To say that 2009 has been a challenging year for B2B marketers would be an understatement at best. Over the past twelve months, we have seen conversion rates drop as searchers do more and more research, but aren’t quite ready to do business.

While everyone is hopeful for economic improvement next year, there are measures that B2B marketers can take in their search campaigns to increase the chances of success. As you start planning for 2010, consider the following three tips on how to improve your search results.

Explore reporting options

Understanding your total revenue or acquisitions from search is paramount. Fortunately, there are two areas to explore to ensure you’ve captured it all:

Conversion window

Like most search marketers, you probably have a specific conversion window that you report on. However, given the economic climate, you might want to consider expanding it. Why? Because expanding your window will allow you to determine if more searchers are taking the desired conversion action, but doing so outside of the timeframe you are currently measuring.

In essence, expanding your conversion window could very well help you claim additional sales, and ultimately boost the efficacy of your campaigns.

Micro-conversions

While making the sale or gaining a new customer is a top priority, don’t underestimate the value of micro-conversions such as email or newsletter signups, and downloads, etc. Sure, it may take longer to convert these searchers into customers, but such micro conversions play a key role in fostering relationships with B2B prospects.

Because of that, some percentage of these searchers will turn into customers down the road. By tracking these micro-conversions to actual sales and customers, you can establish a value for each action. Doing exactly that will boost your search results and aid your search strategy.

Optimize to the ultimate conversion point

Many B2B marketers mine their engine and conversion data for information that will help them drive more sales. However, the conversion data that can help them the most is often not relayed in the conversion pixel or tag. Because of that, what the marketer usually sees is the activity that occurs on site, such as a new lead or a free trial. And while leads and free trials are important to generate, they are not the ideal data points to optimize to.

Instead, marketers need to optimize to the data on the backend, such as whether that lead or free trial resulted in a customer. This requires marrying your engine data with the ultimate conversion point, which is found in your CRM data.

Note that the rate at which leads and free trials convert into new customers will most likely vary by marketing channel and within search, whether by engine, campaign, ad group, or keyword. Having this information will help you allocate search funds so that you gain as many new customers as possible at the lowest cost.

Branded click path analysis

If a large percentage of your sales or customers come from branded searches – as it does for most advertisers  –  then it is important to perform click path analysis on those entering your website from branded terms. Doing so can help you boost your search results in two ways:

1. Click path analysis will allow you to review what products or services your visitors are purchasing. In turn, this information will tell you what products or services to focus on when creating a more effective user experience (in terms of messaging and landing pages).
   For example, if branded searchers tend to select products or services specific to one type of business, then you may want to test improving your conversion rate by allowing searchers to segment themselves on your site by selecting their business type or business need.
2. In addition, click path analysis can help you determine where abandonment is occurring on your site most often. This information can provide you with insight into where landing page optimization is needed most. It will also help you understand the intent of these branded searchers, which can be difficult to determine from just the branded search term alone.

Hopefully 2010 will bring economic growth and recovery, but most B2B marketers know that they can’t afford to wait and see what happens. Now is the time to look for ways to generate improvements in your search campaigns, and the above tips can help you do exactly that.

Search marketers often benefit from the “last ad clicked” model because search is far down the purchase funnel. But limiting your analysis to just that is like operating with blinders on:  it doesn’t exactly give you the full picture of what’s happening. Instead, B2B marketers should perform attribution modeling across their marketing channels.

Today it is critical to look beyond the last click to find unexplored areas of opportunity. In fact, data from the various touch points in a sales cycle can be a veritable goldmine. Without tracking and analyzing multiple touch points, marketers can’t get a true ROI of their marketing dollars. As a result, they might not be fully optimizing their marketing initiatives.

Findings from a recent Forrester/iProspect study demonstrate the importance of attribution modeling by quantifying the symbiotic relationship that exists between display and search. The study shows that 27 percent of internet users initially respond to display ads by conducting a search on the company, product, or service mentioned in the ad. In addition, that figure jumps to 49 percent when latency is taken into account. This data clearly highlights the need to consider display’s value in driving people to search. This is exactly the type of opportunity attribution modeling can help you uncover.

