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Lesson #18: Bidding on Brand Keywords

June 12, 2012
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To bid or not to bid? That is the question. Bidding on an advertiser’s own brand keywords is a very contentious topic within the SEM community. However, from every test I’ve seen, bidding on your own brand keywords is not only the best practice – it makes a significant difference when it comes to ROI.

Advertisers that show up in both the paid and organic results for their brand terms receive an average of a 20% increase in their KPIs versus only relying on the organic results, as repeated tests show. A weaker brand might even see a competitor showing up on their brand term searches, usurping some of their traffic. In addition, the absolute control over the ad’s message that a paid search ad provides allows the advertiser to promote sales, new features, new branding, or anything else that the advertiser is trying to push.

Clicks on brand terms are also cheap. After two weeks or so, an advertiser should expect to pay well under a dollar for clicks on their brand terms, due to the high quality score that will be assigned to them. As a result, the cost per conversion or acquisition on brand terms is usually extremely low. Even if the profit is not as great as the no-cost-to-the-advertiser (100% profit), an advertiser is still likely looking at receiving 90-99% profit, depending on the cost of the item and the conversion rate.

Don’t believe me? Feel free to test for yourself or debate in the comments section below. But until convinced otherwise, I strongly recommend, for the reasons above, that advertisers bid on their own brand terms.

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