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For this month’s post I thought I’d share a practical example of how you can use testing to validate the impact of your paid search campaigns.

This is aimed at client-side digital marketing teams and agency staff who are learning the paid search ropes and might not fully understand the interaction between SEO and PPC.

The example I’m using is a test plan that seeks to answer the question “Does investment in brand keywords cannibalise or deliver incremental sales?” 

This is based on the most common form of paid search, Google Adwords.

This is a common question web managers ask agencies. Many marketers believe that driving transactions and revenue from brand campaigns is easy (that’s not strictly true – there are easy wins but it takes intelligent optimisation to maximise reach) and the real challenge is with generic keyphrases.

However, it’s a dangerous assumption to make that brand investment is not required because searchers will find organic listings for all brand keyphrases and click.

This is often not the case. You need to understand the implications of query type (exact vs. phrase vs. broad) and brand + generic keyphrases (where your brand name is found in a keyphrase with non-brand terms e.g. argos camping tents) on your SEO visibility. 

If you have a PPC brand campaign using broad match, it’s possible that for some variations of the matched queries, your organic listing will not be in the top position. For SERPs with high paid search/inclusion competition, being outside the top two positions means being below the fold.

Paid search can be a sensible investment to plug these gaps and enhance your search presence. This blog is a walk through of how I approached a recent Client project to try and prove the value of continued investment in paid search brand campaigns.

Setting the challenge.

“Prove that I need to spend on brand keywords”.

 There are several reasons why but proving them requires more than quoting research and ‘best practice’. The main reasons I would suggest are:

  1. Some online searchers will click on paid search ads over organic listings. As the variety of paid search increases (e.g. image ads, email sign-up box, sitelinks), people are being conditioned to use sponsored ads.
  2. Protecting brand territory is important online. Paid search can plug gaps in SEO coverage and support your organic listings.
  3. Paid search is a great place to experiment with copy and calls to action, which can then be used to optimise webpages for SEO to target increased click through.
  4. Reinforcing your presence with paid search provides brand authority and can help increase the likelihood of a click on your organic listings.
  5. Google relaxed its T&Cs for bidding on competitor brand terms. In competitive markets, a lack of brand focus can mean conceding search real estate to your competitors when people most want to find you.

Now on to the proof. Below is a walk through of the test I set up to help prove what the real impact of brand investment was on overall paid search KPIs. I’ve split this blog into the stages of the test plan that I followed.

After reading, tell me if you think this was a good test or if I have missed something. There are always ways to improve the quality of testing.

Stage one: test objective

You should design the test to add value to the business, not just serve as a vanity project. Define exactly what you want to achieve and how you will use the learning from the test.

This really helps when a Director questions what you do with your time. If you can demonstrate that you’re planning a test designed to increase ROI & minimise cost, it comes across more positively than saying “oh, messing around with some data”.

In my example the objective is:

“To prove that investing in brand paid search delivers incremental sales revenue & identify keywords that can be removed to reduce cost without adversely affecting overall sales (including SEO & assisted conversions).” 

Stage two: test hypotheses

This outlines the reasons for doing the test and the criteria that you are trying to prove or disprove. These really help the other people involved to grasp what you’re doing and help shape the test plan.

In my example the hypotheses are:

  • If we don’t invest in brand paid search campaigns, we will reduce our overall number of transactions and website profitability.
  • The loss in sales by cutting brand investment will outweigh the reduced marketing cost.
  • Stopping brand campaigns will lead to an increase in visits and revenue from organic branded keyphrases.
  • Stopping brand campaigns will lead to a decrease in assisted conversions where a brand paid search keyword is involved.

The rationale is that research and best practice show a clear link between paid search and SEO and that brand coverage is important for search marketing but there is not data for my Client to prove this beyond doubt (GA account created the same time as the PPC project, so no historical data to compare).

Stage three: defining the test structure

Now this is the hard part. How do you create a test that covers the angles? I’m still not 100% sure mine does, even though I’ve pulled the methodology apart many times. But here goes, I’m opening myself up to tub thumping and cries of incredulity:)

The first thing I decided was that I didn’t want to simply pause all brand ads – given the revenue contribution, that wouldn’t go down well. Instead, I wanted to target a focused hitlist of keyphrases – the premise being that if these provided a significant result, the test could be expanded/refined.