By acting on the findings attribution modeling reveals, marketers can actually gain a competitive advantage, particularly during this economic downturn. Now is the ideal time to discover new opportunities and take advantage of current CPMs and CPCs before your competitors do. After all, the minimum costs will likely increase once more marketers uncover opportunities from their own attribution modeling.

But developing an attribution model for multiple channels can be a daunting task. When devising yours, consider the following core elements:

1. Technical resources – The availability (or lack thereof) of technical resources will help you determine how many channels to initially consider in your attribution modeling efforts. Assuming you don’t have an abundance of resources, start simple with just two channels to get a case study. Then leverage it to get the additional resources you need for modeling across more channels.




2. Attribution plan – Once you’ve decided which channels to include in your modeling, you should consider attribution between different products as well (i.e., a consumer clicks on an ad for Product A and then later converts on Product B). In addition, if your company houses several brands, the same scenario would be applicable to multiple brands.




3. Tracking – For each channel you’re measuring in your attribution model, you’ll need to have the same tracking system. Keep in mind that if one of your channels is display, you’ll want a tracking system that can track view-based conversions and not just click-based conversions. Should you decide to change tracking providers, don’t forget to keep a record of the historical data.




4. Cookie expiration – Set your cookie expiration to whatever your company accepts as an appropriate length of time for the sales cycle. If you’re unsure, it’s best to err on the higher end because you can always filter the data based on the time from the initial impression or click to the conversion.




5. Data cleaning – Set-up business rules ahead of time for data that’s not appropriate to analyze.  For example, if 97 percent of your data reveals that there are between 1 and 12 touch points during the life of the cookie, there’s going to be some cut off point above 12 touch points where it makes sense to scrub that data. Additionally, if you’re a global company, you may want to convert any spend amounts into one currency since many engines report in local currencies.




6. CRM data – After cleaning your data, it will be incredibly useful to marry your internal CRM data with your engine and conversion data. This will allow you to determine which purchase paths lead to the most desirable customer, and which lead to the least desirable. This will play into your optimization strategy.




7. Data weighting – There are a few ways to allocate success across different marketing channels. Probably the easiest method is to weight each channel equally, but you also have the option of taking the frequency of each channel’s exposure into account, as well as the placement of each in the purchase path (first, last, or middle touch point).
   

   For example, if someone has been exposed to a display ad five times in a seven touch-point path, then the credit given to display can be weighted higher. Or if display was the first touch point, you could make the case that this channel introduced someone to the brand and should be given more credit than the other channels. In addition, it would make sense to weight the data points based on whether they result in new customers or existing customers.




8. Reporting – There are an infinite number of report types, but certain ones are critical in attribution reporting. For example, you need to be able to see the purchase path (marketing channel, engine, or site, and keyword if applicable) by custom date range. In addition, you need to be able to see which channels (and within each channel, which engines, sites, or keywords) play the role of introducing new customers to the brand, which influence, and which net the transaction. And again, viewing this data by customer type (CRM data) will paint a more complete picture when attempting to improve overall results.

Overall, attribution modeling can help you find unexplored areas of opportunity. Marketers who capitalize on all it offers could boost their ROI, and possibly even gain a competitive advantage. Those who fail to tap into it will squander any advantage it might have provided.

Any marketer will tell you that the more you know about your audience, the better you can speak to it. That’s why research is so essential in paid search — it can help you choose the right keywords, match them up to the best copy, and ultimately, help you better speak to your audience. But what happens when you have multiple audiences for the same product or service? Moreover, how can a PPC campaign best address that issue? Segmentation is the answer.

Understanding the situation

Having multiple audiences for the same product or service often occurs when a company has an offering that meets the needs of both businesses and consumers. In an ideal world, companies in this situation would have a distinct domain for each audience as it would allow them to bid on similar keywords, be present in the search results twice for a keyword, and have different messaging depending on the domain or audience.

Learning from example

But few marketers live in an ideal world, and the reality is that having multiple domains may just not be feasible. However, segmentation is a good alternative, and Dell provides us with a great example of how it can help you better speak to your audiences. Given that, this article will cite examples of how Dell leverages segmentation in their efforts.

Making segmentation work for you

If you are going to invest the time and resources in developing a PPC segmentation strategy, you’ll need to hit four key areas:

1:  Segment your keywords:  B2B or B2C?

