Most retailers don’t manage their brand-related (i.e., trademarked) keywords and non-brand (product-specific) keywords independently. This is a mistake, and a missed opportunity.
Goals for Brand and Non-Brand Terms
Non-brand terms are best for new customer acquisition, while brand terms assist in closing a sale but typically only by a customer who is already acquainted with you. They’re both important, but they need to be managed separately.
Brand campaigns typically have impressive performance stats: high click-through rates, high quality scores, high conversion rates, low CPCs, and high ROAS. These campaigns perform well because the customers clicking on these ads already know you—from a prior purchase, previously-seen ad, search result, or your general reputation. The success of brand terms is indicative of the overall success of your brand marketing initiatives. Advertising your brand on search engines closes the loop on other marketing initiatives, but does little to acquire new customers—which is the real value of search engine marketing.
According to a study by The E-Tailing Group, 57 percent of online shoppers begin their shopping process from a search engine, not by going directly to retailers’ websites. So, even if customers already have an affinity to buy from you, they’re likely to still use a search engine and click on your branded ad to come to your website. This means that with brand terms, you are often paying for a click that was used as a navigation shortcut. If it still results in a sale, that’s not necessarily a bad thing. However, you should pay less for that click than for a click from a new customer. The key is to manage brand terms separately from non-brand terms, with different cost of sales (COS, or A/S) goals. Your expectations for CVR and ROAS should be different, as well—they’ll be lower for new customers, but it’s usually worth it in the long-run.
The Pitfall of Blended Goals
Some retailers blend their goals for brand and non-brand terms. For instance, if their COS for brand terms is 10 cents and their COS for non-brand terms is 40 cents, they settle on an averaged A/S target of 25 cents. This won’t meet their ultimate goals.
The goal with paid search is to increase your reach and acquire new customers. By aiming for a blended COS, you are disincented to grow non-brand traffic. In fact, you cannot increase non-brand traffic without simultaneously increasing brand searches or you will disrupt the blended average. Since brand searches are influenced by awareness generated through a multitude of marketing channels, it doesn’t make sense to force a blended average. The result of blended brand and non-brand targets is an overemphasis on navigational brand traffic and a de-emphasis of building long-term growth through non-brand terms.
Summarizing My Advice
- Manage brand terms separately from non-brand terms. Understand that non-brand terms are the real drivers of new customer acquisition.
- Set different cost of sales (COS, or A/S) goals for each of these terms and do not optimize to a blended average.
- Expect lower CVR and ROAS performance from non-brand terms.
If you follow this advice, you should experience results that meet more of your marketing goals.
Photo courtesy of Mashable.