PPC Advertising & Branded Terms: To Bid or Not To Bid?

That is the question. While many search engine marketers would agree that bidding on most of your company’s branded terms are a necessity, there are still many people who do not like this idea. The reasons for not participating in this practice seem logical and obvious, but considering other factors beyond the surface support the idea that bidding on branded terms is a good (and necessary) practice. We will go over the reasoning of both sides (objectively, of course), and by the end of this article, we hope you have a clear understanding of why SEM specialists advise businesses to bid on their own name.

bidding on brand terms for hotel ppc

Why Businesses Do Not Want To Bid On Branded Terms

“I’m Already Listed #1 Organically. I Don’t Want To Pay For Those Clicks/Conversions!”

This argument is the most common reason why many businesses (not just hotels) do not want to bid on their own brand name. Most companies will rank #1 or at least be on the 1st page of search results, so placing an ad above the top ranked search result seems unnecessary and costly. Why pay for something when it’s already ‘free’?

Pros: If branded terms are not being poached (bids made by competitors on other business names) and the site ranks on the 1st page of the search results page, then not having ads for branded terms is a good call. The majority of searchers will see the organic ranking at the top and click on it. All other results are probably associated with the business itself (company social accounts such as Facebook and YouTube, coupon sites such as RetailMeNot.com featuring public deals).

Cons: If your branded terms are being poached, then not having ads for those terms means you are constantly losing potential customers per impression. Even if your site is ranking #1 organically, it will still be placed under a competitor’s ad (up to three). Other ads will appear on the right hand side of the search results page, making your site less probable to be clicked on as well. Not having a paid ad to go along with your organic listing will decrease the number of traffic you get for your own branded searches in this scenario.

“I’m happy with how my organic and paid ads are currently performing, so I’d rather not affect them by adding and bidding on branded terms.”

ppc strategy bid on brand termsThis argument is a safe play and may work in a non-competitive location in the short run. Don’t fix it if it’s not broken. Many properties with limited budgets do not have any desire to adjust spending that would not see an immediate return. While this plan is a safe play, you leave yourself open to preventable nuances.

Pros: Current budget will not be spent on the unknown, and if business goes as usual, then performance on organic and paid ads will continue to see the same results.

Cons: Just because the weather today is fair does not mean the weather tomorrow will be the same or better. As with any profitable vertical/location, competitors will always try to penetrate the market and will claw their way to the top, especially with paid search. The best way to prevent a competitor (new or old) from stealing your pie is to make sure your branded searches are showing up in the paid search sections. If no one is bidding on your keywords, then your cost will be extremely low due to zero competition. Coupon sites are notorious for bidding on brand names, and they do so because it’s the easiest way to bring in qualified traffic to their own site. Direct competitors will also do the same, and if your account is not setup with branded terms, you could get blindsided and lose a large percentage of qualified traffic.

Reasons Why Businesses Should Bid On Branded Terms

“You will learn more about your site’s performance from search engine visitors.”

Pros: With organic keyword data becoming less transparent, the best way to learn which keywords perform the best will always be through paid search. Branded terms will typically have high CTR and high conversion rates. Low conversion rates from branded search terms through paid search is a red flag, so examining both the Adwords account and the landing pages the ads point to would be a good place to start. If conversion rates are normal or higher than organic or direct traffic, then you’ve found an effective channel. Either way, you learn more about your site because your keyword data is visible, thus creating more opportunities to optimize.

Cons: The added costs of brand term visitors may not be ideal for small businesses that simply do not have the luxury of spending money to learn more about their customers.

“You will take back potential customers from OTAs and competitors who are bidding on your name.”

bidding on brand terms for hotel ppcPros: When OTAs and competitors poach your brand name, you are losing potential customers who are most likely to convert. Meet them where they stand and get your most relevant traffic more frequently! Stop worrying about paying ten cents per click while your competitors are getting high returns off of your name. Branded terms always cost significantly less for brand owners, and the amount of revenue you are losing is most likely significant (especially if your competitors have been poaching you for a very long period of time).

Cons: If no ads appear for your branded terms, then it is safe to not bid on your name.

Overall, if other business ads are showing up on the search results pages for your brand terms, then it is highly recommended that you bid on your own name as well. OTAs will run ads for your hotel for anything and everything that is applicable to your hotel, and nothing is more relevant than your own name. Diversify your Adwords portfolio and force OTAs and competitors to think twice about running PPC ads so aggressively with your own brand name. It’s not an ideal situation to be in, but not bidding on your branded terms means you could be missing low hanging fruit, both in learning and in revenue. Don’t let the awful idea of paying for traffic that would have been free organically, but rather focus on the idea that you’ll be taking revenue away from your competitors.

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David Yi

David Yi is a Google Adwords certified paid marketing specialist at Valet Interactive with over 5 years of experience in internet marketing. He enjoys teaching business owners about internet marketing and how it can positively affect their business.