It’s important to segment keywords by each audience type so that the appropriate message gets delivered in the copy and landing pages. But in order to segment them correctly, you need to understand the intent behind them. Naturally, this is pretty obvious for some words. For example,  there is little doubt about the searcher’s intent when they  type the term “home computer” into a search engine. For this query, Dell displays copy that highlights “fun,” “safe,” and “family,” and takes the searcher to a page on the site with computer deals.

However, determining whether the intent is consumer or business focused for more general keywords such as “computer” requires some analysis. For example, if during the sales process customers were asked to state whether the item purchased was for personal or business use, then marketers could tap into this information and link it with the keyword used to make the purchase.

If this isn’t an option, marketers should examine various metrics such as the average sale price for each keyword. Doing so can provide insight as to whether the keyword is more B2B or B2C oriented, with the hypothesis being that business purchases tend to more costly than home purchases. Based on findings from the data, it may be necessary to test the proposed messaging and corresponding landing pages to validate this hypothesis or any other.

2.  Let users segment themselves

Rather than only using data analysis to gauge the predominant audience of each general keyword (i.e., “computer”), marketers should allow prospects to segment themselves once they arrive on the site. This would not only provide users with a better experience, but it would also provide additional insight to the marketer. After a user segments himself, he needs to see that the site’s content is relevant to him. For example, when you visit Dell’s website, you’ll find that the four main audiences are immediately apparent and are clear options that the user can select at the top of the home page (home, small and medium business, public sector, and large enterprises).

It’s also beneficial to help visitors get exactly where they want to go on the site with as few clicks as possible to keep them on the purchase path. One way to do this is to list popular categories under each of the different audience types. For example, Dell accomplishes this by listing “desktops and workstations” under small and medium business on their website.

3. Continue to speak in the searcher’s language once on the site

For keywords where the intent is clear — consumer or business — it is far easier to find the appropriate content and continue to speak in the searcher’s language than doing the same for keywords where the intent is more ambiguous. However, everything can be improved, so marketers should still strive to see improvements for keywords with obvious intent. After finding the best landing page, and testing different iterations of it (perhaps through multivariate testing), it is essential to see a further lift in results.

When the intent of the keyword is unclear — as is often the case with more general keywords — marketers with websites that do not allow users to segment themselves will have a challenging task ahead. To find the appropriate content and continue to speak in the user’s language, these marketers will need to tap into paid search data for business intelligence. One possible approach is to  start with a hypothesis on whether a particular keyword is more B2B or B2C oriented, and then test variations of ad copy and landing pages. With that said, keep in mind that there may be some keywords that are well divided between B2B and B2C. Given that, providing users with more general messaging and site content may be the best option.

4. Enhance sales and branding for both audiences with site targeting

Compared to the search network, site targeting offers a more clear-cut way to effectively target multiple audiences by the very nature of the program. Within the network of websites that participate in the program, some focus more on B2C while others focus more on B2B. This creates an opportunity for a good user experience from tailored copy by website all the way to the appropriate landing page with relevant content.

For example, on a site focused on computer games for learning, a computer company (like Dell) can display copy focused on families, while they could also highlight their benefit to businesses on a site with computer workstation content. The bonus with site targeting is that it can be used to not only generate sales, but to also promote the brand at a potentially low cost (depending on the sites’ average CPCs) because the advertiser is able to pay by the click rather than the impression.

There’s no question about it,  marketing to multiple audiences is a challenge. Fortunately, segmentation can offer an effective means to help marketers better reach their various target audiences, apply the right messaging to the appropriate prospects, and provide a good user experience that fits their goals of visiting the site.

For many B2B marketers, social media is still a bridge too far.  Because it’s a broad concept—there are so many different ways to use social media—its amorphous nature can impede implementation.  But a good way to get beyond this obstacle and jumpstart your social media efforts is to start small and aim to get some direct value out of it.  This is exactly what you can do when you tap into social media for its hidden value: key customer insights.  My last article discussed why B2B marketers should leverage social media in this way.  Today, let’s take a look at how to get the job done. 

Social media as a market research tool

When used to monitor the online chatter of customers and prospects, social media becomes a powerful market research tool that can provide B2B marketers with important customer insights, such as learning about problems before they escalate, gaining a better understanding of customer needs, and understanding how your company stacks up against the competition.  And while you could certainly hire someone to help you leverage social media for this purpose, below is a do-it-yourself approach that you can quickly put into action while keeping costs to a minimum.

