There’s much debate in the search engine pay per click advertising world over whether businesses ought to be bidding on their own brand terms — that is, whether a company should pay to have ads displayed when a search includes its brand name, despite those searches typically triggering organic results anyway. Advertisers often worry that such advertising dollars are wasted or that paid ads will cannibalize click-through rates on organic results.
New data released by Bing Ads may shed light on that dilemma.
In summary, the company found that advertisers that bid on their own brand terms both receive more clicks overall and prevent clicks from going to competitor listings.
To reach those conclusions, the Bing pay per click advertising platform collected data last year from two market segments: retail and travel.
The analysts found that when businesses did not pay to have ads displayed on brand-related results pages, those retail and travel brands captured 60% and 61%, respectively, of clicks. When the brands also had paid ads in the top position, however, retail brands captured 91% of total clicks and travel brands captured 88% of total clicks. That’s an increase of 31% for retail and 27% for travel due to paid search ads.
Further broken down, the data showed that when both paid ads and organic results were displayed, 42% of the retail clicks went to brand ads and 49% went to organic listings. Those figures were a bit closer for travel businesses, with 45% of clicks going to brand ads and 43% going to organic results.
But Bing analysts emphasized that cannibalization — diverting what would have been free traffic via organic links through paid ads instead — was actually quite low in the data set. About 11% of retail clicks and 18% of travel clicks probably would have gone to the brand anyway even if ads were not displayed, according to the report.
That doesn’t diminish the incremental effect of bidding on brand terms, however.
“Based on our extensive research over the past decade, I can say with a very high degree of confidence that businesses should absolutely be bidding on their Brand Terms,” said Brad Garlin of JumpFly, one of the largest Pay Per Click management firms in the country. “In fact, brand specific terms sometimes prove to be an advertiser’s most valuable PPC keyword phrases.”
The full data analysis has been made available by Bing Ads on SlideShare under the title “Brand Term Bidding: An Offensive + Defensive Strategy.”