eBay Slams PPC: Should You Really Stop Bidding on Brand Keywords? Reviewed by Momizat on . There has already been a lot written about the recent study by eBay about paid search's effectiveness for both brand keywords and non-brand keywords. Most of th There has already been a lot written about the recent study by eBay about paid search's effectiveness for both brand keywords and non-brand keywords. Most of th Rating: 0
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eBay Slams PPC: Should You Really Stop Bidding on Brand Keywords?

eBay Slams PPC: Should You Really Stop Bidding on Brand Keywords?

There has already been a lot written about the recent study by eBay about paid search’s effectiveness for both brand keywords and non-brand keywords. Most of the posts, from Larry Kim’s on Search Engine Journal, to the recap from ppc management experts on Search Engine Watch seemed to focus on eBay’s historical and at times hysterically funny misuse of dynamic keyword insertion. I am not going to focus on those things or even point out that it didn’t work because they did PPC wrong.


I come from a unique background in PPC Management. I started off managing advertisers for a search engine (Lycos) years ago, and most recently managed all of the paid search for Fortune 500 company Choice Hotels, before breaking out into the agency world and Get Found First. So my point of view is different than some. I definitely have issues with what eBay stated but can’t say they were wrong in their findings for them. So what issues do I see with eBay’s study and their general dismissive of paid search?

What is eBay’s position when it comes to bidding on brand keywords?

Let’s start with the first points eBay makes in their case study and specifically around brand keywords. There are so many flaws in their non-brand keyword argument in general I won’t even touch much on it. So let’s take each of their arguments about brand keyword bidding and I’ll give you my take on it.

First, “brand” keyword advertising (where firms purchase advertisements on searches for their own brand name), a practice used by many companies, is ineffective because, absent paid search links, consumers simply substitute to (unpaid) organic search links. This implies that brand keyword advertising expenses have neither persuasive nor informative value to well known corporations, and arguably, for other companies as well.

Basically they are saying buying or bidding on brand keywords is a waste of money because:

  1. It provides no unique informative value
  2. Without paid search ads, users will simply choose to click the organic (or “free”) result or results.

PPC brand keyword ads provide no unique informative info?

For the first one let’s look at one of the brands they pointed out in their study and see if their ppc ad for their brand keywords provides no unique info or value.

att-brand keyword search

 

Now I don’t know about you but it seems pretty obvious to me, that AT&T’s PPC ad (paid) at the top offers unique, informative and valuable info.

  1. First of all their PPC ad focuses on their wireless or mobile offerings instead of, DSL, U-verse digital tv, or home phone offerings which the Organic (free) listing includes.
  2. Secondly it offers current promotions by utilizing site links. I can get a smart phone for $.01 or even $100 off any tablet I want.

For someone who isn’t even in market for a tablet that peaked my interest.

Turning off brand PPC ads is ok because SEO will pick up the slack!

To their second point, that organic is going to simply pick up the traffic and sales which would have come through paid search, may be true for them, but for the majority of companies (yes even well known ones) this isn’t true.

Competition on Brand Keywords in Travel

 

For travel advertisers, the above search engine results page for brand keywords is an everyday occurrence. Can you count the number of ads competing for the users attention? Yep, their are 8 standard PPC ads along with the 3 Hotel Price Ads (which can each contain 3+ ads) which actually occur within the organic local listings (don’t even get me started on that).

Now if Comfort Inn (a very recognizable hotel brand) didn’t bid on their brand keywords would the user (as eBay said), “in reality… have found other channels to the firm’s website”? From what I see and the first-hand experience I have that statement is mostly false for most advertisers. True the user may have booked one of Comfort Inn’s hotels still, but it is very likely it could have come through one of the more costly booking channels like an OTA (online travel agent like Expedia), which many times get what would amount to a 20%+ commission for the booking.

Now let’s look at another example, for what has to be one of the biggest individual brands in the world… the iPhone.

Competition on Brand Keyword Searches Electronics

What really needs to be said about this? I think the point is made that by not bidding on brand keywords it doesn’t necessarily mean that users will go to a brand’s organic listing. There are tons of other options available to them.

Must be nice to not have poachers on brand ppc keywords.