Step 1:  Find your audience. This requires that you conduct a little research to identify the right social media outlets for your company or brand.  A good place to start is by reading industry publications, credible industry blogs and forums, and/or attending trade shows and industry events.  Doing so will allow you to tap into the community and find out who the power players are, and where the buzz is generated.  Then, take an inventory of the social media sites you found in your research, and select the ones you want to monitor. I suggest limiting the quantity to about six to start.  In addition, when making your selections, strive to include outlets that cover the content from different angles. 

Step 2:  Establish success criteria. Next, you need to establish the success criteria to be tracked.  To start, make a list of the perception factors that are important to your business and your industry.  For example, a management consulting firm would probably view the following perception criteria as being critical to its success: strategy; pro-activity; responsiveness; relationship development; results.  I suggest limiting the list to no more than ten elements.

Step 3:  Build your dashboard. Once you have identified your success criteria, use that information—along with your site selections—to create a social media monitoring dashboard (a simple Excel spreadsheet will suffice).  Your goal is to create a matrix that will allow you to record all relevant comments from the social media sites you selected.  If you have the resources, I suggest repeating this process so you can monitor the online chatter for your competition.  To do so, you need multiple dashboards—one for your company and one for each of your competitors. 

Step 4:  Start monitoring. The next step is to begin monitoring the buzz on your selected social media sites. Ideally, this should be done on a daily basis.  To start, you might want to first run a pilot test of monitoring the blogs, forums and sites you’ve selected for one month so that you can make any necessary adjustments before moving forward.  As you review the content on your target sites, copy and paste all relevant comments into your dashboard under the appropriate success criteria.  In addition, you’ll want to classify these comments by sentiment (positive, negative, or neutral) and assign a point value to each. 

For instance, consider the following comment:  “I haven’t heard back from XYZ Management Consulting Firm yet, but I just sent my email this morning and the auto-reply said to allow 48 hours for a response.”  This would be considered a neutral comment since it has no positive or negative references, and as such, would receive 1 neutral point.  However, comments often are not so singular in nature, as demonstrated in the following:  “The results were better than we forecasted, but the team only met with us a handful of times.”  Since it spans multiple criteria (results and relationships), I would give this comment 1 positive point for delivering results, and 1 negative point for developing relationships. 

Step 5:  Analyze the results. After recording and classifying all pertinent online comments, you can now analyze the market perceptions of your brand across the defined criteria.  Start out by looking at the total number of positive, negative and neutral comments.  This will enable you to quickly determine how your company fares by each criterion or factor.  Then, within each factor, you’ll probably come across sub-factors.  For example, while strategy is a key factor for any management consulting firm, the online comments may point to strategy in a retail vertical as a particularly important sub-factor.  Overall, you need to cull your findings and look for themes, opportunities, risks and areas to act upon.

Step 6:  Prioritize action items. Now that you have this high level view, you need to prioritize your action items.  For example, if your analysis reveals a perceived weakness in strategy, you might opt to make your firm’s strategic approach a key message in all public relations and marketing initiatives going forward.  Another potential action item might be responding to some comments.  In that instance, it behooves you to reach out to customers/prospects directly—especially if they have a lot to say—because they are likely to continue making similar comments about your brand.  Even if the comments are all positive, directly reaching out to them will help you reinforce a positive brand image, perhaps by offering them entry into a new service that your company is beta testing.  In addition to those who have a lot to say, don’t forget to reach out to those with “extreme sentiment” in their comments, particularly if the sentiment is negative. 

Step 7:  Share your findings. To make this dashboard exercise worthwhile, you need to share your findings with other departments so that all appropriate people in your company can take action.  For example, if there appears to be an issue with your firm’s service level, then you should inform the client services group about it.  Or if your analysis shows that prospects didn’t choose your firm because you don’t have a certain product feature, then be sure to arm your product marketing group with that information. 

Overall, social media offers B2B marketers a low-cost, low-barrier means to gain important customer insights.  And while it’s impossible to know for sure what each B2B marketer will find by monitoring the appropriate social media sites, one thing is for certain:  If you don’t take the time to uncover the online chatter about your brand, your customers, prospects, and competitors surely will.

