Brand Bidding what’s the deal?
I came across a very interesting article in Revenue (definitely worth the money, even if you are in the UK, Revenue is the only magazine dedicated to affiliate marketing – Subscribe here to Revenue to read the full article drop me an email)I was pleasantly surprised to see a headline “The Search Tug of War” issue May/June 2006 where the issues were clearly defined. The arguments for and against affiliates being allowed to brand bid were well written, clear and persuasive on both sides.
One paragraph leapt out at me and this is the very discussion I am having with one of my clients “Unfortunately, no matter what a merchant does to block its affiliates from buying branded keywords, competitors can’t always be blocked, because the merchant has no control over them”.
Reading in-between the lines, what this article highlighted, for me any way, was that the featured merchants who did not allow affiliate brand bidding, and without exception, clearly understood the mechanics of PPC and had dedicated human resources and budget to be able to run their own in-house campaigns. But I question the cost effectiveness of this approach as you can not prevent any one from bidding on generic terms, here all go head to head and the bid determines where your add will be seen.
How ever, the merchants featured in this article who allowed affiliates to bid on their brand clearly showed that they were working with their affiliates to not only drive sales but affiliates were partnering to help protect them against their competitors. What was evident was the trust they had for their brand bidding affiliates and saw their affiliates as complimentary rather then as a rival. So it’s that simple or is it? I think we ought to dig a little deeper and go under the surface of this escalating debate.Some affiliates in the UK may have seen on the affiliate terms and conditions, “please don’t bid on our name or misspellings or variations” Is this firstly acceptable and secondly is this legal? You may have also seen that some merchants have a closed PPC policy, meaning they are either doing PPC themselves or have opted for a select few ppc affiliates to assist with their campaigns, often this is referred to as a closed group. Paul Wheatley of ShopperUK, One of the most vocal and respected affiliates in the UK argues that in the first instance, that some of the terms and conditions are too ambiguous and vague and in the second instance, if merchants have not registered their variations of misspelled names then perhaps its not a legitimate or fair request to ask affiliates not to bid, in the third instance by merchants having a closed group of affiliates, this can alienate other ppc affiliates. I think Paul’s observations are astute and hones right in to the heart of the matter and he goes as far as to suggests there may even be link between the closure of some affiliate programs and their strict PPC policy. Paul Wheatley states, “Let’s not forget brand named bidding is a low hanging fruit, but it serves as a good litmus test to ascertain if a merchant is worthy of a PPC affiliates marketing skills for attributing generic & product related terms (which are more expensive) via any EPC from bidding on the brand. If a merchant cannot convert on its own brand, it’s highly unlikely it can on generic / product related terms, thus preventing the need for further futile efforts from PPC affiliates.” I believe I touched upon the differences between Brand and Brand some time ago. For a few small/medium companies that have just started out, I cant help smiling when I see that they have launched their affiliate program with PPC brand bidding restrictions already in place. Now it could be argued that they are planning for the future, when they become house hold names like Coke, Pepsi, Disney, FCUK to name but a few. Rule of thumb, if no one is searching for your name, you are not a brand. Building brand awareness is a different animal all together.In a candid statement from Justhom.com, he confesses that whilst he has PPC knowledge he prefers to allow affiliates to control this aspect of his marketing, says Adam Davies, MD of
JustHom.com (prefers to be referred to as ‘pant monkey’) “We leave all our search engine PPC campaigns in the capable hands of our affiliates and are happy for them to bid on our company name (as long as they are promoting us of course)…”PPC brand bidding affiliates vs PPC Agencies
Affiliates take the risk and put their hands into their own pockets.
Agencies take the risk and put their hands into the merchants pocket.
Its in the affiliates interest to work hard for merchants, as they are still paid on a rev share.
Its in the Agencies interest to use up the merchants budget so long as their is an ROI
Affiliates vs in-house
PPCAffiliates manage campaigns effectively and don’t require merchants company time.
In-House requires, human resources which is seldom factored into PPC costs. Its difficult to try and write a balanced article aimed at small to medium sized companies, if you understand how paid search works and you are experts and have the money, knock your selves out and add ppc brand bidding restrictions to your affiliate program, but be confident that you have all those gaps covered. If you have the slightest doubts, Id opt for allowing affiliates to brand bid because in all likelihood they know what search terms people are looking for with regards to yours and your competitors company consumer products or services. As Kieron Donoghue of UKoffer.com points out “Allowing your affiliates to bid on your brand names is a great way to lock out your competitors on the ppc search engines. For example lets say your brand is “Marks & Spencer” and your business is selling*all*sorts of stuff*online (bear with me) then by allowing your affiliates to bid on brand name and generics you can keep your competitors at bay.”Question, do merchants really understand the mechanics of PPC and is it fair for us to laugh at ridiculous restrictions that some merchants impose? To lay the blame at the door of ignorance in this heated arena could be argued but Google’s own policy is so vague that I can understand how merchants get all heated, the rules are complex even for the most savvy, here is where I believe some of the problems stem from.
Its understanding the mechanics which can lead to misinterpretation and give rise to urban myths. Without excusing some heavy handed ppc restrictive merchants, it is a grey area for some of them. I wonder if its not a question that some merchants feel they need to be seen as being in control, after all they are running a business and you cant admit in public that you simply don’t know what you are doing and instead of asking for help and guidance, simply look at the big brands and follow their lead, question… how do you know if they are doing it right?. Ill leave the last word with Adam Davies from Justhom.com, “We do this as it tends to be the power affiliates who use PPC and in general they know the PPC market better than we ever could, so it frees up our time on doing what we do best… selling HOM mens underwear and swimwear” Adam Davies, MD of JustHom.com
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