Google Ads – Buying your own brand?

Should you buy AdWords for your own brand name? The short answer is no – or dedicate a very small part of your budget to it.

This is apparently a question that is quite loaded – almost all my clients spend most of their AdWords budget on their own brand, and the marketing agencies handling their AdWords are telling them that it is the best way to spend your money. We are talking public companies, with huge budgets. I have also read quite a few blogs that says that this is the best way to get a good return on investment – and I think it is critical that you understand what you are paying for when you are paying for ads when users search for your own brand.

I will use manufactures of products as example, because if you are a reseller there shouldn’t be much competition on your brand, so it shouldn’t be a problem. If you are a reseller you can skip down to the part about measuring branded ads.

But first, let’s define what we are talking about so that there isn’t any confusion.

Brand – It is your own brand. If you are a reseller, “Bobs pant store” that is your brand. If you are selling a brand, “Bobbypants”, which other sites sell, that is someone else brand. If you are the manufacturer of “Bobbypants” and you are both selling through your own store and through resellers, “Bobbypants” is still your brand.

Generic – Something generic. With the same example as above, “pants” would be a generic seach phrase for your store. Or “men’s clothing”.

Branded AdWords is paying for a session that already is yours

I get that the ROAS/ROI is awesome when you are paying for your own brand, and there is a quite simple reason for that. It drives no new business, it is only paying for an already won session, or if you are a manufacturer, re-distribution of your revenue between you and your resellers.

If I am a user and I am searching for “Nike” or “Nike shoes”, I have already decided that I want “Nike shoes”, or at least that I want to visit a site with Nike shoes on. The intent behind my search is so specific, so for me to choose another brand, simply because Nike might not be the first result I see when I search is highly improbable.

What site I choose to visit when searching for Nike, that might depend on what result is shown first, if I see Nike.dom as the top site, I might visit that and ultimately put my order on nike.com instead of one of the resellers that sell Nike shoes – but the transaction, or the probability of a transaction is more or less the same if it is Nike.com or a Nike reseller as the top result.

“But iamdatadriven, we earn more money selling directly from our site then we do selling through resellers”

Yeah. That is usually the case. But you are still paying for a transaction where the customer already have decided. You need to decide on a strategy – either you trademark your brand to keep others from getting a high AdRank on your brand, and thus lowering the cost for your branded ads or you push your brand through your resellers, and don’t buy your own brand.

“But iamdatadriven, we need our resellers they are more than 50% of our revenue, if we trademark and don’t whitelist them they will not sell our brand. But we are making 5 times the gross profit when we are selling direct. Why not do both?”

 

Because you are raising the cost of transaction both for you and for the reseller, and you are not using your marketing budget for marketing, you are not gaining any new customers, you are not increasing your brand awareness.

You are increasing the cost of a transaction on your brand for your resellers.

You are decreasing their revenue on your products.

You are not increasing the number of customers interested in your products.

It is a short-term solution, we have a saying in Sweden that fits quite nice

It’s like peeing in your pants – nice and warm for a few minutes but it becomes cold and uncomfortable quite fast.

 

So no branded AdWords?

Well, you can use a small part of your budget for it, with a low bid. If no one else is doing it, it is cheap and it doesn’t hurt anyone, but I wouldn’t say that it’s helping anyone either.

And I know that many of you out there is spending a lot of your budget on branded ads. I have met eCommerce managers who have been the campion of their company because they have set up branded ads that have increased the revenue of their site, agencies that have spent 95% of huge AdWord budgets just to compete with their resellers.

How to measure it?

At the end of the day, branded ads should be measured as branded organic search. Because that is what it is, you have already paid the marketing in order to get that user to search for your brand – so it’s not marketing. It is organic, or direct traffic, and you need to exclude it if you want an honest assessment of your digital marketing.

Depending on what products you are selling, and how many visits it takes for a new customer to convert, you might have a behaviour that looks like

Generic search -> Email -> Generic Search – > Branded Search -> Transaction

Then it is important to attribute the generic searches and email to that transaction, but you can read more about that in my post about attribution and multichannel analysing.

 

What are your thoughts? Feel free to leave a comment and discuss, especially if you don’t agree