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The branded keyword controversy resolved?

The branded keyword controversy resolved? Alan Osetek

In the last several weeks, much has been written about the recent Microsoft/Atlas study related to branded keyword spending. The study found that a significant portion of search ad spending is wasted because advertisers pay higher rates for ads clicked by consumers who are headed to their websites anyway. Listings tied to such "branded" keywords, typically a company's name or products, can account for more than 50 percent of search budgets. In response to this study, many industry watchers and bloggers have attempted to


In our experience, the best way a marketing organization can understand the value of branded keywords is by conducting its own analysis. We all know every business situation is unique. Marketers should study their own websites and online media data taking into consideration the effects of brand keyword impressions and the attribution of other media channels on the final branded keyword click.


The below case study describes how one Fortune 500 company conducted an analysis of it's branded vs. non-branded keywords to determine the true effect on sales and return on ad spend (ROAS).


Case study
To test the Atlas theory related to the value of branded keywords, marketing analytics firm Connexion.a analyzed six months of historical data of branded vs. non-branded keyword cookie level data for this Fortune 500 client. The goal was to determine the true effect SEM branded keywords had on overall sales and ROAS.


In the first three months, the client only bought unbranded keywords and the subsequent three months purchased branded and unbranded together. This keyword data included 700+ branded and 1,500+ non-branded keywords. The product being advertised was not seasonal and advertising via other media channels remained constant during the six-month testing period.


Results
The results of the branded/nonbranded analysis were clear: By spending 17.72 percent of the budget on branded keywords, and reducing the unbranded budget by 5.09 percent, the campaign produced 91.37 percent ROAS compared to 58.22 percent ROAS by having unbranded only. The branded keywords alone produced 211 percent ROAS.


Additional findings/insights included:


Finding: For the increase of 12.63 percent search-spend, introduction of branded keywords produced 30.96 percent more search-conversions.


Insight: In the first three months, the client was losing conversions to affiliates and competitors who were bidding on our client's branded keywords.


Finding: Total CPA came down 19.7 percent when the client used branded keywords.


Insight: The costly unbranded keywords clicks were balanced with less expensive branded keyword clicks.


Finding: Even with a 5.09 percent reduction in spend, the unbranded keywords gained 6 percent more conversions when branded keywords were used.


Insight: The branded keywords added more awareness in the market for repeat-search users.


Finding: The attribution lift provided by online display media and DRTV were 23.51 percent and 7.57 percent respectively for branded keywords.


Insight: Consumers who had touchpoints with other types of advertising are more prone to type branded keywords compared to unbranded.


Finding: With the inclusion of branded keywords, paid search and organic revenue improved 27.01 percent and 6.7 percent respectively.


Insight: Most publishers are reducing the space for organic search results and adding more space for paid search and contextual ads. Our analysis showed the branded paid listings accounted for a few clicks that would have been gone to organic listings in the absence of branded keywords. However, the CPC cost of branded keyword clicks is much less than the incremental revenues generated by the branded keyword conversions.


Lesson learned
While debate regarding the value of branded keywords may continue, the key lesson learned is for each marketer to understand the true value of his own branded keywords' strategy in the context of the overall marketing efforts and measurement of impact.


Alan Osetek is the EVP of Connexion.a, a leading provider of ASP-based marketing optimization managed services for agencies and advertisers. Read full bio.


 

Alan Osetek is Chief Executive Officer at Digilant, the paid media arm of ispDigital, in charge of the company’s business development and expansion worldwide. Prior to becoming the CEO at Digilant, Alan was the Global President of Resolution...

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Comments

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Commenter: Rodrigo Stockebrand

2007, September 18

Great Article! It's interesting to see the cannibalization effect that running both natural and paid search can produce. It's also fascinating to learn that the relationship between both of these results are becoming more transparent and quantifiable. A few questions on the test: Were the tests narrowed to only Tier 1 engines? Was rank a factor in the test? Were both the organic and paid ads landing on the same URL? Thanks for posting!

Commenter: Taylor Harris

2007, September 10

These are some great insights/findings. We came across this debate with one of our existing clients. A lot of the arguments here are points that we mentioned to keep the brand terms a part of our SEM campaign. However, it is nice to have some research to back us up. :) Thanks! Taylor