The State of Branded Keywords in Paid Search Q3 2014

Transcription

1 The State of Branded Keywords in Paid Search Q3 2014

2 Table of Contents Study Summary... 1 Methodology... 1 General Findings... 5 Clothing & Apparel... 8 Consumer Electronics Consumer Finance Education Home Services Hotels Insurance Internet & Telecom Online Retail Software, Web & Technology... 27

3 Study Summary This study evaluates the paid search landscape of the core branded keywords of over 250 popular, consumer-facing brands from 10 different industry categories. BrandVerity monitored these core brand terms during Q3 of 2014 to evaluate trends in how brands are targeted in general and within their specific industry segments. The purpose of this study is to provide brands with a benchmark of what advertisements appear on the search engines when potential customers search for their brand. Methodology Setup This study was entirely based on the core branded keywords of the various brands included in the study. These core branded keywords are terms that clearly signal an interest in a specific brand and are typically used navigationally to locate the brand on various search engines. These fit into the following categories: Brand Name the stand-alone name of the brand (e.g. BrandVerity ) Domain Name the primary domain the brand uses for its web presence (e.g. brandverity. com ) Misspellings & Variants close variations of the brand name that users commonly search for (e.g. BrandVarity or Brand Verity ) BrandVerity monitored each of these core terms multiple times per day across the major U.S. search engines (Google, Bing, Yahoo, AOL, and Google Mobile) during Q3 of BrandVerity s monitoring was conducted using BrandVerity s Paid Search Monitoring tool. Monitoring was distributed across a wide range of geographic locations in the United States to develop a nationwide snapshot of how brands are affected. Spotlight on Trademark Usage This study specifically examines how brands trademarks are used by paid search advertisers. There are two types of ads included in the study: A) ads that appeared on one of these brand s core brand terms AND included that brand s trademark (or close variation) in its ad copy, and B) ads placed by the brands themselves. All other advertisements were excluded from the study (further clarification is provided in the diagram that follows). There are several reasons for this methodology. To start, the use of trademark terms in ad copy strongly encourages users to click on these ads. As this study purely monitors core brand terms, ads that include the relevant trademark in their ad copy would be more attractive to the searcher. Further, these ads would also be more likely to catch the searcher s eye, since the search engines place some ad copy in bold when it matches terms in the user s query. 1

4 Another reason is that these ads are typically more actionable for brands. Trademark usage provides a stronger signal that a given advertiser actually has a relationship with the brand (by promoting their product or service in some way). This makes the ads subject to any agreements that a brand might have with those advertisers. Furthermore, if the trademark usage is by a thirdparty advertiser, brands can submit trademark complaints to the search engines and have these ads removed entirely. Finally, the brands own ads are included as a benchmark against which to compare the other ads. This metric helps demonstrate the share of advertising represented by competing advertisers using these brands trademarks. Guide to the Ads Included in the Study Brand Ad an ad placed by the brand itself on its own brand terms (e.g. an ad placed by brandverity. com on a search for BrandVerity ) Non-Brand Ad an ad placed by another advertiser (i.e. an advertiser who is not the brand) that includes the brand s trademark in its ad copy Figure 1 This ad was placed by the brand itself, so it would be counted as a Brand Ad. Figure 2 Ad includes the trademark of the searched-for brand in its ad copy. Since the ad was not placed by the brand itself, this would count as a Non-Brand Ad. 2

5 Figure 3 Ad does NOT include the trademark of the searched-for brand in its ad copy. This ad would be excluded from the study. Developing the Metrics This study focuses exclusively on ads that use brands trademarks in their ad copy. After collecting all of the ads that appeared on each brand s core terms, BrandVerity selected the subset of ads that also included that brand s trademark (or close variation of the trademark) in their ad copy. After filtering the ads down to this subset of trademark usage, BrandVerity also applied some weighting in order to more accurately reflect the impact that brands experience. Using search volume data from Google AdWords, ads were weighted according to which search term they appeared on. Ads that appeared on more highly trafficked search terms were weighted more heavily; ads that appeared on lower-traffic search terms were weighted less heavily. Additionally, all brands were weighted equally within their category to ensure that brands with disproportionately high search volume were not over-represented in the data. Terminology & Advertiser Types A number of terms recur throughout this study. Some of these are used to describe paid search and the study s metrics, but most are used to describe various types of Non-Brand advertisers (advertisers who are NOT the brands themselves) that appear in the study. These terms are defined below: SERP short for Search Engine Results Page, a page of ads resulting from a single search of a brand term Ads per SERP the average number of individual advertisements that appear on each Search Engine Results Page 3

