Should We Bid on Our Own Brand & Product Names in Amazon Advertising? (5 Reasons Why Brand-Bidding is a Best Practice)
5 Reasons Brand-Bidding is a Best Practice
If your company is considering scaling up its investments in PPC (pay-per-click) advertising within Amazon, Google, or any other ad channel that offers search-based targeting, someone on your team has probably already raised this question.
“Should we invest in bids for our own company name, brand names, or product names? Isn’t that just paying for clicks we would’ve received from our normal [often called “organic”] search results?”
This rhetorical question often comes from the CFO or CEO, but many of your company’s decision-makers are probably thinking it too, so it would be wise to explore a variety of perspectives before conceding to the argument that brand-bidding is a waste of company resources.
By the way, here are a few terms that are used interchangeably to refer to the same thing:
Brand-bidding
PPC brand-bidding
Branded search advertising
Branded term targeting
Regardless of what people call it, the question at hand is whether it is a waste of money to pay for an ad to appear when people are searching for your brand names or product names, especially when your organic search result already shows up at or near the top.
Our Brand-Bidding Background
Years ago, we asked the same question ourselves when we increased our PPC advertising budgets for a large corporation in which we were employed. After significant research into the matter, we concluded that it was a best practice.
Then, when I started Amplify Marketing Services, I had to ask the question again, but this time, it was personal. Now it is my company’s revenue on the line!
Over the last couple of years, this question has been raised by most of our clients, and we’ve had to present a thorough case for why brand-bidding is a best practice in most search-based ad channels like Amazon, Google, Microsoft, and app stores.
We wrote this article because we wanted a place to point people so they can explore the matter from a variety of perspectives before we have a conversation about it. We hope it also benefits you and your team as you work through these decisions yourself.
Before getting to the list of 5 reasons why brand-bidding is a best practice, let me clarify that this article is specifically dedicated to branded search advertising within Amazon Advertising.
Although all 5 points apply to Google and other search-based ad channels, if we were to lay out a case for brand-bidding within Google Search in particular, we would include a few additional points that aren’t relevant for Amazon.
3 Key Clarifications to Consider
Before we dive into each of these 5 reasons for using a brand-bidding strategy, we need to establish 3 key clarifications.
1) Percentage of Ad Spend
Although we recommend incorporating a brand-bidding strategy, we do not advocate for letting it swallow up your advertising budget. It should be part of a balanced mix of targeting strategies that make sense for your organization and its unique market and product mix.
What percentage of your ad spend should go to brand-bidding? Our answer to that question varies according to the nuances of your market, the nature of the competition, and the amount of time that your ads have been running.
But, here’s a ballpark to consider. In the first 90 days of a new campaign, the percentage of spend that goes to brand-bidding could be as high as 35-40%, and then after the ads have built authority with Amazon (more about authority later), the percentage could go down to 10-25%.
2) Dive deeper into the data
One obstacle we regularly face is when someone jumps to the conclusion that the majority of the search advertising budget is going to branded searches.
This is understandable because whenever you pull a search terms report, you see that branded terms are at the top of the list - they have the highest volume of clicks and sales and it looks like that’s all that the ad budget is going toward!
But what isn’t as easy to decipher at first glance is that hundreds of other keywords, when combined, collectively bring in more clicks and revenue than those branded searches. But, they rarely, if ever, show up in the top 10 because none of them individually have as many clicks or sales as the branded terms.
Data nerds like me know that it is always best to spend some time looking at the data from multiple vantage points before jumping to a conclusion that could lead to a pivot away from something that is actually very effective.
3) The Importance of Being #1 (or #2 or #3)
Jungle Scout’s survey revealed that 73% of Amazon shoppers click on the top listing in search results, 14% on the second, and 5% on the third. That means that 92% of clicks happen with the top 3 products listed.
A CNBC article states that about half of the Amazon customers surveyed (by Goat Consulting) claimed that they couldn’t tell the difference between an organic search result and a paid one.
The takeaway here is that if you’re not showing up in the top 3 spots, or what some call “above the fold,” the product in your company’s listing has about the same chance of being discovered as one of your items that is on the bottom shelf in the last aisle of a darkened corner of a small store in the middle of nowhere.
