Three reasons why brand bidding on third-party brands is not worthwhile

Brand bidding means that (for example in AdWords) keywords are booked on brand terms. Of course, this makes sense for one's own brand, but sometimes the brands of competitors are also booked in order to profit from the searches for these themselves. In addition to the legal aspects, marketing expert Britta Kristin Böhle clarifies the question of whether brand bidding on third-party brands actually makes sense.

The basis of Google AdWords is the booking of keywords for which you want to appear with corresponding ads. Individual ads can be designed for each keyword set so that the most suitable ad is shown for the respective query.

1. problem: dissatisfied visitors

It can become poblematic if visitors are to be generated from search queries for a popular brand, which the online store, however, does not have or does not have completely in its assortment. This can disappoint and frustrate users who come to the store through the ad click.

Example: A store sells sports shoes, but mainly those of the still unknown brand X. There are also a few sports shoes of the well-known and popular brand Y. Since there are significantly more search queries for "y sports shoes" than for "x sports shoes", the retailer chooses the strategy of including "y sports shoes" as a keyword.

2nd problem: Poor quality signals & increased CPC

Due to the disappointed visitors, the second problem follows: Google AdWords recognizes that the visitors do not linger in the store and return to the search results page. This lowers the quality factor for the keyword.

Since the actual click price is composed of bid and quality factor, among other things, the click price becomes higher if the quality decreases (all other things being equal). Whether the third-party brand is in the ad or not also has a direct impact on the quality factor. If it is in the ad, the link between the keyword and the ad is greater - but then the store operator runs a legal risk. If the brand is missing in the ad, the quality is also worse due to the missing link. In general, AdWords checks whether the keyword, ad and landing page fit together thematically.

3. problem: competition

Another example: An online retailer books the store name of his competitor as a keyword, which creates another problem. The competitor, who is normally the only bidder for his own brand, gets competition in the auction. With multiple bidders, the price for a click increases.

This means that unnecessary money is spent first, as the merchant will usually never get as good a quality factor as the actual brand owner. The latter usually has a much stronger link from keyword to ad to landing page. On the other hand, the competitor might start bidding on the merchant's brand as well, increasing the click price for the ads. If the brand even appears in the ad itself, there are also legal consequences.

Conclusion

In the long run, brand bidding makes sense in very few cases. You can try to get attention through popular brands or to annoy your competitors. But as a rule, you won't gain really satisfied visitors with high conversion rates.

Britta Kristin Böhle is a marketing expert at Trusted Shops. Trusted Shops certifies online stores according to carefully selected quality criteria before awarding the European seal of approval. With the combination of money-back guarantee and customer rating system from Trusted Shops, consumers shop safely on the Internet.

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