Trademark bidding—also known as “brand bidding”—is simply the act of targeting paid search advertisements to branded keywords (searches that include a brand name, or some variation).
There are many good reasons why brands bids on their own keywords:
Depending on your industry and business setup, there are a variety of potential trademark bidders you might encounter. For example, hotel brands tend to find online travel agencies (OTAs) bidding on their brand terms. Electronics brands often have resellers of their products (retailers) show up. Here are some of the common types of advertisers that we see:
Depending on the type of advertiser, brands may want to restrict trademark bidding. Those restrictions can range from a complete ban on targeting any branded keywords to specific instructions on permitted keywords, geographies, ad copy, and even ad position.
The answer to this question truly depends on the program. Each merchant has its set of rules that govern what affiliates can and can’t do when it comes to PPC. We commonly see the rules fall into one of these categories:
When PPC Is NOT Allowed
Whether it’s due to a brand sensitive executive, an in-house paid search team or a lack of understanding of the affiliate channel, some merchants simply ban affiliates from using PPC to promote them.
If you are using PPC to drive traffic to your site or any specific merchant, pay particular attention to programs that forbid PPC. Though you may not be promoting that specific merchant, if they are mentioned on the landing page (consider sidebars with “recently added” coupons and deals for example), or one to two clicks away from that landing page, the merchant could have an issue.
When PPC Is Allowed
…but Trademark Bidding is prohibited, and additional keywords are restricted
The next category of merchants has thought through their PPC strategy and understands that affiliates can contribute to the big picture, but they want to keep the affiliates on a short leash.
Their reason – competition.
If the merchant is bidding on their trademark or a set of long-tail keywords, like “area rug coupons,” they don’t want their affiliates who are sending traffic to them to drive up the price of the clicks. The merchant knows the words they have covered, and they don’t want affiliates to compete with them on those words. So, they simply restrict affiliates.
They’ll start by prohibiting keyword bidding, and then will add a list of other keywords that affiliates can’t “outbid” them on. So, they essentially secure their top spot for those words/phrases. Affiliates can bid on them – but they can’t drive the price up for the merchant.
These merchants have thought about this strategy a LOT. They are watching their affiliates and their PPC competitors… most of them will subscribe to tools that help them monitor the activity and will know within seconds if you violate their terms.
When PPC Is Allowed
…but Trademark Bidding is prohibited
Like the last category, these merchants have a PPC group that does not want to compete with affiliates. They may not have their long-tail strategy worked out, or may have an abundance of SKUs, deals, and topics and have decided not to restrict additional terms. Whatever their driving force, expect these merchants to have a close eye on their trademark in paid search results – if you violate this term, they’ll know about it within seconds.
When PPC Is Allowed
…with no restrictions
The last category holds the most potential for affiliates. These merchants say “go for it.” You’ll find that most of them don’t have an in-house PPC department (if they do – there is fierce competition between departments) and have decided to leave it to their affiliates to handle their PPC.
This “kill two birds with one stone” approach could be your key to success with affiliate marketing…
If a merchant allows you to bid on their trademarks, and you’ve got some budget to throw behind some PPC ads, it’s simply a numbers game. Can you generate enough sales (searchers who click and buy) with the keywords and ads you choose to earn more in commissions than you spend on those clicks?
Why does trademark bidding make such a big difference? Once a consumer is using a brand name or a store name, they are further along in the buying process than those searching for non-trademarked items.
Consider who is closer to purchasing a TV, someone who searches “40-inch TV deals” or “Samsung TV deals at Best Buy.” The one searching for a 40″ TV is higher in the funnel – they still have some research and analysis to do before deciding on an exact TV. The person who has searched for a Samsung at Best Buy has narrowed down both the brand of the TV and the store. Though they aren’t guaranteed to purchase a Samsung at Best Buy, they have made it further through the sales funnel, and a deal on a Samsung at Best Buy could push them to that final purchase.
Bidding on trademarks allows you to benefit from all of the work that the brand has done to build a name for themselves, your job is just to push them over the edge to make the purchase.
