Brand bidding, a tactic in pay-per-click advertising (PPC) within search engine auctions like Google Ads or Bing Ads, involves advertisers bidding on their own brand terms.
For established brands, there are several reasons to bid on their own terms. It provides a way to control messaging and can keep competitors from poaching that same real estate. Unfortunately, it can also be leveraged to distort or embellish account performance. Who would want to distort performance? Perhaps the "experts" you've hired to run those ads.
The trap often lies in how budgets are allocated between branded and non-branded keywords, a common lever for agencies when their growth campaigns falter. While agencies argue the necessity of spending on brand terms for PPC success, overspending can inflate ROAS, leading to mismanaged client budgets, decreased organic traffic, and increased acquisition costs.
Ideally, brand bidding should never exceed 20% of an account's budget. Yet, I've seen splits as drastic as 50/50. Brand terms naturally convert at higher rates than non-branded ones, as users searching for these terms are explicitly looking for your product or service.
Is there a chance competitors are bidding on your brand to siphon off some of your traffic? Yes, it's quite likely. However, this represents only a fraction of the traffic shifting from organic to paid channels.
What percentage do you think should be spent on brand bidding?
Less than 10%
10-20%
21-30%
30-40%
Is there a chance that competitors are bidding on your brand to siphon off some of your traffic? Yes, it's quite likely. However, this accounts for just a fraction of your traffic that shifts from organic to paid channels.
When Does Brand Bidding Make Sense?
E-commerce Clients with Multiple Sales Channels: For example, clients selling through major retailers and their own websites face stiff competition in SERPs. Bidding against retailers like Amazon and Home Depot can be crucial for top-page visibility.
Defensive Strategies Against Competitors: Although this often leads to a costly bidding war, playing defense against competitors bidding on your terms can be necessary.
Launching New Products or Campaigns: Paid ads targeting branded keywords can effectively promote new campaigns or products to existing customers.
How to Know if It’s Working Against You?
Monitor your organic traffic closely. If organic traffic decreases as paid traffic increases, you might be paying for traffic you would have naturally attracted organically.
When in doubt, experiment. I’m not an absolutist; brand bidding can benefit client accounts under specific circumstances. Test these scenarios, track the sales, and invest in channels that generate sales while maintaining healthy acquisition costs.
The arguments for brand bidding are valid, but be cautious. Some agencies may use this strategy to artificially enhance their performance metrics.
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