Brand keyword bidding is big business and it’s becoming bigger. For anyone in the internet marketing industry it’s crucial to watch this trend and esp the decisions Google is making around it.
Within the affiliate industry brand bidding initially was a quick way to make a buck. In 2003-2005 affiliate managers were often slow to realize affiliates were making money for essentially no work. Even now many affiliates use a combination of geo-targeting and day parting to work around affiliate managers and get away with brand bidding.
As that loop hole was closed and brands took their brand name bidding in house worldwide and affiliate networks policed out the majority of the affiliates doing brand bidding Google made two changes which made brand names far less lucrative for them in many countries (esp. the UK). Google stopped allowing multiple ads for one website to appear on the same search result and Google also allowed companies to claim their brand so that no one else could bid on it (in the UK). On April 4th Google changed this second policy and that angered a lot of brand owners in the UK.
Two things make this policy change an excellent way for Google to make money: 1) Branded search made up 76% of searches in the UK in 2007 according to some studies. 2) Having only one person bidding on their own brand can result in their bid being as low as $0.01 – just adding another person into the auction can push that up tremendously giving a huge boost in Google revenue.
I can’t really decide what to think about the way Google is acting here. Would it be fair for companies who sell NorthFace clothing not to be able to bid on the word NorthFace? On the other hand is it fair that Google essentially extorts brands to spend in some cases $100k’s a week to simply ensure that someone who was looking for them comes to their site?
This little post is just a thought starter BUT as an internet marketer it is crucial you have to have a branded search strategy covering both SEO and SEM. Google won’t let you get away without it.