If you’re a B2B search marketer, chances are that measuring return on investment is key for you.  Considering that, why would you ever want to go down the social marketing path where success is just as unclear as how to measure it? Moreover, social marketing is something predominately used by B2C companies for engagement purposes, right? Why would a B2B marketer even want to bother with it? Well, there’s a good reason to do so, as social marketing offers the B2B set something else entirely.

The hidden value

Beyond its use to gain more influence with current customers and reach new ones, social marketing also offers marketers the opportunity to monitor online chatter so you can hear what your prospects and customers are saying. When used this way, it essentially becomes a powerful market research tool for B2B marketers to leverage.

Instant focus groups

Using social marketing to monitor online buzz is a lot like the qualitative side of market research that taps into focus groups to gain insight into the needs and challenges of your customers and prospects. But with social marketing, your targets don’t need to be incentivized to take part as they are already engaged and active participants in the conversation. On top of that, they’re relatively easy to find (compared to how difficult it would be to locate them if you were recruiting for in-person focus groups). Lastly, these individuals are definitely qualified as they are the very people you need to pay attention to because they are the voice of your brand.

Why it’s worth doing

In general, there are three key benefits to leveraging social marketing as a research mechanism.  Let’s take a look at each.

1. First, leveraging social media to monitor online chatter could provide early indication of a problem, that if addressed quickly, could dissipate rather than “snowball” into something larger. For example, let’s say that you work at a management consulting firm, and that after monitoring industry blogs and forums, you find a trend in the responses that indicates that the perception of your staff is tactical rather than strategic.

With the benefit of this insight, you can take the necessary steps to ensure that strategic thinking is a priority at your organization. Alternatively, if you don’t feel the feedback is valid – you can work to improve the perception of your firm by increasing the exposure of its strategic work. Either way, if in the end you’re seen as a company that listens to its customers and takes the appropriate actions, then your brand awareness could benefit as well.

2. Monitoring your company’s online buzz will not only allow you to understand developing problems, it will also help you learn about new products or services that your prospects or customers want. This information could very well make you a hero in the eyes of your management or product team. For example, say that you work at a management consulting firm that is setup by industry.

While monitoring the online chatter, you discover that businesses in the energy sector would have requested a proposal from your firm had it specialized in their vertical. Armed with this insight, your organization has the opportunity to deliberate on whether or not it is worthwhile to pursue this avenue; whereas without, it might not have been aware that specializing in the energy industry was something worth considering.

3. Lastly, leveraging social marketing as a research tool can also help you get a leg up on the competition. When monitoring the social networking sites, you’ll not only hear what customers have to say about your company, but you’ll also find out interesting tidbits of information about your competitors. After evaluating how customers perceive you relative to your competitors, you can alter your marketing strategy if necessary.

In addition, this monitoring may help you gain more visibility on your second tier competitors. For instance, you may learn that there’s a tier two competitor that’s gaining momentum in the retail sector. If this vertical comprises a good percentage of your company’s revenue, then this insight could very well help you develop a strategy on how to maintain your market share.

Supplement your findings

While leveraging social marketing as a research device can provide an organization with considerable insight on a range of issues – some profound enough to indicate a change in strategy may be warranted – don’t make the mistake of basing the need for change on this one data point.

Instead, consider taking what you learned from your online monitoring, and supplement it with other information sources (i.e.  LinkedIn recently added the capability to survey its members). You may want to survey a diverse group of customers to both validate your qualitative findings and better understand what you need to do before taking action.

Overall, while social marketing is mainly used by the B2C ilk for engagement purposes, smart B2B marketers know that it also can be leveraged as a powerful research tool that can provide important insights.

Despite the black blindfold tightly cinched around my head, I desperately tried to see through it and giggled with anticipation. But then they began to spin me. Dizzy with excitement and determined to take my best shot, I lunged forward. Amid the howls of laughter erupting from my friends huddled around me, I anxiously tore off the mask to see how I had fared. Not only had I missed pinning the tail on the donkey’s backside, I had missed the board completely!