 I worked out the following approach: 

  • Select keyphrases to include in the test based on past six months Google Analytics data (including some of the main traffic drivers).
  • Identify AdWords campaigns the keyphrases are featured in: exact, phrase & broad match.
  • Agree with PPC agency how to exclude these keyphrases from campaigns without affecting other keyphrases.
  • Benchmark data for last click sales from paid search and organic for these keyphrases.
  • Benchmark data for assisted conversions for these keyphrases.
  • Run the test over a full week period to include each day of the week and the full 24hrs for each day (taking into account any day-parting influence).
  • Define KPIs and export the data for the three months prior to the test, the week of the test + the following month (need to ensure data trends aren’t seasonal/influenced by external factors, so post-test comparison is useful).

Nailing the brand keyphrase hit list

I decided the best way to decide was to review Google Analytics paid search data for the past six months and download the e-commerce data into Excel. From there I opted to sort by Per Visit Value as a first stab.

Why?

Well, visits isn’t enough. What if I only picked keywords that drove traffic but low conversion? Wouldn’t I be missing a trick?

But ignoring visits is also short-sighted. What if keywords with high visits and low conversion rate (remember this is last click) actually contribute a lot of assisted conversions? Or have a high average order value? Headache kicking in.

After deliberating the mystery of life on a mountaintop for several months, I decide to shortlist brand keywords that satisfied one or more of the following criteria:

  • High Per Visit Value – defined as over £1.00.
  • High level of visits – defined as over 1,000 per month.
  • High number of transactions – defined as over 100 per month.
  • High revenue contribution – defined as over £1,000 per month.
  • High average order value – defined as greater than site average (I perhaps could have chosen the aggregate search AOV as a comparison).

[Please note the thresholds above were set based on the values distributed in the data and these will vary for each website]

This resulted in a targeted list of approximately 20 keyphrases containing the brand keyword(s).

Why didn’t I include every keyphrase?

  1. There were >2,500 individual keyphrases containing the brand term
  2. >80% of these had less than 10 visits per month
  3. The effort to mine data and do the comparison on this volume of keyphrases, given the minimal visits/conversions/revenue, would have made the test a bloody nightmare! (plus I’m a consultant so I weep at the prospect of real work).

Stage four: defining KPIs and benchmark data

This is the fun bit. You need to create a master data set from which you can do the analysis. I find Excel easiest as I can import source data, manipulate it, whack in some formulas and create a management sheet with some nice visualisation of the data.

Top line analysis for brand traffic

To ensure I didn’t under-estimate the impact of pausing brand campaigns, I tracked the total numbers for all brand paid search visits. This ensured there was a snapshot of the long-tail as well as keyphrase level analysis. 

This also let me determine any substitution effect whereby pausing the most popular brand keyphrases had an uplift effect on other brand keyphrases.

I could see this by plotting total vs. test keyphrases on a line graph – zero effect would be shown as the two lines following an identical pattern.

Weekly KPI tracker

This was the meat and drink. I decided to export the key e-commerce variables from GA:

  • Visits
  • Transactions
  • Conversion rate
  • Revenue
  • Average order value
  • Per Visit Value.

I didn’t just want to see the impact on visits, I also wanted to analyse the impact on the quality of visits. For example, did removing paid ads simply screen out the hottest prospects (which could be shown by a decrease in conversion rate, average order value, per visit value etc)?

To do this I did a dump of all keyphrase data (by week) and then used lookups to create a master view and charts to visualise the trends (see below). This was done for both paid and organic search (remember, we’re evaluating the overall impact on search). 

Annotating GA reports

A late realisation was that marketing campaigns could bias the data. For example, if a full-run national press insert launched the week before the test, this would inflate brand search in that week. Any comparison would be inaccurate.

Luckily GA has a handy feature – annotations. I added notes for every major piece of brand marketing during the test period. This meant that when I looked at data timelines in GA, I could see where peaks followed marketing campaigns. In the data I flagged these weeks by shading the cell backgrounds (see below).

Stage five: validating the benchmark data

It’s important to make sure the data is accurate before doing any analysis. Otherwise, you risk drawing erroneous conclusions.