This point is crucial as we consider our case today.
Reason #1: Brand-Bidding Protects Your Brand from the Competition
If one or more of your competitors decide to bid on your company name, brand names, and/or product names, their ad(s) will push your organic listing further down the page (or “below the fold”), bumping you from the top 3 spots which we’ve already established get up to 92% of the clicks.
A balanced PPC ad strategy needs to include two things - promoting and protecting your products because it is vital to be above the fold for all relevant searches.
Perhaps you’re the underdog who has the advantage of flying under the radar. Does this mean there’s no need to bid on your brand names in Amazon?
That would be an easy assumption to make, but many savvy Amazon advertisers use Category-based targeting strategies (available within manual Sponsored Product and Sponsored Display campaign types) which place their product ads alongside any ASIN that is part of an entire category of products.
This means competitors are targeting your products even when they aren’t aware of them by name and their ads can and will push your organic placement further down the fold, out of sight with little opportunity to be discovered.
Reason #2: Brand-Bidding is Efficient
One of my favorite parts of PPC advertising is that the ad platforms want to deliver relevant ads to people who are most likely to convert.
Rewarded for Relevance
An important lesson learned from renowned marketing expert, Andy Crestodina, is that relevance and authority are key factors in content marketing (we highly recommend subscribing to his blog - but, no, they’re not a sponsor).
The same is true with PPC advertising. Amazon rewards advertisers whose products align closely with search terms (“relevance”) and if those ads convert often enough, Amazon trusts it more (“authority”) and serves the ad more often at a lower cost per click (more about “authority” in a minute).
Brand-bidding is efficient - it will likely have the lowest cost per conversion of all your targeting strategies, and it can protect your brands and products from the competition with as little as 10-25% of your budget being allocated to it.
Even right out of the gate, when you start a new branded search campaign, the relevance of having your name within in the actual customer search term means that Amazon will reward you for relevance and you can win the bid for half or even a tenth of what the competition has to pay to appear in the same search result for your brand.
Think of it this way - if you only had to pay $0.10 to keep a competitor from spending $1 and pushing you down the fold, why wouldn’t you invest at least some of your ad budget to protecting your brands?
Reason #3: Brand-Bidding Establishes Authority
Advantages of Authority
But that’s only half the story. Where does “authority” come into play? Your branded ads get more exposure at a lower cost because they are relevant to the search terms, and when it results in sales at a high conversion rate, Amazon then assigns more “authority” (think “trust”) to your ads.
When you have proven to Amazon that your ad is relevant and can convert, they will serve those ads more often (more impressions) and they will give you clicks at a lower cost than the competition.
You won’t likely find many articles about this online, but we’ve tested this extensively and after confirming our conclusions with other world-class Amazon Advertisers, we can say that the benefits of authority are not limited to just the branded keywords you’re bidding on - the other keywords, ad groups, campaigns, and even your entire ad account can get a lift in trust with Amazon which is rewarded with more impressions at lower costs than the competition.
If you’re not investing an appropriate amount of your PPC budget on branded terms, you’re likely paying more for the rest of your ads than you could be!
Before we move on to Reason #4, let’s take a moment to consider the impact that Reason #1 has on Reason #3.
It is possible for competitors to obsess over finding ways to convert sales using ads that target your brand names. And with enough effort, time, and ad cost, they can convert from your brand searches often enough for Amazon to assign more relevance and authority to their ads than yours!
How do I know this is possible? We’ve done it. Our partners have been able to get their products to show up before the bestselling products of competitors. Other ad agencies have documented similar results. Don’t let this happen to you!
At first glance, brand-bidding may appear wasteful, but it is actually a best practice and, remember, when managed properly, only 10-25% of your ad dollars will need to be invested here.
Reason #4: Brand-Bidding Reduces Distractions
If your organic product listing appears in the top 3 results, brand-bidding lets you lock in another one of those 3 valuable top spots with a paid ad. Now, two-thirds of the most important real estate is yours!
This reduces distractions and increases the odds that one of those 2 will get a click.
