Over the last two weeks, I've had the opportunity to participate as speaker on a marketer teleconference called the "Paying for Performance Teleconference" and at Affiliate Summit. In both venues, debate centered on the issue of whether affiliates should be allowed to bid on keywords with direct links -- particularly brand keywords -- or whether this activity should be tightly regulated or prohibited. Surprisingly, the debate didn't revolve as much around a firm "yes" or "no," but examined ways marketers should take advantage of the PPC (define) portions of screen real estate to maximize overall profit.
In this column, I'll provide my take on the matter from the perspective of "affiliates" (as defined by common usage as performance-based media buying relationships), and from the standpoint of the broader ecosystem encompassing publishers, channel-partners, distributors, or retailers.
Marketers prefer easy answers. Whether to allow affiliates, channel partners, distributors, publishers, or retailers to bid on your brands and trademarks is a tough dilemma. Unfortunately, there's no one single solution. Legal issues aside, I'm only going to cover issues involving profit maximization. Clearly there's an additional layer of complexity when legal issues are included.
Regarding the profit outlook for PPC search brand bidding, in every case we've tested, there's been at least one scenario where having incremental screen real estate has resulted in greater overall profit to the marketer.
Before addressing the affiliate issue, there are some questions one should ask. I'll cover these questions and why they make a difference:
After digesting these and other questions stimulated by this kind of discussion, you'll likely come to the conclusion that additional screen real estate will be of value. Nearly every merchant or marketer does. However, I disagreed with some panelists in my two discussions on the subject of transparency.
If a third-party partner is able to assist in harvesting demand on your behalf, then you, the marketer, should know that partner's profit level or rate of return. Having this partner on a unified transparent technology platform can help address this issue while simultaneously addressing bid escalation issues.
Policing Your Affiliate Policy
Any time you have affiliates there will be an incentive for them to cheat, regardless of your terms. The search engines are in the best position to police any trademark or brand bidding. The engines know every instance of your trademark being used in a campaign and they can also set up broad matching to exclude those that include your trademark from showing. However, search engine enforcement is often lax and affiliates engaging in PPC SEM have a strong financial incentive to cheat. While a partner network can be effective in ratting out those who are making their PPC bidding more challenging, the numbers of ways that affiliates cheat is quite large and changes regularly. Policing affiliate bad behavior is a cost of having an affiliate program and there are plenty of other areas where affiliates walk the line, with e-mail and forced clicks for example.
When evaluating your brand bidding guidelines, one size doesn't fit all. Your needs may change over time. Continue to test and refine your policy.
Kevin Lee, Didit cofounder and executive chairman, has been an acknowledged search engine marketing expert since 1995. His years of SEM expertise provide the foundation for Didit's proprietary Maestro search campaign technology. The company's unparalleled results, custom strategies, and client growth have earned it recognition not only among marketers but also as part of the 2007 Inc 500 (No. 137) as well as three-time Deloitte's Fast 500 placement. Kevin's latest book, "Search Engine Advertising" has been widely praised.
Industry leadership includes being a founding board member of SEMPO and its first elected chairman. "The Wall St. Journal," "BusinessWeek," "The New York Times," Bloomberg, CNET, "USA Today," "San Jose Mercury News," and other press quote Kevin regularly. Kevin lectures at leading industry conferences, plus New York, Columbia, Fordham, and Pace universities. Kevin earned his MBA from the Yale School of Management in 1992 and lives in Manhattan with his wife, a New York psychologist and children.
June 5, 2013
1:00pm ET / 10:00am PT
June 20, 2013
1:00pm ET / 10:00am PT