Now eBay did point out that:

one reasonable argument is that competitors may bid on a company’s branded keywords in an attempt to “steal” visitor traffic. Such behavior was absent in our studies

So for eBay this isn’t a problem they don’t see this common behavior. They have to be one of the luckiest brands out there in my experience! Most brands have competitors and others bidding on their brand terms (just look to the examples above)

The real issue is eBay saying this is for everyone.

This study would have just been interesting except eBay pushed that other large companies like theirs (including AT&T, Capital One etc) should heed their study.

These companies generally use the same methods and the same consulting firms to design their ad campaigns and there are many reasons to think that the results we presented above would generalize to these large and well known corporations.

Also:

In lieu of this ad, therefore, the user may just open a browser and type “www.ebay.com” directly into the address bar.

First since when did eBay get in the business of telling other companies of how to do their marketing? What makes them assume that all other big brands would see the same benefit? I think somebody needs to step outside of eBay Labs every now and then.

People use search engines even when it doesn’t make sense.

Secondly, getting to your site may be the users intent, but search has changed the way people do things. Notice eBay the user didn’t just open up their browser and type in eBay. IIn a huge test I did back at Choice Hotels, I found multiple users searching on brand keywords and clicking on ads upwards of 10+ times before converting. They knew the brand, they may even have known the name of the specific hotel they wanted to stay in, and yet they came through paid search, over 10 times before converting! I don’t get it, and I really didn’t get why employees of the company would come to the sites through organic or paid search ads, but it happened. This is normal user behavior now not the exception.

You can pay me whether you get results or not.

One final point I wanted to make in regards to eBay’s concerns specifically around paid search advertising, is in response to this quote from their study.

Our concern, instead, is that the amount spent on SEM (and many other internet marketing channels) is a function not only of the advertiser’s campaign, but is also determined by the behavior and intent of consumers. For example, the amount spent by an advertiser on an ad in the print edition of the New York Times is independent of consumer response to that advertisement

Huh?! You are concerned because you pay when users interacted with an ad as opposed to paying a lump sum to someone like the New York Times regardless of whether somebody responds or interacts with the advertisement? eBay maybe for your next study could you prove the effectiveness or lack there of for offline media buys, like TV, radio and print? I don’t know about you but, it is kind of hard to do direct correlations between how much traffic and sales you get directly from a TV ad, but would love to hear your take.

Your Arguments are invalid!

This meme my friend James Zolman posted a while ago sums up how well I feel eBay did convincing big brands they shouldn’t bid on brand keywords. Well at least it would have come across about as well as their assertions in the study.

your-argument-is-invalid

For a unique perspective on this, and possibly some of the alternative motives why eBay could have done this study read the post by Dennis or better known on Twitter @TheNextCorner

Do you feel eBay did a good job presenting why brands shouldn’t bid on brand keywords?

About The Author

Enterprise PPC Management Executive

Bryant is a seasoned Paid Search Executive. Known by many as the Dr House of PPC, he specializes in consulting with Start-ups and Fortune 1000 companies on their Paid Media endeavors. He has consulted with companies from Choice Hotels & Greendot to start ups like Palo Alto Networks. When he isn't busy rocking PPC, blogging, or tweeting, you will usually find him having fun with his wife & 4 kids. Connect with Bryant on - Google+ LinkedIn Twitter

Number of Entries : 30

Comments (17)

  • William

    Had a bit of talk in the office about this, and this post really sums it up :) What eBay said just doesn’t apply to everyone

    Reply
  • Thomas Ballantyne

    So what you are really saying on if brand bidding is effective is….
    “It depends.”

    Great retorts and I see your points, but I am still in the Ebay camp here and don’t believe I should be bidding on “Bulwark Exterminating”. If they are searching for Bulwark Exterminating online, then my job as advertiser is done.

    But I am with you on the fact that this approach isn’t for everyone. And I also agree that I maybe letting a few buyers slip through my fingers to my aggressive competitors… but I have a feeling that they will be back in the market soon enough.

    Reply
    • Bryant Garvin

      Yeah Thomas, I am saying it does depend, but for most companies, it is not detrimental to do so. Also most companies don’t have the brand and lack of real competition eBay does.

