Should you buy Brand terms?

For nearly a decade, I’ve been answering paid search questions. In the early days the questions were all about “What is it?” and “Is there a market?” The questions then evolved to “How can we test it?” and “Can we make money?”

Today, the questions evolve around ROI expectations, if search can impact brand perception, and what the proper media mix allocations is for search. With that in mind, I want to begin an exploration of frequently asked, but difficult-to-answer, questions.

Up first: “What should we do about buying our brand terms?”

Findings from the Atlas Institute

In the movie “Thank You for Smoking,” Aaron Eckhart’s character is a spokesman for the Academy of Tobacco Studies, a research group funded by Big Tobacco. He dines with lobbyists from the gun lobby and the alcohol industry. They call themselves the Merchants of Death and try to convince everyone that despite all signs to the contrary, their industries are not to blame for the ills caused by their products.

I was reminded of this when reading about a recent study published by the Atlas Institute. The Atlas Institute is a division of aQuantive, a company purchased for $6 billion by Microsoft, which for the first half of 2007 generated well over half its revenues in media not defined as search. The study led with such salacious headlines as “Brand Search eats up 50 percent of your search dollars” and “71 percent of sponsored search clicks can be attributed to navigation.”

Ultimately the Institute contends that companies are wasting a substantial portion of their media dollars in search. And, conveniently enough, the Institute suggests that more effective usages would be in media where brand awareness is less certain. If you’d like to know what those media are, you need only to look back a paragraph and deduce where that excess of revenue from aQuantive is generated.

Next, here’s the question I get asked on virtually every account: “Should we buy our brand terms?”

The Prosecution’s Case Against Buying Brand Terms

In the initial article about the Atlas Institute report in Adweek, Young-Bean Song, vice president of analytics for Atlas, is quoted saying, “The reality is those people are already intending to go to your Web site. What you’re really paying for is a glorified Yellow Pages listing.”

Further aiding the case is Alan Boughen from NeoSearch, who declares that the real value of buying brand is not in conversion but as a “certain cost of doing business in terms of locking out competitors.”

Song continues by saying, “Atlas would not advise advertisers to cease bidding altogether on their corporate and product names, but to lower their bids and rely more on their ranking high in natural search results for those terms.”

The Defense Makes A Stand

By now it must be clear that the answer we give to clients is “Yes, buy your brand terms.” The following proof points illustrating why go beyond a 30-client study and stretch through a decade of experience with 50+ Fortune 500 companies.

1. Brand terms are cheap. For many advertisers, brand terms are accessible at less than 25 cents per click. It is not uncommon for companies without a large competitive set to obtain top rankings at 10 cents to 15 cents. Any advertiser that would move down for its own brand terms, as suggested by Atlas’ Sung, is going to do so at the expense of either affiliates or competitors, thus putting its glorified Yellow Pages listings behind the competition and allowing a consideration to be established that should never enter its consumers’ minds.

If they really want your brand, why would you ever settle to be behind someone else, even if you had a #1 Organic Listing?

2. Brand terms convert better. One of the flaws in the Institute’s study is that while it explores click-through-rate and expense, it does not factor in revenue or acquisition value. For one client, we saw that CTR was consistently at 20% and that 20-30% of its budget went to brand. While that’s less than the 54% the Atlas Institute study cites as going to brand terms, it is still a healthy investment.

However, for our clients, brand conversion and the average order/acquisition volume was 10-15% higher for brand terms than generics. So while brand terms “may” have been purely directional, they paid for themselves and often could be used to fund other areas that may not have the same strength of brand equity.

3. Brand Search is relationship gold with your audience. In the past, I have referenced studies we have conducted that show search is an amazing fulfillment channel for interest created by both display and traditional media. If that is true, then branded search is the easiest way to cash in on that opportunity. Wikipedia’s description of brand equity includes the following: “Positive brand equity is created by consistently meeting or exceeding customer thoughts.” Being at the top of the page in Google when someone does a search for your brand would qualify as one of those expectations consumers now have consistently.

Taking the brand debate a bit further, David Lawee, vice president of marketing for Google, responded to a question from BusinessWeek about how Google thinks about his brand with, “We’re always thinking about what’s best for our user.” That approach would serve all marketers well when it comes to connecting with consumers who want to find them. While organic rankings are great, almost exclusively they will be limited to a home page listing and perhaps a few select pages. Paid search can create connections with consumers to the advertising and opportunities that are most prevalent at that moment, which may or may not be home page material for a company.

Finally comes the sage advice from Millward Brown, creators of the Brandz Top 100 World’s Most Powerful Brands study. In concluding its research, Millward Brown’s study suggests that “investing in brands is the key to long-term success.”

We see this done in search marketing by investing in brand terms for our clients because they deliver results, answering the popular questions of today’s search world, “Should we buy our brand terms?

This is the first in a series of “Most Popular Questions Asked” columns. Your posts are encouraged to both the Online Spin blog below, and the Search Insider blog (I’m a guest columnist today for Online Spin, but a regular Search Insider), asking your most pressing questions around the space. Over the course of the Fall we’ll tackle several of them, starting with “What’s a standard CTR?”

By Chris Copeland
Chris Copeland is senior partner/managing director for Outrider, a search marketing firm headquartered in St. Louis and a GroupM company. Contact him at Ch************@ou******.com.
Courtesy of http://www.mediapost.com