Google Trademark Bidding - Impact of brand bidding over-egged?

There has been a lot of noise about the impact of competitive bidding on branded and trademarked keywords. Although it will have an impact we think that the situation has been overstated by brands fearing the worst and seeking to change Google’s policy.

Reality Check - Ad Quality Still Affects £ CPC

People seem to have forgotten that the Google AdWords auction is based on quality, relevance and not just bid. Whilst the "depth of market" (number of advertisers) impacts bid prices significantly there is still the question of ad quality and ad relevance.

Advertising on a competitors brand terms typically results in (although there are noteable exceptions) poor click thorough rates which is the single biggest factor in measuring both quality and relevance in the auction.

This negatively impacts the costs for competitors bidding on brand terms and may actually benefit the brand owner by improving their "relative quality" to the market in some cases. Regardless the brand owner will still almost always pay vastly less for their own brand clicks than one of their competitors, even if they have to pay more than they previously would have.

Still Not Great News for Big Brands

The original argument which in my opinion is more damaging is whether it is ethical for one company to hijack another company's hard won brand recognition for their own ends and for a major media owner to allow it to happen.

"Thompson Holidays" for example generates an average of 450,000 searches per month according to Googles keyword tools. This is a representation of their investment in marketing on and offline.

Contrast this with "Directline holidays" 33,100 and it is obvious to see how concerns about brand hijacking may be well founded for big brand travel companies.

Summing Up

For big brands the stakes are higher but the majority of travel companies should not get too hung up on this "threat" and should instead focus on if the ROI for brand bidding makes sense in the face of potential legal reprisals and moral questions.