This is a really simple, quick step. For each KPI, I cross-referenced key GA reports (e.g. Traffic Sources > Search > Organic) and sense checked the numbers showing in my lookup tables.

Any discrepancy led to scrutiny of the data export and formulas.

Stage six: confirm test plan with all parties involved

So, so important. There will be multiple parties who need consulting and their input considered. These typically include:

  1. Web manager. Needs to ensure the test is aligned with key trading activities and major campaigns (e.g. don’t pause campaigns when there is a major offline press campaign that will drive online brand searches – throwing away money).
  2. PPC agency. They need to validate how to structure the test to ensure the relevant ads are paused and keywords excluded (e.g. for ‘exact’ match campaigns, are these using ‘near exact match’ so excluding a keyphrase might not 100% block the ads from appearing)
  3. Marketing team. You don’t want to spoil sales from major campaigns by not telling them your paid search ads are going to be offline (=trading meeting stand-off!).

Get everyone in a room. If that’s not practical, organise a conference call or Skype session. Run through the plan and how it is going to work. Get their feedback and if needed, update the plan (note: whoever manages your PPC should be involved from the start so they can support you effectively and understand the reasons for the test).

Don’t start the test until all parties have committed and the roles & responsibilities + timelines are clear. If you ignore this, you risk compromising the test and invalidating the data.

For example, one test I was involved in didn’t work because for some phrase match campaign negative keywords weren’t added, so whilst the keyword didn’t appear on exact match, it came up in phrase match searches.

Stage seven: running the test

This was the easy part. I called up the PPC agency, shared the data, ran through the test plan for a final time and agreed a date & time to put the relevant changes in place in Adwords. I made sure my Client approved this in writing by email.

We decided on midnight as the start time so we’d have a clean 24hr period for each day of the test.

The first thing I did the morning of the first day was to run searches for each keyphrase in Google to ensure the ads weren’t showing as planned. Luckily the set-up worked and no ads appeared, so the test was validated.

I sat back, congratulated myself on a job well done. Then realised I’d done the easy part. I still had to analyse and interpret the data.

Stage eight: evaluation, analysis and outcomes

Stars In Their Eyes moment – does the data support the hypotheses?

I followed a series of logical questions to reach conclusions:

  • Are there clear trends in the data?
  • Are these trends consistent across each keyphrase?
  • Is there a clear correlation between pausing brand bidding and organic brand traffic/transactions?
  • What is the total impact of pausing the ads (loss of last click revenue + loss of assisted conversion revenue)?
  • Is this loss offset by the increase in revenue from organic search (increase in last click revenue + increase in assisted conversion revenue)?
  • Do the top-level numbers rise or fall when brand campaigns are paused?
  • What external factors (e.g. marketing campaigns) are influencing the data?
  • What data do we need to discount because it has been compromised?

To help factor in the influence of marketing campaigns, I plotted the test data against direct traffic.

Why?

Direct traffic is a good indicator of brand visits generated from marketing campaigns (online and offline).  If Direct visits are increasing, this can be attributed to external factors. Therefore, it’s important to plot search against direct to compare the data trends around the test period.

What did I learn?

First, I proved my key hypothesis – investment in brand paid search delivers incremental revenue. As soon as we paused the ads, the total revenue from search dropped and wasn’t fully compensated via other channels (even when we factored in the external influence of marketing campaigns).

There were other interesting observations:

  • Decrease in visits and transactions from organic brand search (I was surprised as had expected a slight increase, for obvious reasons)
  • Average order value fell (could this be down to losing sitelinks in ads? Unlikely to be seasonality as other channels didn’t have a similar dip).

[Please note that these findings shouldn’t be taken as gospel for all websites. The impact may vary depending on your audience and the markets in which you operate. However, the findings do broadly support best practice thinking for search engine marketing.]   

How do you approach paid search testing?

Have you run a similar test? If so, what did you learn?

Do you think I’m talking sense or need a sharp drink?

I appreciate that this is a long post but hopefully it has helped demonstrate the detail that is required to effectively plan a test. Success in e-commerce often comes down to the quality and detail of planning.