      My thought on not bidding on Brand when you have competitors doing so, is this. Have you ever walked into a store to buy a specific product (you knew exactly what you want) but then as you are walking down that aisle a different brands product right next to the one you were going to buy catches your eye? Maybe I’m unique but I have. Now it doesn’t mean I bought the competing product but it did mean I checked it out, and considered it.

      You have spent a lot of time and money building a brand. I just think if it was my company would I bid on my own brand terms? Would I really want to lose even a few customers because I didn’t want to bid on my brand terms?

      I would for a couple more reasons than mentioned above the first of which, is that most people don’t understand (this is most important in Google) is that accounts have a Quality Score (QS). 99.9% of advertisers that bid on Brand keywords will have the best QS for them and the cheapest CPCs. Those QS of 9 & 10 can help boost your overall account QS which can help to improve your non-brand QS and lower those CPCs as well. That to me is a nice fringe benefit for ensuring people searching for my brand end up on my site, and in doing so my CPCs are minimal.

      Reply
      • Bryant Garvin

        Also, isn’t is a beautiful thing where we are in an industry where people can do things differently and still be successful? That’s one of the things I love!

    • Stuart Draper

      CPC’s tend to be really low for brand owners bidding on their brand. Has anyone seen otherwise or had to paid a ton for their clicks on branded terms?

      Reply
  • angelo

    Bryant, you are right on target.

    Reply
  • Brad Putney

    Here’s my experience in regards to bidding on branded terms:

    • don’t kid yourself, competitors are bidding on your brand
    • branded terms are generally cheaper per click than other keywords Google might substitute when a searcher enters your brand name. Check your matched search query report.
    • ROI on branded terms is generally much higher than all other non-branded terms.

    This is my favorite analogy, granted a little apples to oranges. Imagine you are watching a TV commercial for a Corvette, for 25 seconds nothing is said, the Corvette is put through it’s paces, and causes grown men to drool. Everybody knows it’s a Corvette, everybody knows it’s a Chevy. In the last five seconds they tag the ad with voice over, text, and logo: “Chevrolet Corvette. Find new roads.”

    Bottom line: PPC returns measurable ROI.

    Reply
    • Bryant Garvin

      Thanks for chiming in Brad. PPC can and should return measurable ROI. Now how the ROI is calculated is definitely dependent on your attribution model.

      Reply
  • Bjorn Espenes

    Well said! This is such an emotional issue for so many advertisers, but eBay is way off on this one!

    Reply
    • Bryant Garvin

      It is definitely emotional and has caused some huge disagreements with both companies I worked for and with clients at times. :-)

      Reply
  • matt

    Ebay is just feeling a bit gutted in hindsight and therefore put out a report trying to imply that all the other large companies do the same thing, in that they have been dynamically generating and paying for incredibly broad PPC ads for other peoples products and brands for years albeit, tied to their brand . 50% of the dynamic PPC ads they have been running over the years ( at least in my experience in the UK) are merely a dynamic ad linked to my search term linking though to an irrelevant ebay product search. Would you run an as broad ranging dynamic ad and expect to get the ROI compared to a not so broad and dynamic one? No surprise they stopped this strategy after completing this study.

    Reply
    • Bryant Garvin

      They have spent a ton of money, Matt and it’s true much of their non-brand was a “shotgun” approach not always done well. but then again I am not sure how easy it would be to manage 175 million keywords

      Reply
  • Daniel

    Good article.
    As an analyst at a search agency, having a couple of clients at the top of their respective food chains, I can definitely say there is a big impact on sales. Not only when we don’t bid on brand, but even when our positioning drops.
    This really takes effect when you have a strong brand name and tough competitors.

    Reply
  • Dave

    You kind of touched on this in the section about adding unique informative info, but I think another huge benefit of bidding on brand terms is the ability to control the user experience. Using extensions like sitelinks or product extensions provides a HUGE advantage over simply relying on organic listing to “pick up the slack.” Personally, I would like to have the option to send a potential customer to a customized landing page rather than my homepage. As you mentioned in your example, I would like to throw out a few offers as well and see what appeals to people.

    Reply

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