How We Reacted When Competitors Targeted Our Branded Keywords

A Data-Driven Perspective on Brand Bidding‍

Picture the scenario: you've built a strong brand presence, your organic search traffic is healthy, and then suddenly, your competitors start bidding on your branded keywords. Your first instinct might be to jump into defence mode, but is that really the best strategy?

Recently, we started working with a successful UAE retail client who had built a strong reputation in their market. They were doing everything right: strong customer service, excellent product quality, and competitive pricing. Then they noticed something concerning. Their website traffic and sales were declining, despite their excellent customer reviews.

After diving into their analytics, we uncovered a startling statistic: a 48% reduction in traffic from branded terms. The cause? Competitors had begun aggressively bidding on our client's branded keywords. 

The Conventional Wisdom: A One Size Fits All Approach?‍

Brand Bidding is often cited as a classic case of the best defence is a good offence. The standard advice is usually to bid on your own branded terms to defend your territory. The reasoning typically goes something like this:

• You'll get lower Cost Per Click (CPC) and see higher Click-Through Rates (CTR) compared to non-branded keywords
• You'll maintain control over your brand presence in search results
• Prevent competitors from capitalising on your brand

Sounds logical, right? But here's where it gets interesting – and why you might want to think twice before following this common advice.

In a previous project, we had the unique opportunity to conduct a comprehensive analysis of the impact of defending our own brand term. What we found was eye-opening:

80-90% of the traffic that came through brand bidding would have reached the website anyway through organic search.

Let that sink in for a moment. The campaign looked successful on paper – showing cost-effective acquisitions. But when we dug deeper, we discovered we were primarily paying for traffic that we would have gotten for free.

Conducting an incrementality test can be an important step in assessing the true value of your marketing campaigns, at a quick glance the brand bidding campaign was delivering x installs for y budget, but in reality the impact (incremental lift) of this activity was less than ⅕ of what it was believed to be. 

To conduct this test we compared the behaviour of two groups:

1. A test group that was exposed to the brand bidding campaign 
2. A control group that isn't exposed to it

The analysis was conducted across 7 different Countries, where we ran brand bidding on rotation, 2 weeks on, followed by 2 weeks off, with the impact on organic installs measured in both groups.  

Following completion of this study, we ran a regression analysis used to assess the variance between markets.The difference in the incremental impact of the brand bidding campaign was attributed to the strength of the company's brand, and the relative competition in each market. 

Simply put, brand bidding was less effective in countries where we had stronger brand recognition and weaker competition.  

The Brand Strength Factor‍

Whenever I’ve seen arguments in favour of brand bidding, incrementality is rarely considered. Cases are made with over-simplified KPIs that focus only the positives, cost-effective clicks, without fully assessing the negatives, spending money on traffic that would have arrived at your website or app anyway. 

The effectiveness of a brand bidding strategy can be influenced by several factors, that are often challenging to measure directly, the reason why they’re often overlooked:

• Brand Strength - How is the brand perceived within the market, how strong is the purchase intent? 
• Unique selling proposition - How unique is your product/service? 
• Competition level - How many comparable alternatives are there? 
• Industry characteristics - What does a typical customer purchase journey look like? 

For instance, a company with a strong brand and unique offering (like our case study client) might not need to defend its branded terms as aggressively as the consumers searching for their product have a strong desire to obtain it, and are less likely to be distracted by a competitor trying to muscle in at the last minute.  

A great way to think about this is by considering sports team merchandise. Fans of sports teams are fiercely loyal. When shopping for a new jersey, it’s very unlikely that they would be distracted by a rival team bidding on their team's keywords in an effort to intercept a sale opportunity. 

In contrast, businesses in highly competitive industries with lower differentiation, such as insurance, might see better results from brand bidding, as affinity to a particular brand is much lower, and purchasing decisions are often driven by price and convenience. The consumer mindset is very different when purchasing a necessary service, vs a desirable but non-essential product. 

The Strategic Dilemma: Defence vs. Growth‍

This brings us to a crucial strategic decision that every business needs to make. Engage in a race to the bottom with competitors, and utilise your marketing budget to fight over the customers who were planning to visit your site, or focus on growing your audience, acknowledging that you may lose some of the lower intent traffic to competitors. 

You have two contrasting options:

1. The Defensive Approach:
   • Focus on capturing existing demand
   • Compete directly for branded keyword traffic
   • Protect your territory in search results
2. The Growth Approach:
   • Invest more in demand generation
   • Build stronger brand affinity
   • Increase overall search volume for your brand

Making the Right Choice for Your Business‍

So how do you decide which approach is right for your business? Here's a framework we use at Pieo to help our clients make this decision:

Assess Your Current Position

• How strong is your brand recognition?
• What's your organic search performance?
• How aggressive is your competition?

Evaluate Your Resources

• What's your marketing budget?
• How are your margins on customer acquisition?
• What's your capacity for new customer acquisition?

Consider Your Market

• How commoditized is your product/service?
• What's the typical customer journey in your industry?
• How price-sensitive is your target market?

The Path Forward: A Balanced Approach

Based on our experience with UAE businesses, we've found that the most successful approach often involves a balanced strategy:

1. Monitor Competitor Activity
   • Track who's bidding on your branded terms
   • Analyse their ad copy and offers
   • Measure the impact on your traffic and conversion rate for branded terms
2. Strengthen Your Organic Presence
   • Optimise your website for branded searches
   • Build quality backlinks to your brand pages
   • Maintain strong social proof
3. Selective Brand Bidding
   • Test different bidding strategies
   • Focus on high-intent variations
   • Monitor cannibalisation carefully
4. Distribute funds across marketing at each stage of the acquisition funnel
   • Invest in brand awareness campaigns
   • Focus on customer experience and loyalty
   • Build a distinctive brand voice and position
   • Develop strong relationships with your customer base

Think Beyond the Immediate Battle

While it might be tempting to engage in a bidding war over your branded keywords, this can be an emotional rather than a rational reaction. Before committing a budget to own brand campaigns, take a step back and consider the bigger picture. Instead of just defending your territory, focus on expanding it.

Your competitors can bid on your branded terms, but they can't replicate your customer experience, brand value, or market reputation. These are the areas where lasting competitive advantages are built.

At Pieo, we've seen time and again that businesses who focus on building strong brands rather than just defending their search terms tend to win in the long run. It's not just about protecting your brand name in search results – it's about making your brand so strong that competitor ads become less relevant to your target audience.

Want to learn more about how to protect and grow your brand in the digital space? Contact Pieo's team of revenue acceleration experts for a strategic consultation tailored to your business needs.

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