Please drop by with comments and opinions based on your experience. If you have other examples of useful tests and/or links to relevant blogs, please let me know and share the links.

James Gurd

Published 17 September, 2012 by James Gurd

James Gurd is Owner of Digital Juggler, an ecommerce and digital marketing consultancy, and a contributor to Econsultancy.He can be found on on Twitter,  LinkedIn and Google+.

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Comments (23)

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Mike Wheadon

Mike Wheadon, Digital Sales Trainer at Trinity Mirror Plc

Some really interesting insight James, a well constructed and executed test with valid conclusions that I would propose supports all digital marketeers natural supposition that paid brand search is simply another response channel. Would you have any insight into the actual numbers involved?

almost 4 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Hi Mike,

Thanks for adding your comment.

I can't give numbers due to confidentiality but in % terms, brand is 80% of revenue for paid search. The interesting number is that revenue from organic brand terms dropped by about 15% during the test when I would have expected a compensation effect leading to a slight rise.

Thanks
james

almost 4 years ago

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Depesh Mandalia, Head of Digital Marketing at Lost My Name

Great stuff James. Experience tells me the same but this article is a good future reference point, thanks for taking the time to write it up. Agree not all businesses will feel the same benefits so its a good template too

almost 4 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Hi Depesh,

Glad it serves as a useful reference point. I thought it would be an interesting read for some e-commerce peeps given the number of time this subject comes up in conversations. We all know the 'theory' but it's interesting to actually test and prove it.

Thanks
james

almost 4 years ago

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Depesh Mandalia, Head of Digital Marketing at Lost My Name

like you signed off at the end of the article, be good to see other's share some numbers too...

almost 4 years ago

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Ana Campos, Digital Product Manager at Personal

Hi James, I really like this post. Excellent insights and detailed info that will be very helpful to me and, I'm sure, to many others. Interesting to see the 15% drop in revenue from organic brand terms.

almost 4 years ago

John Sinke

John Sinke, Assistant Vice President Digital Marketing & e-Commerce at Resorts World Sentosa

James, interesting article and great insights into one of the most talked topics in Paid Search. Most agencies (and Google!) tend to talk about assumptions with regards to spending money on Brand Keywords, but your test shows a clear business case for investing in Brand Keywords, thank you!
Regards, John

almost 4 years ago

Arsen Pakhlevanyan

Arsen Pakhlevanyan, Marketing Manager at _

James, thanks for sharing this with us. It's interesting seeing how brand keywords affect revenue from organic search results. Of course the results may vary depending on industry/company, but the concept and need for research will remain the same.
Thanks again, Arsen

almost 4 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Morning all,

@Ana @John @Arsen

Thanks for the comments and glad the write up has been useful/insightful. I was hoping that would be the case as when I was Client side, I often came up against the knowledge that what I was doing was right but without specific proof from my own data. It's often hard to get a test like this through as it can have a short-term negative impact on revenue.

However, it's good to know that the investment in brand is delivering value. Plus it also makes you re-focus on how to improve organic visibility and click through for brand + generic key phrases!

@Ana - I think the drop in organic revenue is unique to this Client. I can't explain why as that is sensitive info, but for some brand broad/phrase match options, they will not appear no.1 in SERPs due to non-competitive brands with very similar names having a stronger domain reputation (+ stronger SEO such as external links).

Thanks
james

almost 4 years ago

Neil Whitehead

Neil Whitehead, Digital Executive at Impeyshowers.com

Another inspiring read James, The correlation with paid brand presence alongside organic is a real minefield.

Any clues as to the ecom market sector FMCG? leisure?

almost 4 years ago

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Matt Dailey

Hi James,

Solid test and very good of you t share such a detailed breakdown of the test strategy. As a follow on/next stage test, I would suggest pausing brand keywords and then re-investing that spend into key generic terms that might not be covered effectively due to budget constraints and above average CPA's. In my own experience on one client in particular, I found that when Brand terms were paused, Organic made up some of the deficit in volume that resulted but by re-investing the spend from the paused terms into location based generics (which were key to the industry sector and dominated by competitors with deeper pockets), the overall effect was a net increase in sales volume and value driven.

almost 4 years ago

Russell McAthy

Russell McAthy, Digital Marketing Consultant at Stream20

Great Article James,

This is something that is a staple in any attribution project where you look at the relevancy of brand led keyterms and their location within the buying cycle.