6 CTR clickthrough rate, the percentage of the time that an ad is clicked on by a user when it appears on a Search Engine Results Page CPC cost per click, the average amount that an advertiser pays for each click on its campaigns Affiliate performance marketing partner that uses a tracking link (either from a third-party such as an affiliate network or directly provided by a brand) to earn commissions for sales or other actions on a brand s site Comparison Shopping Engine (CSE) a site that lists products and pricing with outbound links to various retailers websites Download & Toolbar sites that primarily promote bundled software installers, toolbars or other downloads Franchisee a party that licenses the brand name from a larger chain, typically localized to a specific place or region Lead Generation a site that generates leads using web forms, generally selling those leads to an exchange or a specific brand Online Travel Agency (OTA) a site where a traveler can book hotel rooms, airline tickets, and other travel itinerary Partner a marketing partner that is not an affiliate or lead generation site and helps a brand promote its products or services Reseller a retailer other than the brand that was searched that sells the brand s offerings or products and services that complement the brand s offerings Search Arbitrager an advertiser who places an ad with the sole purpose of attracting traffic to a page that shows additional ads Other Non-Brand advertisers who did not fit into one of the categories above 1. 1 In some cases, advertisers who represented a negligible fraction of the advertising in a particular category were included in the Other segment. 4

7 General Findings Figure A Ads placed by the brands themselves compared to ads placed by competing advertisers who used those brands trademarks, averaged across all categories. Non-Brand Ads Less Common on Google and Google Mobile, But Still Significant One of the common themes throughout the study was the stark contrast between the various search engines. Specifically, when averaged across all of the study s categories, the numbers of Non-Brand Ads per SERP were relatively low on Google and Google Mobile compared to the three other search engines. Those figures were 0.28 Non-Brand Ads per SERP on Google and 0.17 Non- Brand Ads per SERP on Google Mobile. By comparison, brands own ads exceeded these non-brand ads on Google and Google Mobile, with 0.73 Brand Ads per SERP and 0.71 Brand Ads per SERP, 5

8 respectively. That s more than two brand ads for every non-brand ad. Of course, considering that the queries monitored in this study are core brand terms, it s still quite interesting to see any significant trademark usage by advertisers other than the brands themselves. Ultimately, that means that every few searches, a potential customer is exposed to a competing ad that uses the brand s trademark. Non-Brand Ads Outweigh Brand Ads on Bing, Yahoo, and AOL While trademark usage by non-brand advertisers was less common on Google and Google Mobile, it was quite high on all other search engines included in the study. On Bing, Yahoo and AOL, there were at least two Non-Brand Ads per SERP. With the number of Brand Ads per SERP hovering around 0.7 to 0.8, that s nearly three competing ads using these brands trademarks for every ad placed by the brands themselves. Why were there so many more non-brand ads on these engines? It s not entirely clear, but it likely has something to do with Google s Quality Score. Google s AdWords system assigns a score of 1-10 to advertisements based on their performance and relevance. When an ad s Quality Score is below a certain threshold (as determined by Google), Google s algorithms will often opt not to show that ad. A higher Quality Score threshold on Google could account for the relatively low figures of Non-Brand Ads per SERP on Google and Google Mobile compared to AOL. Despite the fact that the ads are all pulled from the same pool (AdWords), Google could be more selective about what it shows. Search Arbitrage Is an Ongoing Issue, Inflates Brands Marketing Costs Search Arbitrage accounted for the largest share of Non-Brand ads in the study, representing 24.1% of such ads on AOL, 22.4% on Bing, 11.2% on Google, 5.9% on Google Mobile, and 28.8% on Yahoo. Search Arbitragers frequently target branded keywords, knowing that such keywords convert well and are likely to result in the clicks that make them profitable. Additional information on Search Arbitrage can be found in this post on the BrandVerity blog. Once again, the contrasts across the various search engines are interesting here. Whereas Search Arbitrage was a very consistent player on AOL, Bing and Yahoo (with roughly 0.5 Ads per SERP on each), its presence plummeted on Google and Google Mobile with 0.03 and 0.01 Ads per SERP, respectively. This could certainly be explained by the Quality Score observations that are discussed above. Search Arbitrage typically leads to a landing page with no real content, so it should have a low Quality Score. What s troubling here is that even if arbitrage isn t appearing on Google or Google Mobile, it can still interfere with brands campaigns on Google AdWords. If a brand has opted into Google s Search Network (a very common choice), which includes AOL and other sites, arbitrage will likely reduce that brand s clickthrough rate (CTR) and increase its cost per click (CPC). 6

9 The levels of Search Arbitrage are higher than reported above, too. In many cases, sites identified as Comparison Shopping Engines (CSEs) appeared in categories where price comparison would make no sense. For example, there were significant levels of trademark usage by CSEs in the Home Services and Internet & Telecom industries, two categories whose brands are known for providing services rather than products. Much like Search Arbitragers, CSEs generally lead visitors to a landing page on their site where a search field is pre-filled. When that search returns actual products, the products can be compared on the CSE s site. But, when those searches don t return relevant results, many CSEs will include search ads in their place. In these cases, their ads are effectively the same as Search Arbitrage. For this reason, we have combined CSEs with Search Arbitrage in the relevant categories. 7

10 Clothing & Apparel About These Brands This category includes 24 of the 25 most popular brands 2 that produce clothing, apparel, accessories and similar items. The designation of most popular is based on monthly search volume in the United States, according to data from Google AdWords. Figure B The number of ads per Search Engine Results Page placed by different types of advertisers, averaged across all brands in the Clothing & Apparel category. 2 One brand was removed from the study, since its brand name was relatively generic and led to significant false positives. 8

