Is Paid Search Incremental or Cannibalistic?
Earlier this month Google referenced a "study" they did which showed that 89% of AdWords ad clicks were incremental (meaning that they were clicks that the website would not have received if they relied on organic search results alone).
As part of that "study" they stated that "indirect navigation to the advertiser site is not considered." Why did they chose to exclude that segment of traffic? Because they advertiser would have got almost all of it anyway. They never really defined what indirect navigation is though, so you are left to guess as to what qualifies as being part of that segment.
The "study" also stated:
A low value of incremental ad clicks may occur when the paid and organic results are both similar and in close proximity to each other on the search results page. This increases the likelihood of a user clicking on an organic result as opposed to a paid result. Close proximity occurs when the ranking of the organic result is high, placing it near the paid results. Organic results triggered by branded search terms tend to have a higher ranking on average and this may lead to a low IAC value.
So which keywords should you advertise on? And which keywords are buying the milk when you already have the cow for free? According to Google:
A low IAC value does not necessarily suggest a pause in search advertising is in order. In fact, for many advertisers with a low IAC, it is still profitable to invest in search advertising. To evaluate the economic benefits of search advertising, an advertiser must run a calculation incorporating their individual IAC, conversion rates, and conversion revenue. The below equation can help determine whether search advertising is worthwhile on a case by case basis.
Is an Experiment Required?
Google later suggests that a more rigorous test would include a split test experiment that compares a control group against an ad group with paid search ads held back. They then suggest that "many advertisers are adverse to conducting such experiments due to the setup costs involved and the potential revenue impact from having a hold-out group."
What I don't buy *at all* is the suggestion that such studies need to be rigorous & expensive. On the organic search front, Google Webmaster Tools already offers organic search CTR stats by ranking position & ranked page:
And since Google is heavily promoting adoption of the +1 button, they also offer A/B split data for how that button impacts search performance.
If Google provides this data for free for organic search then why (other than protecting their own revenues) do they suggest this data is hard to attain for paid search? If Google respected their advertisers & wanted the advertisers to advertise based on complete data they would make this data available automatically, like they do with the +1 button data.
No "Study" Required
Here is my big problem I have with Google suggesting that I need a quantitative study to know if I should buy my own branded keywords:
- I know I am going to get almost all the clicks anyhow (Google removed "indirect navigation" from their study for a reason, and 3rd party studies have shown how directly cannibalistic these ads are)
- the whole point of building a brand is increased affinity with users & not needing to pay for incremental distribution driven by brand demand. To spend money to build brand only to have to keep rebuying the existing brand equity is quite a futile exercise.
- in the bid auction Google sets arbitrary pricing floors at the keyword level to squeeze advertisers (almost nobody is bidding on "seo book" but if I do Google will want $2 or $3 per click)
- even if I go through said "quantitative study" I end up needing to re-test it every so often as Google arbitrarily juices the ad prices to increase their revenues
- when Google offers the enhanced long sitelinks they are doing so because they think the search query is primarily navigational, yet they still put ads above the organic search results, which IMHO is pretty dirty
- and the dirtiest bit of it all (that smells the worst) is that competing against you in the ad auction is not only arbitrary pricing floors, but also Google itself, which buys keywords against your brand (using their own monopoly money)
Larger Sitelinks Drive Down Competition
Google recently expanded sitelinks in the organic search results to make them take up a huge portion of the above-the-fold screen real estate, driving down attempted organic search brand arbitrage & negative reputation issues.
Driving Down the Search Results
Each month there is another test of some new feature that pushes the organic search results downward.
Zero Moment of Burning Ad Budget
Google promotes a concept called "the zero moment of truth" suggesting that you need to advertise just about anywhere late in the conversion cycle to "be there" and reinforce your messaging.
However, with enhanced organic sitelinks, the brand owns so much of the search real estate that it will lose limited traffic to competitors if it doesn't buy AdWords on its branded keywords. Further, given the ability to block certain sitelinks & edit the page title & meta description you should be able to control the copy on your branded organic listing to make it look and feel like the ad copy you would use in AdWords.
There are some nuanced exceptions though, as brands are not always well aligned with how people search...
When You Should Buy Your Brand Keywords
Short Term Specials & Promotions
If you have an event coming up that you need to promote for a short duration of time then running AdWords ads is a great way to instantly get exposure for that campaign.
In the past if you misspelled keywords Google would put the spell correction right at the top of the page. More recently they have decided to put it below the AdWords ads. So on this type of ad (where Amazon already ranks #1, but has the organic search results pushed down by the ad & then a spell suggestion) I think that ad is burning money.
In other cases, like where you don't rank high in the organic search results, buying AdWords ads on common misspellings is a much smarter idea. For instance, I think this is a smart ad buy by Agoda.
However, in the longrun, if I ran Agoda, I would point a few misspelled links at my website to boost my rankings for common misspellings.
One way to reach misspellings and longertailed searches for your brand is to use an embedded match, where you bid on agoda and then use -[agoda] as a negative keyword.
Brand is Shared By Multiple Companies
Mercedes Benz is burning a bit of their ad budget by advertising where they are irrelevant.
Certainly it makes sense for them to buy exposure for the branded keywords, but in the above examples they should put -kingston as a negative keyword.
When Google Runs Negative Ads
In some cases Google ads promote negative messaging. For instance, while using Gmail I saw an ad suggesting that I should "uninstall McAfee" in a computer that did not even have it.
Buying branded ads in those cases would likely make sense, if for no other reason to compete with & block out risky negative ads that could go viral. Whether Google should even allow such ads is another question for debate.
Big Money Markets Full of Spam
Google was recently clipped by the DOJ for a half-BILLION Dollars for running illicit ads promoting Canadian pharmacies. The DOJ went so far as highlighting that Larry Page knew what was going on & intentionally allowed these ads to run:
Mr. Neronha said those efforts amounted to "window-dressing," allowing Google to continue earning revenues from the allegedly illicit ad sales even as it professed to be taking action against them. Google employees helped undercover Justice Department agents in the sting operation evade controls designed to stop companies from advertising illegally, he said.
"Suffice it to say that this is not two or three rogue employees at the customer service level doing this on their own," Mr. Neronha said in an interview. "This was a corporate decision to engage in this conduct."
After the above instance, Google is perhaps going to be "guilty until proven innocent" where they are running sketchy ads.
In the short run it is likely appropriate to still run branded keyword ads while the issue is getting sorted out, but if you see anything like the following on your branded search results it probably makes sense to fight it on the public relations front in the background while opening the wallet to protect the brand publicly.
And since most major pharmaceutical corporations are routinely fined for running illegal ads, I don't understand why these pharma corps don't have a black hat SEO (or 3) on staff to help manage the search results.
If Google wants brand then give it to them in spades. ;)
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