Great planning methodology that anyone can plug and play into their company

almost 4 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Arvo all and thanks for the new comments.

@Neil - this is for a generalist retailer, covering many product areas including home & garden.

@Matt - interesting idea to re-invest in generic. That is a future thought but currently generic is under-performing and until we nail the reasons, the investment isn't justified. Interestingly in this test, organic didn't have the expected uplift due to the reasons stated - not 100% brand coverage due to the brand name being similar to other non-competitive sites, making it harder to get above the fold visibility for brand + keyphrases.

@Russell - thanks for dropping by and glad you think the methodology can be applied to other businesses.

Thanks
james

almost 4 years ago

Mike Wheadon

Mike Wheadon, Digital Sales Trainer at Trinity Mirror Plc

Thanks for the numbers James, in my own experience, and we never so rigidly tested in this fashion, we found a much greater proportion of our business driven from brand terms but equally reducing spend on these terms affected organic traffic also, probably by a greater margin than 15%. The question it raises in my mind is the empowerment of affiliates around brand terms. I know some e-com businesses that have had success utilising the commission hungry CPA market in the brand bidding space.

Thought provoking indeed.

almost 4 years ago

Russell McAthy

Russell McAthy, Digital Marketing Consultant at Stream20

The important thing with brand bidding affiliates is ensuring that they are not canabilising your traffic / sales

Checking ad copy and landing pages should be the first point of call before you start throwing away money on a CPA model

almost 4 years ago

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Matt Lovell, Group Head of Customer Insight & Analytics at Thomas Cook AirlinesEnterprise

Very interesting test James. What would be good to understand is the extent to which the Brand keywords you're referring to are brand + product or brand + generic not to mention the SEO position on these as I imagine this probably has a significant effect on results.

I ran a similar test very recently at my previous employer and we saw a range of results which were heavily dependent on:-

* SEO position on a given keyword
* SEO position of direct competitors and the content in between the two (we found that in some cases, competitors appearing in position 4 or 5 was absolutely fine as long as the content in positions 2 and 3 was enough to stop users scrolling)
* The copy running for the PPC test

One thing I did note from your article though is that you were using historical data as means of understanding seasonality / the effects of marketing. I would suggest there is a much better solution in just using Google Trends. This gives you a much clearer idea of the ratio of searches by day for a given keyword and allows you to get a much better idea of whether PPC & SEO is delivering more or less traffic than SEO alone.

The other thing I would suggest is that to run the test as robustly as possible you really need to be ensuring that you are both on exclusively 24 hours a day for a week but also off in the same respect (24 hours a day for a week) to give you a direct comparison. Otherwise the risk is that you are comparing some PPC presence with none and the figures can sometimes prove misleading.

Ultimately, we found ourselves able to start building a plan for future investment in PPC base on SEO position, competitor listings and how aggressive our offer was (even on the pure brand term you could drive as much as 16-18% additional traffic to the site and drive an improved conversion if the offer was ridiculous..)

almost 4 years ago

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Abhinav Mathur

Really nice article, some very interesting comments.

almost 4 years ago

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Lekan Adetifa, Head Online Acquisition at Moi

I like articles like this that gets me thinking and the comments helped even more (thumbs up James)

I notice a flaw in this test that skews the relevance of the test to drive valid conclusions for other industry players.

Something James didn't write into the body of the test as he developed the methodology is, this retailer has a near generic brand name and doesn't even make it (my deductions from James' comment in comment section) into top 1-3 of 40% of brand related queries (especially brand+product/generic)

For a test like this to be +90% valid to help drive conclusions for other players, I believe the (a) brand should be made to reach a "brand uniqueness" %% and a level of SEO strength (which seems acutely lacking in the case of this retailer from James' comments above)

My conclusion from the SERP positioning of this retailer, domain/SEO strength is that you can be roughly 85% certain brand bidding will drive incremental value without testing (the test was a good exercise though and sharing it was/is even better)

I worked (as a consultant) on Sainsburys non-food PPC campaign once and running this type of test (same methodology) on a retailer like this will provide even better conclusions to the test.

