Unveiling the impact of PPC Google Ads on Branded searches

Quick Summary:

• Brands spend a lot of money on buying their own branded keywords on Google search. The effectiveness of this is questionable as many of the users who click the paid link would have otherwise clicked the organic link without any cost to the brand.
• In this blog post we look at two sectors (real estate and supermarkets) in order to understand the importance of buying own branded search keywords.
• Results show that there is no one-fits-all answer and each sector behaves differently and requires different strategies. While in the Supermarket industry we see a strong advantage in brands buying their own branded keywords (up to a certain point), we see no such advantage in the online real-estate industry.
• ViewersLogic’s new search product, based on Single Source data and advanced AI algorithms finally enables brands to get hard data to enable them to confidently optimise their branded search spend. 

 

Online search is one of the main advertising channels today. While almost all brands use this form of advertising there still is a debate within the industry  about whether it is necessary for brands to buy their own brand name keywords given that if a user types in a brand name, this implies that the consumer is looking for the brand’s website and is highly likely to click on its link in any case. On the other hand, some brands claim that if they do not buy these keywords their competition will buy them and they will lose customers to competitors.

 

In order to answer this question we looked at two sectors (Supermarkets and real estate) and tried to understand the behaviour of the different brands and see the effect of different keyword strategies 

 

Methodology

In order to check whether it is worthwhile to buy your own brand name we checked the following:

 

For each brand in the sector we looked at all the people who searched for their brand name and checked how many users clicked on a paid link, an organic link or a competitor link (paid or organic). We look at the number of paid clicks as a proxy for their branded search budget (the more clicks – the higher the budget) and check whether a higher spend is correlated with a lower number of competitor’s link clicks. If there is no correlation between the two, brands should not buy their own brand name.

 

We will first take a look at the online real estate sector:

Real Estate sector:

The table above shows the links users click after searching for different brands within the industry. For example, 96.5% of the people who search for “rightmove” click on the organic link, 0.1% click on the paid link (which means RightMove spends very little on paid search), 3.2% click on competitor’s organic links and 0.1% click on competitor’s paid link.

 

The table shows that while Rightmove, Primelocation and OnTheMarket  spend very little on their own branded Google Ads (≤1% of users click on these), they lose 3.3%, 5.2% and 9.2% respectively of their branded searches to competitors (e.g. there is no correlation). Finally, we can see that OpenRent, the brand that has the highest percentage of click-throughs on PPC also loses the most to their competition from search to click-through. 

The y-axis includes both competitor’s organic and paid links.

 

The above graph shows that increasing your branded search does not correlate with losing less clicks to your competitors. This is not what a brand wants to see if it bids on its brand terms and it raises questions about the effectiveness of using these. 

However, this is an industry where we can see that brands also bid very little on their competitor’s brand name (in all cases clicks on competitor’s ads is ≤0.2%), which will affect the need for advertising your own brand name. Furthermore, the structure of the industry (two very strong brands – Rightmove and Zoopla and a few much smaller brands) can also affect the results.

 

For this reason, we wanted to also look at a different industry and decided to examine the online behaviour of Supermarkets.

 

The Supermarket sector:

The above table and graph tell a different story that very much supports the use of branded PPC. We can see a strong negative correlation between usage of branded PPC and the number of clicks a brand loses to its competitors. 

However there are some eye-widening results. Firstly, Lidl is the only company in the industry that almost does not use branded PPC (≤1%) and this has a very negative impact on users going to their website, with over 18% of searches going to their competitor’s pages.

 

An important thing to highlight though is that the trendline for the graph is not linear. This shows that the investment into branded PPC has diminishing returns.. Therefore, there is a point that is optimal for any brand where further investment into branded PPC is not an effective use of budget. To assess this, all a brand would need is the lifetime value of a customer and the cost of one PPC, along with ViewersLogic’s Single-Source data, and they would be able to evaluate where this optimal point is. Looking at the data, one could argue that Iceland is overinvesting in their branded PPC, however we need to see their above information to make a concrete assessment. 

 

In conclusion, there is no ‘one fits all’ answer to how much brands should spend on their own paid branded search. Each industry is different and the over-simplified strategy that you need to bid heavily on your own branded PPC is not necessarily correct.

By using Single-Source data, companies can finally confidently answer this question based on hard data.