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:
- Who else is bidding on your trademark or brand now? If you have already clamped down on trademark bidding, you may be the only paid listing, but see the fourth question.
- Who else currently has the right to bid on your trademark including publishers, retailers, channel partners, and distributors? Many companies have other business units to consider that may be bidding on brand names, products, or the parent company name.
- Do you have a good organic position for the brand, product, or trademark term?
- What does the organic portion of the SERP (define) look like? Are those with high positions surrounding your listing (assuming you have good position) valued partners that provide a strong user experience associated with the purchase of your brand or the potential to positively influence the visitor towards eventual purchase? Look, in particular, above the fold and the upper left corner. Consider universal search results as well.
- If there are links to affiliates and/or partners on your terms in either the paid or organic listings, is your competition merchandised on the landing page as an alternate choice?
- If you have a good organic position, what’s the title, description, and landing page for each listing? If your listing isn’t enticing and gets a low CTR (define), then chances are searchers are clicking elsewhere.
- What’s the click-back percentage (or page/site abandonment percentage) for visitors to the landing page that garners the brand searchers to your site? If you’re losing your searchers back to the SERP, a second, third, or fourth bite at that apple might make sense.
- In the organic results, are there some affiliate or business partner organizations that might already be bidding on PPC?
- If you were to allow a partner to do trademark bidding (assuming it’s currently not allowed) and if this partner is primarily helping you harvest existing demand, what else can you ask for from the partner or what other value are they currently providing?
- What does your online and offline product/services distribution ecosystem look like now and how would you like to change it if you could?
- Do you have several types of customers who respond to different kinds of messages and prefer different types of user experiences?
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.
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