Sainsburys hugely fulfils brand uniqueness, domain strength and 99.9999% of the time will rank at 1-3 for all brand related queries.

There is also in my mind an easy answer to the issue of decrease in visits and transactions from organic brand search in the evaluation, analysis and outcomes section.

Considering the brand the test was conducted on had a "generic" brand name and didn't even have a decent number of top 1-3 positions for brand+generic terms.

You must have heard it too many times that running paid search campaigns also has a branding effect as it contributes to prospect confidence, thus, relatively more clicks on organic listings than when you don't run a PPC campaign.

It's even more valid for this retailer as a great number of brand+product/generic phrases will occupy outside 1-3 positions.

almost 4 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Morning all and thanks for the interesting comments and suggestions/thoughts.

@Mike - useful for me to know that you've had a similar experience with organic drop-off when pausing brand bidding. Your comment about affiliates is an interesting one. When at Betterware I pushed PPC inc brand to a trusted affiliate partner on the basis I had such a small marketing budget, I could use that on SEO, email etc. I also had an agreement with my affiliate that they would invest a proportion of their brand PPC commission into generic campaigns.

What did I find? We nailed the brand traffic and revenue but actually when I compared the margin loss from commission, it didn't make outsourcing financially viable. That said, I didn't then have such a rigorous approach to measurement and analysis, so it's possible I didn't get the right detail.

@Matt great comments and useful insight, thanks. The keywords were not brand + product, they were pure brand and brand + generic (e.g. brand shop / brand offers).

Google Insights is good for trends but it doesn't overlay campaign dates - for that you need to use web analytics reports with annotations, or have a data export with events flagged. Hence the extract of historical data.

Your point about SEO position is spot on - I alluded to that in the post, the issue that for some brand + keyphrases, my Client doens't have top spot nailed because the brand name is quite generic and there are other domains out there, non competitive, that are very similar. This means that without paid search to secure brand positioning, SEO can often be down in 2, 3 or lower place, reducing likelihood of a click.

@Olalekan - you're right, a brand with a 100% unique name (e.g. SEOMoz) will produce different results. As I pointed out in my conclusion, the results may not be directly applicable to other websites. What I wanted to get across is the methodology used to answer a common question. Regardless of 'good practice', sometimes you need to provide proof to decision makers to get them to buy-in to the continued investment. My contact, the Head of E-commerce, now has the proof to put that niggling question to bed and focus on more value add elements of search marketing.

Thanks
james

almost 4 years ago

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Ollie

Hi James,

What are your thoughts on using Googles 'Adwords Campaign Experiments (ACE)" to run a Brand test so that seasonality/weekly fluctuations do not affect the results?

My thought is that when running a Brand test there should be no budget cap placed on the Brand keywords (as there is no cap on organic brand clicks) and so using ACE would not be valid as only a certain amount of budget is given to the 'experiment' keywords. Do you agree?

almost 4 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Morning Ollie,

That's an interesting point. I'm not an expert on the AdWords interface as I work with freelancers and agencies who do that side of paid search for me, so unfortunately I can't comment with any authority.

However, I'll now be asking those freelancers and agencies for their take. Thanks for raising an interesting question.

I agree in principle that capping budget for the brand keyphrases during a test isn't ideal - for our test, there was no budget cap but to be honest, that's more because the volumes aren't high enough to make capping an issue, rather than me having explicitly thought of that as a requirement of the test. Useful insight for me for next time, so I can improve the test methodology.

Thanks
juames

almost 4 years ago

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Antoine

Things we know, things we test, things we read... Very well written blog stating some obvious things. Point Three is one to keep in mind for whoever want to nail it.
Without divulging client name, we had to test so many times and go through same process when we worked with a leading company which brand included main product keyword : 'ironmongery'.

This post deserves a good translation in French though... ;)

almost 4 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Salut Antoine,

Merci pour avoir contribuer a la discussion.

Desole, mais je ne peux pas traduire tout la texte - mon francais n'est pas si bon!

Pour moi, il est interessant que tes expériences sont similaires avec votre Client.

Veuillez connecter avec moi sur Twitter - @jamesgurd.

Merci
james

almost 4 years ago

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