So already I have looked at one side of the argument that concludes three reasons to bid on brand names in PPC. The argument includes preventing competitors stealing your traffic, producing synergy like results for your own brand name and more. However, there is an argument that PPC advertisers should not waste away their budget thinking about and adapting their campaigns to bid on brand names. Although you may think bidding on brand names can be effective for the reasons mentioned in my previous article, there are some inherent drawbacks to bidding on brand names too, highlighted in this article.
 
 

#1 PPC Bidding War

One of the main points to bid on brand names is to protect the traffic that are trying to search for you and not a competitor – you do not want your traffic being stolen by competitors when they are clearly searching for your brand name. However, how can you stop this? The only way you can do this is by changing your maximum CPC to accommodate this. To retain as much traffic for your own brand name as possible, it is crucial to get the top spot of paid search results. However, if competitors want this badly as well, there is the very likelihood that you will get into a PPC bidding war for that location. In general, PPC bidding wars are a bad idea as they usually escalate the price of keywords to something that they simply are not worth – this can easily happen to brand names.
 

#2 Inherently Low CTRs

One of the other positive outcomes of bidding on brand names is that you can steal traffic away from other competitors by bidding on their brand names and directing traffic to your website. However, the main problem with this is that getting the click from the web user to begin with can sometimes be quite difficult. This is because when a web user searches for a brand name on search engines, it can be seen quite clearly that they have already made up their mind about the conversion. Therefore, if you are attempting to ‘lure’ web users away to your product/service, the chances are you won’t if they have made their mind up already. This will result in a lower CTR for your adverts with branded keyword targeting which will ultimately decrease your PPC Quality score. As a result of your Quality score decreasing will cause the cost of your advert to generate ad impressions to increase…
 

#3 Increases Your Actual CPC

You may not be hitting your maximum CPC. However, as a result of the decrease in your Quality score from an inherently low CTR, it will cost more for your advert to show up on paid search results for that brand keyword phrase. Therefore, there are two outcomes from this. If you do not get a click, your CPC will increase. If you do get a click, you are paying more than you really wanted to for that click (and that is for traffic that will also be hard to win over).