To use branded keywords or not? Rationale of professional search-engine marketers for brand bidding strategy

Consumers are increasingly more familiar with placing orders online and being able to shop for their favorite brands whenever and from wherever they prefer. This change in consumer behavior has put additional pressure on companies to compete over online visibility, since this is where today’s consumers spend much of their shopping time. In practice, firms have started to allocate higher shares of marketing budgets to online advertising, including display and social advertising, as well as email and search engine marketing (SEM). In particular, with SEM, organizations can reach consumers looking for information about a particular brand in virtually any location in the world. Search engines are thus major match-makers between consumers and brands (Jansen &Mullen, 2008; Edelman et al., 2005). When a search is conducted, a search engine (e.g., Google orBing) displays two types of results: organic and paid search results. For the latter, search engines enable companies to bid on keywords (users’ search terms), showing text advertisements on eligible searches. Selection of the right keywords to bid for forms therefore a crucial SEM challenge (Jansen & Schuster, 2011). The selection of keywords gives companies also the possibility to buy their competitors’ brand keywords (a practice called ‘piggybacking’), and thus create a competitive scenario when a consumer is searching for a specific brand2. It would then seem obvious that any company would bid on its own brand keywords; yet, this is not the case in practice, as some advertisers consider it as wasteful spending. These marketers view that brand bidding cannibalizes the traffic from their organic rankings, and therefore do not find bidding on their own brand terms reasonable.