We want to remove any and all distractions that can take a customer down a rabbit trail controlled by a competitor. There are three ways competitors can distract your customers.
1) Sponsored Brand Ads Leading to a Store
If your customer clicks a competitor’s Sponsored Brand ad at the top of the search results page, they might be taken into that company’s Amazon Store page where they see videos about the competitor’s product quality and are introduced to all of the related products they offer.
2) Product Page A+ Modules
Or they could click a Sponsored Product ad that appears above your organic search result. When taken to the competitor’s product page, they might scroll down to the A+ module section where they learn more about the brand and are able to click hyperlinked images to their other related products.
3) Organic Placement of Relevant Products
It may not even be an ad that distracts a shopper. Remember, Amazon wants to put the most relevant products in front of a customer. Sometimes, this results in a competitor’s product showing up alongside (or even above) yours.
For example, if you’re selling a book, Amazon might show other books by the same author which were published by a competitor.
Or if you’re advertising a bell made for bicycles, Amazon might serve up “Bell’s bike helmets” above or below your product. Bell is a brand name with substantial authority in Amazon, so this is a real-life example.
Amazon’s interest in serving up relevant products often creates distractions that take your customer down another path. And many times, the customer doesn’t click the back button to revisit what they were originally searching for.
Taking Brand-Bidding to Another Level
There’s a specific type of branded bidding strategy that takes it to another level. You might want to consider paying to have your other products show up whenever any one of them is searched for, and in doing so, you buy up the entire above-the-fold real estate in search results pages.
All the customer sees are products from your company. There’s nothing else to click on but your items! It’s like they walked into your showroom where you control their entire experience.
Will this result in cannibalization of your own sales as customers buy a different product than the one they were searching for?
That’s an easy assumption to make, but our experience has proven that people usually buy what they were looking for, and then they purchase another product or two along with it.
An investment in this type of branded-bidding strategy will increase your average order value as customers purchase multiple products - products they may not have been aware of when they were looking for just that one item.
Reason #5: Brand-Bidding Brings Incremental Growth
The last reason for considering a brand-bidding strategy is that it brings incremental growth. Although your CFO might wish you had led with this argument, we put it last among the 5 points because it makes more sense when you understand the rationale of the first four arguments.
Even if no one is bidding on your company’s name, brands, or products, an effective brand-bidding strategy will increase your sales!
It will prove worthwhile to invest of a portion of your ad budget because…
The rest of your ads will be served more often and at a lower cost per click because Amazon trusts you more
There are fewer distractions pulling people down a different path
Customers have the option of buying multiple products
It’s usually a combination of the factors listed above, but we always, without exception, see a substantial lift in sales from branded-bidding strategies, even with bestselling products that have little competition and already show up first in search results.
We’ve seen over a 100% lift in sales from branded ads for bestselling products that companies assumed had saturated the market.
Other marketers have experienced similar results. One of my favorite examples is from a case study that Stephanie White shares in the PPC Hero blog. Both of the posts linked to below are based on brand-bidding strategies in Google and Microsoft/Bing, but the results are fascinating and are very similar to our experience within Amazon.
The most compelling data from the case study in the second article above is that, when one of their clients asked them to stop their branded search campaigns, spend only decreased by 9% but revenue dropped 54%!
Conclusion
Branded-bidding strategies work! At first glance, it doesn’t seem logical, but they bring in more revenue even for bestselling brands with little-to-no competition who already show up first in search results.
We believe in this strategy and consider it a best practice to implement brand-bidding as part of your targeting methods for every robust Amazon Advertising initiative.
If you’d like to read other articles related to this topic, here are a few that have been helpful to us:
Brand Bidding & PPC Optimization: The Value of Brand Keywords
Brand Bidding in Amazon PPC: Why You Should Bid For Your Own Brand
We also have some other articles of our own about Amazon Advertising. Here are a few examples worth considering:
We hope this article helped you consider the branded-bidding strategy from multiple angles. Feel free to forward it to anyone in your organization who is asking the same questions.
If you’re interested in a possible Amazon Ad management partnership, we’d be honored to explore that with you. Click here for more information about Amplify’s Amazon Ad management services.
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