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From our Depsters July 30, 2019

Should or shouldn't you pay for clicks on your brand name?

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One of the most frequently asked questions within search advertising is ‘do I really need to pay for people to find my brand? If they search for my brand name, don’t consumers usually click on the organic link if no ad is present?’ Technically yes, the majority of users will indeed click on organic results. However, research shows that you will lose a significant share of your branded search traffic if you are not advertising.

To find out if this also applies to your situation you should test it. For instance, whether you need to advertise on your own brand name depends on multiple variables such as your organic rank (which is probably position one for your brand name) and if there are any competitors bidding on your brand name.

The same research shows that you lose traffic without advertising. At Dept, we wanted to test this to see if it was worth the spend or if it is better to not advertise and simply let organic search results be the source for most of one’s traffic. That’s why a small team of Depsters set up an experiment and tested the search visibility of four of Dept’s biggest search accounts. Our test “samples” included one e-commerce brand and three B2B brands. All four of these companies ranked first organically when we searched for their brand names. Only one of the brands experienced paid competition on their brand name.

The PPC experiment

We decided to run an experiment where we switched off paid advertisement every other day. We did this to minimize seasonal and day-of-the-week influences. We ran this experiment for approximately thirty days, making it dependent on the volume of data we could collect. The research was based on users searching for the brand name and no other keywords (exact match). For example, when someone searched for [clientname] without any other keywords, the data was collected for our analysis. When someone searched for [clientname + any-other-keyword], we did not collect this data and thus didn’t include it in our experiment.

We combined data from Google Ads (paid clicks) and Google Search Console (organic clicks). We proceeded to calculate the total Click-Through-Rate (CTR) on the client’s name with and without advertising. For this calculation, we used the total amount of impressions via organic (seen as 100% of the search volume) and the total number of clicks from both platforms (paid + organic).

Paid search vs organic search

In short, we saw the same result for all four of our clients: a decrease in CTR without paid advertisement.

On average, on the days when we did showcase paid advertisement, 41% of users clicked either on the paid advertisement or the organic link. But on the days where we didn’t showcase paid advertising, the CTR rate dropped to 33%, which means that 8% of users didn’t click on the specific brand name organically.

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Fun fact: we do not see any significant differences between clients with or without paid competition, or between clients who are active in different industries.

So, we now know that companies will lose traffic without paid advertisement. However, keep in mind that paid ads for your brand name only generates 8% extra traffic. The other 92% comes from your organic search result (if you keep all other metrics the same). This means your Cost-per-Acquisition (CPA) is actually 12.5 times higher than you are probably reporting right now. Based on these numbers, your (paid) branded results don’t seem so good anymore, right?

The next step for your brand

After running this experiment, we advised our clients to continue running paid ads for people searching for their brand name. This investment is worth the extra 8% of traffic. For the e-commerce brand we had tested, the results showed their ROAS on branded keywords was much lower than reported. However, to decide if you want to keep your paid ads activated or not, you should consider the following advantages of advertising as well.

Besides a boost in traffic, paid ads have a couple of other advantages:
1) Ads can send users to another landing page than the one from your organic listing.
2) They allow you to change your ad copy whenever needed (e.g. sale/promotion/news).
3) Use ad extensions to show extra information such as announcements and promotions.

The question to ask yourself is: is 100% of your spend on branded search worth the small amount of extra traffic and results? Only you know the answer.

Questions? We are here to help!

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