While this age-old game may have been a part of your childhood too, the concept shouldn’t define how you optimize your paid search campaigns. Yet many B2B marketers might very well be taking a shot in the dark. Why? Because they know that a good portion of their revenue is generated offline, yet they don’t take it into account when making bidding decisions.

Understanding the danger Failing to take offline conversions into consideration is tantamount to being blindfolded, and it can cause marketers to make poor bidding decisions because in essence, they are not fully informed about what’s actually going on. Without a complete view of the situation, you could very well be spending too much — or not enough — on some keywords. In fact, you may be focusing on some keywords because you have a gut instinct to, or because the keywords either generate a lot of traffic or are inexpensive, or even just because your CEO wants to be visible on those keywords. Talk about taking a shot in the dark.

Straightforward online tracking Tracking offline conversions is actually quite similar to its online counterpart, which is pretty straightforward. With online tracking, once a user conducts a search and then clicks on a paid ad (containing a tracking URL), a cookie is placed on the user’s computer, and then she is directed to the website. When the searcher then makes her purchase online, she is taken to a confirmation page where a pixel fires. When this occurs, the keyword responsible for the conversion can then be tracked. In addition, you can get the keyword’s cost from the engines so the keyword’s ROI can be determined, as can the ROI of the ad groups, campaigns, and overall program.

How offline tracking differs While similar to the above online approach, tracking offline conversions requires a little tweaking. Specifically, you need a separate “offline” pixel, and you need to get customers to a confirmation page that houses this pixel. Because a cookie is placed on a user’s computer when they initially conduct a search and click on a paid ad, you’ll be able to tell which keyword is responsible for the offline sale. And by taking customers to a “thank you” (confirmation) page that houses the offline pixel, you’ll have essentially mirrored your online tracking system for customers who convert offline. Then, as is the case with online tracking, once the pixel fires, you can receive keyword level revenue data, and marry that with cost data to determine each keyword’s ROI as well as the overall program’s ROI.

Half the battle The only caveat to the above offline tracking approach is getting users to the confirmation page. One way to do this is to send users an email requesting confirmation of their purchase by clicking on a link that leads to the confirmation page (where the offline pixel lives). In addition, you also might want to consider offering an incentive to get customers to click on this link.

Making use of the data But what’s the point of tracking your offline sales if you don’t analyze the data? It’s like going to the doctor for a prescription and not getting it filled. Now that you have your online data combined with your offline data, don’t forget to analyze it! Doing so will help you can make smarter bidding decisions.

Segmenting keywords to improve ROI One way to start analyzing the data is to segment it into three categories: positive ROI keywords, negative ROI keywords, and unknown ROI keywords (ones that you can’t designate because you don’t have enough data on them yet).

Michelle Stern is a Client Services Director at iProspect, responsible for managing the activities of multiple client-facing teams on organic and paid search engagements. She leads overall campaign strategy including the integration of search efforts and other client marketing initiatives. The Strictly Business column appears Wednesdays at Search Engine Land.

Admit it. You know you’ve thought about it. Yet you hesitate. Chances are, you’re probably conflicted, wondering if it’s morally right, or if you really want to “go there” – even if it is legal. Well, you’re not alone. Many search marketers grapple with this decision at one time or another. The issue? Bidding on competitors’ branded terms.

Your hesitancy is both understandable and prudent as this is an important decision. However, it has far less to do with morals than pure business principals. In fact, it should be based on the same standards you measure everything else with: value, risk, and timing. Gaining an understanding of each may help you decide if bidding on your competitors’ branded terms makes sense for you.

Why Google allows it

But before we delve into each of these considerations, it might be helpful to first understand why Google allows advertisers to bid on competitors’ branded terms. Their reason? They claim it fits with their objective of providing relevant results to searchers. And the courts have ruled in their favor.

And while Google’s goal may seem altruistic enough, it’s hard to overlook their other motivation: revenue. After all, this practice only serves to provide them with a lot more of it as buying competitors’ branded search terms is expensive.

First of all, your ad position in the auction is based on your bid and your relevancy to the search query (what Google calls “quality score”). What you don’t have in relevancy, you must make up for with your bid. Naturally, this can translate into a higher price. On top of that, your high bid will most likely increase the cost per click (CPC) for position one for the competitor who owns the trademarked keyword.

Obviously, this translates into a win-win situation for Google.

