Watching Your Customers Slip Away
Last week, I wanted to buy a new watch. Like most people, I went to Amazon and searched for popular watch brands. At some point in the search, I type “Fossil Watch” into the search bar. What I saw surprised me.
Was the first watch on the Search Engine Results Page (SERP) a Fossil Watch?
The first product I saw was the Suunto GPS watch.
Why did I see a Suunto product on top of a page for Fossil watches? Because Suunto is bidding on the keyword “Fossil” and poaching Fossil’s potential customers.
In this post, we’re going to dive into branded keywords. In particular, we will take a data-driven look at whether or not you should be bidding on your own brand as well as a competitor’s brand.
Intro to Branded Keywords
Branded keywords are search words or phrases that include a brand name or a variation of a brand name.
When discussing branded keywords, we often hear the same questions, balks, and objections.
The arguments for NOT bidding on your own are usually:
- “The searcher will eventually make their way to us”
- “It’s a waste of money.”
You might also be thinking this, but let me assure you, neither of these statements are the case. Closing off the possibility of bidding on branded keywords will hurt your brand and bottom line in the long run.
Low ACOS and High Conversion Rates
When bidding on your branded keywords, CPCs (Costs Per Click) will be low because your Ad Quality score is so high (since, after all, it is your brand). Your ACOS (Advertising Cost of Sales) will be around 5% or less.
Inside Ad Badger’s bid optimizer, you can see the performance of a branded manual campaign
You’re letting your Ad Quality carry you to the top, ahead of competitors. In terms of economics it’s extremely rare for bidding on branded keywords to be unprofitable.
Conversion Rates will also be high because customers are looking for you. The concept of brand loyalty also applies on Amazon. If a customer searches for you, they most likely value your brand. And a search result page with only your products doesn’t even give competitors a chance.
Think of Branded Keywords Like Retargeting
No one questions the value of retargeting for Facebook Ads. No one says, “Those customers would have converted anyway.”
The same thing ought to be said for bidding on your branded keywords. It’s not guaranteed that a customer will click on your product after using a branded search-term. That’s why you want to bid on your branded keywords and give yourself another horse in the race.
You Don’t Have 100% CTR On Your Own Brand
There’s a big misconception that bidding on your own brand will decrease clicks on organic listings. This isn’t true.
Your paid listing doesn’t take away from your organic listings, it defends them. People do a lot of things after they search for a certain brand on Amazon, and they don’t always click on the brand they were looking for. Sometimes a competing product or brand catches their eye and they navigate to that listing to compare.
Bidding on your branded keywords gives you another opportunity to catch the customer’s eye. And it pushes your competitor further down the SERP.
There’s also some data from Google Ads that backs-up this point. When someone conducts a Google search and both a paid and organic listing comes up on the SERP, the CTR (click-through rate for Amazon PPC) is much higher than having just one listing on the page (paid or organic).
Play Solid Defense: Keeping Your Potential Customers
We work with some brands that spend quite a bit of dough on Amazon PPC. When these clients look at their ad spend on branded keywords they are sometimes surprised at how much they spend on their own brand.
But, just think, would you want some of the revenue coming from those listings going to your competitors?
Your competitors are most likely bidding on your brand, or (due to articles like this one) they soon will be. Don’t get left behind and wake up one morning to find that the first three products on a SERP for your branded keyword are a competitor’s products.
Users click on what they see. They typically think that what Amazon is serving in the first few spots are the best products. This is why 70% of people always click on the first page, and why 40% of people always click on the first few listings.
The Combo: Making Life Tough For Your Competition
Let’s take a look at how bidding on your branded keywords affects your competitors.
In Amazon Ads, The seller with the highest bid mixed with a high quality ad usually wins the search term.
If you start bidding on your own branded keywords, it will be very hard for a competitor to beat your ad quality and ad relevance. This means that if they want to beat your ad, it will be an expensive endeavor and likely skyrocket their ACOS.
Bidding on your branded keywords, even for 5% ACOS, will put a hypothetical moat around the castle that is your brand.
It also protects the top of the SERP. We mentioned earlier that customers like to purchase products above the fold of the SERP. And if you secure your spot at the top, all they see (and purchase) is your products.
Being on the first page, above the fold, and in the first three listings is invaluable on Amazon.
Should You Bid on Your Competitor’s Brand?
One of the reasons to bid on your own brand is to knock down a competitor who’s bidding on your branded keywords. So, should you be one of those pesky brands that poach a competitor’s potential customers?
First and foremost, there are some Amazon guidelines that you should be aware of when targeting a competitor’s keywords.
If you’re going to promote a product on a competitor’s branded keyword, you can’t explicitly have “better than brand X” in your listing.
When bidding on a competitor’s branded keyword, you should ask yourself: “What am I willing to pay to steal a customer away from them and have them buy my product?”
Amazon sellers typically bid on these keywords to steal market share. Either you’re an up and coming brand like Suunto Watches (mentioned above) or you are simply trying to make your piece of the pie a little bigger.
Paid listings on a competitor’s brand are going to be the exact opposite of paid listings for your own brand. These listings have higher ACOS, higher CPCs, and lower CTR. However, it can still be profitable in the right situation.
To get the most out of this and bolster your CTR and conversion rates, consider targeting other listings that don’t have as strong of an offer as you do.
You should go after listings that have:
- Worse reviews than your product
- Are more expensive than your product
- Low-quality images and a listing that is visually less appealing than your product
Keep in mind the lifetime value of this “poached” customer, and compare this to the cost of acquisition. If you come out profitable, then you should definitely be bidding on your competitor’s brand.
Not utilizing branded keywords is like surrendering your home turf. You should be bidding on your own keywords and also bidding on your competition’s keywords.
Staying up-to-date about keywords that are directly linked to your brand and your competitor’s brands, and bidding on them, can provide a quick and easy boost to your account.
About the Author
Michael Erickson Facchin is the host of the world’s first Amazon Advertising Podcast: The AMZ PPC Den. Every week, Michael & Team Badger publish all the strategies and news you need to help push your advertising on Amazon to bigger revenues and better ACOS. Learn more at AdBadger.com