How to...Sales & Marketing

How to Reduce Advertising Costs by 20% in 10 Minutes

Most businesses that run Google search ads usually have a special search campaign that is set up to protect their brand against competitors. Its main feature is to show ads for brand queries (for example, ‘Amazon’ or ‘eBay’).

Without this, it’s even easier for other companies in the same industry to show ads for your brand search requests and steal your web traffic. But is this brand-specific advertising totally justified? Does it even make sense? Let’s dig a little deeper:

How effective is brand-specific advertising?

This is a pretty huge question and sadly, there is no one-size-fits-all answer for each individual case. Every business comes with its own quirks and idiosyncrasies, varying with industry, product, size, location, and structure.

Regardless, we do know that depending on the popularity of a company or brand, this kind of campaign can consume between 5% and 20% of an entire PPC budget. And for extremely popular brands such as Amazon and eBay, this can even rise to as much as 30-40%.

If someone is searching for your company online, then they must have a pretty serious intention to visit your website. At this stage, what is the likelihood that they will go to a competitor instead? What is the probability that whilst specifically looking for an iPhone, you’ll change your mind and buy a Samsung? It’s low – perhaps no more than a 5% chance. So then, if just 5 out of 100 people will turn to a competing company (sometimes just out of curiosity even), how useful is it to show ads to all 100 of those people? In roughly 90-95% of cases, this advertisement is not justified.

In general, you need to understand that most people who come from branded search requests and want to visit your site, will scroll through ads (even those from your competitors) and land on your site via organic results, which should appear there anyway. Our reasoning is that you shouldn’t have to pay for organic traffic that belonged to you in the first place.

Exceptions:

  • Remember that for some niche industries (hotels, restaurants, etc.), brand advertisement is important when an aggregator can show the same offer as you. For example, Booking.com might also show ads for your hotel, so it is important to compete in the same spaces.
  • Also sometimes the competition for your brand request can be so high or important for you, that it can really cause a regular loss of customers. For example, the search request ‘ActiveCampaign’ (a fairly new CRM tool) is highly occupied. As the company is not so authoritative yet and there are several competitors, in cases like this I would suggest having a brand campaign running.


What marketers say

Of course, in 90% of cases, marketers will justify their branded advertising campaigns, since they are usually the highest-converting and do a lot to bolster the overall effectiveness of an advertising campaign.

However, there is still serious debate on this topic. Steve Tadelis, an eBay consultant, raised this issue very seriously, which was well-covered in the article, ‘The new dot com bubble is here: it’s called online advertising’. 

What to do?

The answer is actually very simple: if your brand campaign is not super important (as for hotels and other highly competitive niche businesses), then just try to suspend it for a couple of months and look at the conversions.

If the overall level of conversions did not fall, with those from organic traffic compensating for those that would have come from branding advertising campaigns, then you can safely put an end to your branded PPC ads.

So there we have it: a saving of 5-20% of your advertising costs in just 10 minutes.

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I am professional writer and video creator
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