Today’s post is by Anvil Media‘s Nate Gancher.
Those newer to paid search often ask digital marketers the reasoning for bidding on branded terms. The question of “why should we be paying money for a branded term that ranks #1 on SEO?” is certainly a valid one. Those well-versed in paid search know the answer to that question is cheap traffic, incremental growth, and increasing overall click-through rate by taking up a larger portion of the search engine results page.
There is certainly value on paying for branded terms, but that value can sometimes be murky depending on the advertiser. There is a variation of a branded keyword whose value should never be questioned, however. That is the branded commodity keyword.
A branded commodity keyword exists primarily in the E-commerce realm, and is found when an advertiser has a product that is the same as the company’s name, or a product that is commonly purchased online by first searching for that company in a search engine. Its difference from a regular branded term lies in its purchase intent.
For instance, someone searching for “Microsoft” could be doing any number of things such as looking for careers, getting a stock price, or even just getting general information on the company based off a pure desire for knowledge. That term probably doesn’t carry a lot of purchase intent though.
Compare that to a term like “Levis.” While not everyone searching that term is looking to purchase jeans, a large percentage of them likely are. “Levis” are a commodity that consumers are actively searching for with intent to purchase, while just happening to have the same name of the company that sells them.
If you have a keyword that is similar to the above example, you absolutely must take full advantage of it for two reasons:
1. Cheap traffic with conversion intent – This will likely be one of the cheapest terms in your portfolio, and potentially one of the highest-traffic ones too. Depending on the branded commodity, it’s likely that traffic has a very high intent to make a purchase.
2. Minimizing purchases made on 3rd party sites – If you do have a branded commodity, it’s almost a guarantee that 3rd-party sellers are bidding on that term, as well as selling the product on their site. While it’s still a positive that your product is being sold, it’s being sold by a retailer or a secondary marketplace that you’ve already sold to. Because of this, you likely aren’t making any additional money when someone searches for your branded commodity and buys your product from someone else. You want to maximize the amount of times that your product is being purchased from your own site and keep a larger portion of the profit.
Let’s look at the Levi’s example again, with the below search engine results shown:
Levi’s is maximizing its profit by protecting its own brand and appearing in the first position of the paid results. If they don’t bid on this term, another advertiser will move into this position and sell their already-purchased Levi’s products to a consumer.
If you’re operating under a strict budget, the best way to maximize your spend is to broad-match your branded commodity keyword and see how low you can get your cost per click while still reaching your traffic potential. I personally used this tactic after taking over an existing PPC account and saw profit and revenue grow several times over, while greatly reducing overall cost per click.
If you have a branded commodity keyword in your portfolio, make sure you’re getting the most out of it by minimizing your spend and maximizing the purchases being made on your website!
– Nate Gancher lives in Portland, Oregon and is a Digital Analyst at Anvil Media, specializing in pay per click advertising, search engine optimization, and social media strategy. Nate has an educational background in business, advertising, and sociology.