most prolific garbage time player in the game. If updated, I’m confident the ’12-‘13 stats would find similar results.
Aren’t we just paying for traffic that we would already get from Organic results?
This is the big one, and it’s a completely valid concern to have. Until recently, there was very little we could do to definitively answer this question. The best tests I’ve seen performed will pause a Branded PPC campaign and take a before/after snapshot to compare total traffic. If the total traffic from both sources was greater than the organic only equivalent, then an incremental lift did exist.
Organic + Paid > Organic only
The problem with this data is that you’re comparing across two completely different date ranges, where variance is bound to occur. Hopefully you’ve picked a fairly steady period in your year where seasonal fluctuations are minimized, but there are always outside influences that are bound to impact your test.
I’ve performed this test myself half a dozen times, as well as quoting the results I’ve seen published around the industry. Google even performed their own research to confirm that ad clicks do not cannibalize organic traffic, though their findings of 89% incremental traffic was a little high (RKG did a study of their own and poked a few holes in the Google sampling). Ultimately I settled on 40% as a reasonable expectation, with enough industry support to back those claims if needed.
Time for more advanced measurement
Last week, we introduced you all to the new Paid & Organic report within AdWords, which combines Paid data from AdWords with Organic data from Webmaster Tools. Now let’s put that report to use to get some real, actionable figures on an Account-by-Account basis.
1. Filter by Branded keywords or Branded campaigns
2. Compare ‘Organic shown only’ with ‘Both shown’
One of the major flaws in Google’s study was that they compared traffic of paid keywords that weren’t driving any organic clicks. This, of course, is increased traffic, but not representative of incremental lift in the sense we are attempting to measure. To prevent ourselves from making this same mistake, we need to isolate only keywords that contain both Search Result Types: ‘Organic shown only’ & ‘Both shown’. Sadly there is no way to filter by Result Type, so you’ll have to download into excel and do a little manual sorting.
Ultimately, we’re looking for a total across all (or most) Branded keywords in the following metrics.
- Total queries
- CTR of Organic only
- CTR of combined Organic + Paid
- Organic clicks with Both shown
- Paid clicks with Both shown
3. A little math
When a paid ad appears along side the organic results, CTR increase from 32% (#2) to over 47% (#3). That increase of 15% is a pretty significant boost from your highly coveted Branded terms. Applying this to the total queries that occurred over this time (#1), we can see that a 15% increase equates to almost 20,000 clicks!
Unfortunately, though, we’re not done there. The sad fact that we must be aware of is that those PPC ads probably took a few clicks that would have otherwise gone to the organic positions. This is the infamous ‘cannibalization’ we’ve referred to before, where searchers don’t pay particular attention to which link they click, and by virtue of the top position on the page, ad extensions, or pretty colors, they click the ad instead of the organic link. We can see that when the ad appears along side the organic result, Organic CTR (#4) decreases by 3.5%
But there is good news. We generated more clicks than we stole. Proof that there’s value to this approach. How much value, exactly?
Holy crap, 40%!! Maybe not on the dot, but validation none-the-less.
What did we learn?
Cannibalization absolutely does occur when bidding on Branded keywords, but it may not be as significant as you think. In this instance, the cannibalized traffic only accounted for ~11%. We can consider this an 11% markup on our Branded CPCs, and easily establish new goals based on this information.
A 38% incremental gain in traffic from our highest value, lowest cost, most qualified keywords? I don’t know of an advertiser who wouldn’t want those results.
The real takeaway from this analysis is not a new number to reference. Performing this analysis across all of our clients, we’ve found a range from 10%-65% of incremental traffic. Results will vary with every account, with different levels of competition, organic rankings, conversion rates, etc. The real finding is a repeatable, data-driven process that can answer one of the tougher questions we’ve faced for years. Should we be bidding on Branded keywords? Depends. Let’s find out.