The Internet Marketing Driver: Glenn Gabe's goal is to help marketers build powerful and measurable web marketing strategies.

Wednesday, August 15, 2007

Buying Your Brand Keywords in Paid Search When You Already Rank in Natural Search Might Actually Make Sense


Should You Run Paid Search Ads For Your Brand Keywords?I love that in web marketing you can test ideas and receive almost immediate feedback. When it comes to search marketing, I focus heavily on both paid search and organic search and although I’m a bigger advocate of organic search, I definitely see the value in running paid search campaigns. For those of you running paid search purely for branding purposes, my paid search philosophy may sound strange to you. I focus on a crazy thing called Return on Ad Spend (ROAS) which means I’m not happy with just visitors…my goal is to generate conversions. ;-)

Formula for Return on Ad Spend (ROAS):
Revenue - Ad Spend / Ad Spend * 100

To Run Brand Terms or Not To Run Brand Terms…
Since organic search and paid search are two very different animals, it’s often hard for marketers to determine whether or not they should run paid search for their brand keywords. Logic tells us that if you dominate the top listing in organic search for your brand terms, then why would you need to run paid search?? It just doesn’t make sense, right? People trust the organic listings, they will see you ranking #1 and immediately click that link and buy from your site, right? For the most part, that’s been my philosophy. Well, the web marketing world changes at light speed and I never thumb my nose at test results (which brings me to the point of this post.)

Offermatica’s Paid Search Test
I recently read an article by Offermatica explaining a test they ran with one of their online retail clients. They basically wanted to test the effect of running paid search for brand keywords when the company in question owns the top spot in the organic listings. Would it matter? They tracked 30 brand keywords over a 2 week period, one week with the paid search ads turned on and the other week with them off. You can read more in the article, but the test showed that although the site received fewer visitors during the week that the paid search ads were turned on, conversions were up almost 23% and revenue per visitor was up 22%. Now, it wasn’t a perfect test…but it did show the value in running paid search for brand terms.

So I said to myself, what the heck…I’m also going to try it out (although not as elaborate as Offermatica’s test.) I performed keyword research for our brand name and found about 40 keywords that we should target. Then I quickly set up the campaigns in both Google and Yahoo. That was a month ago. Then I waited for the data to come in…

What were the results?
Again, I didn’t go to the extent that Offermatica did, but I saw our brand keywords generate sales that far outweighed their cost. The ROAS so far has been 5900%. In addition, during the test, we saw registrations up 31% from paid search and even natural search revenue went up 41%. Go figure. Now, it definitely wasn’t a perfect test, but if you look at the Return on Ad Spend for the brand terms, it makes a lot of sense to keep the ads running (to say the least). Think about it, if I told you that you could net $59 for every $1 of ad spend, would you run the ads? You bet you would! :-) I’m becoming a believer. I rarely argue with data.

Should You Run Paid Search for Your Brand?
Every business is different so you should evaluate this paid search strategy based on your unique situation. However, it’s definitely worth a test. Simply allocate some ad spend for a month to run paid search for brand terms and see how they perform. Then compare the results to a similar month for your business. In my opinion, it’s well worth it. Remember, 5900% ROAS. :-) Worst case scenario, you turn off the ads.

Here are some factors to consider when evaluating whether to run paid search for your brand (even when you own the top spot in organic search):

1. How unique is your brand name?
2. How much competition do you have for your brand name in search marketing (both paid and organic)? You might be surprised to see paid search ads running when you enter your own company name! Yikes.
3. How much revenue do you currently generate from your brand keywords in organic search?
4. You should perform keyword research to see how popular your brand terms are in both organic search and paid search.
5. Are you running any other marketing campaigns where running brand terms in Paid Search would help your efforts?
6. Structure your test so you can pull key data from your analytics package (you will get a lot of questions from senior management regarding your test, especially if senior management leans one way versus another with regard to paid search.)

As I mentioned in a previous post, Paid Search is a tough and gritty online marketing channel, but if you keep a close eye on your campaigns and constantly refine them, Paid Search can be a profitable channel. Testing is the name of the game, so as the Royal Bank of Scotland says, "Make it happen". --Hold on a minute! I just searched for the Royal Bank of Scotland and see they are running paid search for their brand keywords. Do you think that they also read the Offermatica article? Then I quickly searched for the tagline that’s been in all of their TV commercials "Make It Happen", and I didn’t see one ad…ok, maybe they should read the article! :-)

GG

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