Bidding strategy is crucial to success with paid search, and one of the most vexing questions companies often grapple with is whether they should bid on brand terms.

On one hand, there are a number of seemingly valid reasons why a company might reasonably assume it doesn't need to bid on brand terms. One of the biggest: it already has top organic billing for these terms.

On the other hand, knowing that competitors might be bidding on their brand terms, companies might want to bid defensively to ensure that their organic success isn't blunted.

So which approach is correct? To answer this question, Microsoft's search engine, Bing, looked at search impressions for the retail and travel verticals in December 2014.

It compared two scenarios: cases where a brand term ad was present on the search results page and cases where a brand term was not present on the search results page.

The verdict for both verticals: advertisers who bid on their brand terms saw more clicks for themselves and fewer clicks for their competitors.

In the retail vertical, users clicked on the result in the top organic position 60% of the time when no brand ad was present. When a brand ad was present, brands captured 91% of combined ad and organic clicks, a 31% gain.

In the travel vertical, users clicked on the result in the top organic position 61% of the time when no brand ad was present. When a brand ad was present, brands captured 88% of combined ad and organic clicks, a 27% gain.

Bing points out that while some cannibalization of organic clicks takes place – 11% in the retail vertical and 18% in the travel vertical – the 31% and 27% gains in clicks account for this cannibalization.

But the most notable aspect of brand term bidding is the impact it has on competitor clicks. When no brand ad is present, competitors receive on average 40% of clicks. When a brand ad is present, that number drops to 9% in the retail vertical and 12% in the travel vertical.

Bing points out that in some cases, the impact is even more extreme.

One major retailer for instance, saw well over half of clicks go to a competitor when no brand ad was present for one specific brand term search, and one major travel company saw competitors take nearly half of clicks for a variety of common brand term searches.

Put simply, Bing says that "brand term bidding is a strategy that allows you to play offense and defense at the same time" and suggests that brands not engaging in this strategy are at risk of producing a lower "click-yield" even if they otherwise have a strong SEO strategy.

Patricio Robles

Published 26 May, 2015 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)

Daniel Gilbert

Daniel Gilbert, CEO at Brainlabs

Hardly surprising that Bing are pushing their own agenda... we're about to publish our own study on this so stay tuned!

At Brainlabs we use a tool called BrandProtect that leaves Brand campaigns off by default, but re-enables them if we detect any competitor bidding. Mostly we've found that if there are no competitors live then you can't 'lose' traffic, especially if you own the whole first page.

almost 3 years ago

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Andy Herrold, SEM Manager at Caesars Entertainment

No competitors/aggregators bidding on big travel and retail brand terms? Yeah right!

almost 3 years ago

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