Imagine you own a restaurant and one day, a couple of big guys in nice suits come through your front door. One of the men introduces himself:
“Good evening. My name is Gino, and this my colleague, Salvatore. We’re helping local businesses with their marketing and wanted to see if we could help you.”
“Nice to meet you,” you reply. “Of course I’m always interested in getting new customers. Tell me more about what you do and how much it costs.”
“Gladly,” says Gino. “It’s really quite simple. When someone approaches your restaurant, we open the door for them. For every person that comes in, we charge you $1.”
You stop, perplexed. “Wait. That’s not marketing. Those people are already coming to my restaurant. Why would I pay you for my existing customers?”
“I understand how you might be confused about our generous offer,” says Gino, lighting a fine cigar. “Perhaps I can explain it further. You see, if you don’t want to use our marketing services, that’s fine. But I happen to know that many of your competitors are very interested in working with us. And if you don’t pay us $1 for each customer, Salvatore here is going to stand in front of your door and, how shall we say, strongly encourage diners to go to another restaurant. I might add that those other restaurants pay us $3 every time we get one of your customers to go to their restaurant, so we are giving you a very good deal by charging you just $1.”
Does this scenario sound familiar to you? It should – especially if you work in SEM for a large brand.
Every year, brands spend millions buying their own brand terms on search engines. The reason businesses buy their brand terms is simple: failure to purchase them will likely result in competitors showing up at the top of the paid search results when a user types in your brand, an obviously untenable situation.
This isn’t advertising – it’s coercion. Advertising implies a conscious decision to promote your company; coercion occurs when you feel that you have no choice but to spend money to protect your company.
This article suggests some alternatives to the current state of affairs and, more importantly, gives you some easy ways to reduce the cost of brand protection on the search engines.
The Utopian Solution: Ban Brand Keyword Buying
The SEM revolution has disrupted advertising as we know it (and I mean that in a good way). Much credit goes to both the GoTo/Overture/YSM team and the AdWords team for developing tools, advertising opportunities, and reporting that make SEM the most transparent, ROI-positive advertising medium on the planet (sorry, social media mavens).
Let’s be clear: I, and most people reading this, owe my entire career to the smart folks at Google and Yahoo/MSN. Generally speaking, when they succeed, I succeed.
But since my success is tied to the search engines’ success, we all need to acknowledge that search engines are no longer the only kids on the block. Most marketers today understand that successful online programs require a “wide tail” approach, with investments in SEM, display, social, mobile, SEO, and perhaps video. SEM is still growing in terms of revenue, but it’s shrinking as a percentage of online media budgets.
Indeed, eMarketer projects that SEM will account for 18.4% of online marketing spend in 2012 but only 6.6% in 2015. In other words, advertisers have a lot more options today, which makes this the perfect time for the very smart folks (pandering intended) at Google and Yahoo/MSN to start thinking about ways to further increase the value of SEM to advertisers.
To me, the solution here is simple: search engines should prohibit bidding on all brand terms. I’m talking about everything from company brands, like “Travelocity” and “One Kings Lane,” to product brands, like “iTunes” and “Xbox” (of course, the brand would have the right to proactively allow specific resellers to buy terms if they wanted to).
Initially, this would cost the search engines millions a year in lost revenue (I have seen many six-figure monthly accounts where 50% or more of the cost goes to brand keywords), but ethically, it’s the right thing to do, and it would hopefully lead to greater long-term investment in SEM.
For the record, as the leader of an SEM agency, eliminating bidding on brand terms would cost me a lot of revenue as well, but I’m willing to fall on the financial sword in the name of what is right for my clients.
Before you call me a Pollyanna for suggesting search engines pursue a strategy that goes against their financial interests, I’m not the first person to argue this point.
Consider this observation:
“Furthermore, advertising income often provides an incentive to provide poor quality search results. For example, we noticed that a major search engine would not return a large airline’s homepage when the airline’s name was given as a query. It so happened that the airline had placed an expensive ad, linked to the query that was its name. A better search engine would not have required this ad, and possibly resulted in the loss of the revenue from the airline to the search engine.” [Emphasis added.]
That was written way back in 1998 by two graduate students at Stanford named Sergey Brin and Lawrence Page in their paper, The Anatomy of a Large-Scale Hypertextual Web Search Engine. And yes, I recognize that this particular example refers to the intersection between paid and organic results, but the message applies equally well to buying paid search brand terms: search engines should not require brands to pay when someone searches for their brand!
The search engines make the argument that showing competitors’ ads on brand terms increases choice and relevancy for consumers and thus makes for a “better” search engine. This may be true, and here’s my suggestion: continue to allow advertisers to buy their competitors’ brand terms, but give the trademark owner free ads on their own brand terms.
In other words, if you can demonstrate that you own a brand, any brand keyword you buy is treated as if it is an organic click, and you aren’t charged. And of course, since your Quality Score should be astronomically higher than your competitors, you should always end up in first position.
How To Protect Your Brand For Less
So do I believe that Google (or MSN/Yahoo) is going to suddenly embrace a brand-friendly/revenue-negative policy? Of course not; though if MSN wanted to forever endear themselves to SEMs and get a lot of great publicity, this would be an awesome way to do so!
As such, assuming that the future of SEM will continue to involve a lot of forced brand keyword buying, here are a few ways to reduce your brand term costs:
- Talk to your competitors. If you are on reasonably good terms with your competitors, consider calling them up and asking them for a “brand term truce.” In other words, you won’t buy their brand keywords if they won’t buy yours. If you can get even a few of your competitors to agree to this arrangement, you’ll both save money on brand terms.
- Send cease and desist letters. If you aren’t on good terms with competitors, send in the lawyers. Sending competitors a threatening letter from an attorney may scare them enough to stay away from your brand terms.
- Send a trademark complaint to the search engines. While the search engines won’t block competitors from buying your keywords, if you send them a complaint letter, they will prevent your competitors from using your brand term in their ad text. At a minimum, this should reduce their click through rate (CTR) and increase their costs! Here’s Google’s form and AdCenter’s form.
- Police your affiliates and resellers. Create terms and conditions for your affiliates and resellers that prevent them from buying your brand terms (or misspellings thereof) or risk ending their relationship with you.
- Use ad extensions. Ad extensions take up more space and push your competitors further down the page. They also increase CTR and reduce CPCs. In the example below, the brand added enough ad sitelinks to swallow up the entire paid top section. (There are a number of extensions you can use in AdWords; take a gander at the full list.)
- Last but not least, ad text. Your CTR should already be awesome on your brand terms, but testing ad text can result in even higher CTR and lower CPCs.
Ultimately, even if you apply all of these techniques religiously, you’re still likely to end up paying a hefty sum for your brand keywords (and the bigger your brand, the more you are going to pay).
It’s worth noting that there is a glimmer of hope on the horizon: a lawsuit is currently making its way through the court system alleging that Google is guilty of trademark infringement for allowing competitors to buy trademarked keywords and use trademark terms in ad text.
This suit, originally filed by Rosetta Stone, now has support from numerous large brands, including Ford, GEICO, the NFL, United Airlines, 1-800 CONTACTS, and Rolls Royce, among others (and, worth noting, Yahoo and eBay have filed briefs in support of Google). If Rosetta Stone wins this case, competitive brand keyword buying could end forever.
Until that moment comes, however, aggressively manage your brand terms as best you can and keep a large portion of your SEM budget available to protect your trademark. That’s an offer that you unfortunately can’t refuse!
Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.