The value

But regardless of Google’s reasoning and what they stand to gain, you need to decide if bidding on your competitors’ brand is in your best interest. To that end, the first thing you need to do is gain clarity on the value it holds.

For the most part, bidding on competitors’ branded terms offers one key advantage: higher conversions. How so? When users search on branded terms, they are typically at or near the end of their purchase decision process. Consequently, these branded terms tend to have a significantly higher conversion rate than non-branded terms.

Let’s take a look at an example of this in action with two B2B players.

By Appointment Only (BAO) and Hoover’s are in the same industry: business intelligence. Given that, I wasn’t surprised to see that BAO is in position #2 for the query “Hoover’s.” Even though Google probably doesn’t deem BAO very relevant to the query “Hoover’s” (after all, I couldn’t find any part of BAO’s site that mentions Hoover’s), it is relevant to BAO’s acquisition plan. And BAO is smart not to outbid Hoover’s since most folks searching on branded terms know what they want and who they want it from. Being in position #2 allows BAO to still capture some of the searchers who can still be swayed, but at a lower cost than position #1. If BAO were really smart and wanted to pay less per click on the term “Hoover’s,” they should include it on their landing page (perhaps comparing the two products) in order to increase its Google quality score.

The risk

While bidding on your competitors’ branded terms could provide you with additional acquisitions – which in itself may be enough to cause you to take action – there are other factors to consider, not the least of which is risk.

The first thing you need to realize is that bidding on your competitors’ branded terms is tantamount to declaring war, albeit in paid search. Given that, are you prepared for the battle that may ensue? Once you start, there’s a good chance your target will retaliate and bid on your branded terms. Naturally, this will push up your cost.

At first pass this may not sound like a big deal, but think it through. If you’re managing your paid search (PPC) program well, you have an overall objective to meet, and it’s the low cost branded conversions that fund the more expensive non-branded conversions. Once the CPC for branded terms increases, this will cause the overall program’s cost per acquisition (CPA) to increase (so long as your conversion rate doesn’t increase). Then you’ll be faced with the decision of whether to bid lower on non-branded terms, or increase the amount you’re willing to pay for a new acquisition.

The bottom line is that if you are going to go down this road, you need to have the funds ready to support your efforts should competitors start bidding on your terms.

However, it doesn’t always result in such a retaliatory climate. In fact, there’s a chance that your competitors may try to reach a friendly agreement with you, where both parties agree not to bid on each other’s branded terms.

The timing

Aside from the value and risks of bidding on competitors’ branded terms, there are two other considerations to factor in, and both relate to timing.

The first is your competitor’s brand awareness. Quite simply, if your competitor has far greater brand awareness than you have – which of course, translates into more search volume – then it’s worth the risk to bid on their trademarked terms for the incremental conversions.

Our BAO / Hoovers example cited earlier makes a perfect case for this. It makes sense that BAO bids on Hoover’s terms because Hoover’s has far greater awareness than BAO. In fact, according to Google’s Traffic Estimator, Hoover’s branded terms capture at least three times as much traffic as BAO’s branded terms in paid search.

In addition to capitalizing on your competitors’ brand awareness, you should also bid on their terms when they are bidding on yours. Again, some companies feel that it’s not morally right to do so, but this is a mistake. After all, this is a business decision, not a moral issue. For example, when I last checked, Hoover’s was not bidding on BAO’s branded terms. Obviously, only they can say why they have refrained from doing so, but failing to retaliate against your competition, or at least trying to negotiate a compromise in this situation, is akin to surrendering to an enemy without ever putting up a fight. Who knows, maybe after this article is published, Hoover’s will be in position #2 on BAO’s branded terms.

Overall, making the choice on whether or not to bid on your competitors’ branded terms is not an easy decision to make. But marketers need to remember that it is a business decision based on value, risk, and timing, and not a moral judgment. In the end, making the decision becomes easier when competitors are bidding on your ads, or when the volume you could take from them far exceeds what could be taken from you – assuming you can afford the consequences.

Michelle Stern is a Client Services Director at iProspect, responsible for managing the activities of multiple client-facing teams on organic and paid search engagements. She leads overall campaign strategy including the integration of search efforts and other client marketing initiatives. The Strictly Business column appears Wednesdays at Search Engine Land.