11 High Rates of Trademark Usage on All Engines Except Google Mobile Compared to the study average, Clothing & Apparel brands experienced more Non-Brand Ads per SERP on all search engines except Google Mobile. The average number of Non-Brand Ads per SERP hovered around the 3.0 mark for AOL, Bing, and Yahoo, meaning that a brand should expect three non-brand results per search. By contrast, their own ads appeared at an average rate of 0.9 Ads per SERP, or about once a page. Resellers and Comparison Shopping Engines Dominate Trademark Usage Viewing the trademark usage by advertiser type, it is clear that the high rate of non-brand trademark usage is linked to the extensive use of Resellers by Clothing & Apparel brands. Resellers and CSEs accounted for the bulk of ads using these brands trademarks. On Google, Resellers accounted for 56% of non-brand ads in this category; CSEs accounted for another 36%. These percentages were similar for other engines as well. Because brand name queries are indicators of purchase intent, Resellers often choose to advertise on the brands names of the products they carry, as demonstrated by the statistics here. How brands choose to govern their relationships with Resellers is a complex issue, but, if a brand does run its own ecommerce site, it may be in the brand s best interest to carefully consider how and on what trademarks its Resellers are allowed to bid. This issue is discussed at some length in BrandVerity s Reseller Questions Blog Series. Takeaway for Brands Even on Google, there were 0.34 Non-Brand Ads per SERP targeting these brands and using their trademarks in the ad copy. That means roughly every third search for one of these brands would show an ad that could easily divert traffic from the brand s own website. If the brand is focused on increasing its direct online sales, it may want to consider its agreements with retail partners and CSEs. By reducing those advertisements, a brand can increase the traffic that comes directly to its own ecommerce site. Furthermore, by reducing competition on their core brand terms, brands can reduce their cost-per-click (CPC) in paid search. Tactics to do so can be found in BrandVerity s Reseller Questions Blog Series. 9

12 Consumer Electronics About These Brands This category includes the 25 most popular brands that produce consumer electronics products including computers, smartphones, televisions, printers, gaming consoles, and other items. The designation of most popular is based on monthly search volume in the United States, according to data from Google AdWords. The brands in this category do not necessarily have their own online stores, although they typically do. Figure C The number of ads per Search Engine Results Page placed by different types of advertisers, averaged across all brands in the Consumer Electronics category. 10

13 The Industry with the Highest Rate of Trademark Usage Of all the categories in this study, these brands trademarks were used the most frequently by competing advertisers. Overall, these brands experienced the most Non-Brand Ads per SERP on all search engines except for Google and Google Mobile (which were also near the highest). On AOL, 4.76 non-brand ads appeared per SERP. That s nearly double the rate across the entire study (2.43). Bing and Yahoo had similar results, with Non-Brand Ads per SERP at 3.76 and 4.18 respectively compared to study averages of 2.14 and Resellers and Comparison Shopping Engines Dominate, But Download Sites Also Common Similar to the Clothing & Apparel category, Resellers and CSEs accounted for the bulk of non-brand ads in this category. For example, on Bing, Resellers accounted for 43% of non-brand ads; CSEs accounted for another 31%. These metrics were also high on all other engines, with the exception of Google where CSEs represented only 4% of non-brand ads. While the mix of advertisers was similar in both categories, the overall Non-Brand Ads per SERP were most likely magnified in Consumer Electronics due to the absence of brands that exclusively sell direct to consumers (by comparison, the Clothing & Apparel category included several brands that only sell direct). The similarities between Consumer Electronics and Clothing & Apparel start to break down when considering a third class of advertiser: Download and Toolbar sites. These sites accounted for 13% of ads using Consumer Electronics brands trademarks on Bing, with similar numbers on all engines except for Google and Google Mobile. Many of these sites promoted driver downloads for products made by the various electronics brands in the category. Takeaway for Brands With Resellers as the most dominant advertiser in this category, brands may want to consider how they structure their agreements with their retail partners and how they enforce them. Considering that the queries monitored in this report are purely core brand terms (brand name, domain, and basic misspellings), even 0.41 Non-Brand Ads per SERP appearing on Google is a significant amount of competition from a brand s retail partners. Considering how central these brand terms are, this finding would suggest that these brands are also experiencing even higher rates of trademark usage on longer tail brand terms (for example [BrandName] [product] ). If a Consumer Electronics brand has the goal of increasing direct sales, these ads would make that more difficult. 11

14 Consumer Finance About These Brands This category includes the 25 most popular brands in the consumer finance industry including banks, credit card issuers, investment firms, and similar brands 3. The designation of most popular is based on monthly search volume in the United States, according to data from Google AdWords. Figure D The number of ads per Search Engine Results Page placed by different types of advertisers, averaged across all brands in the Consumer Finance category. 3 This category does not include retirement firms that specialize in life insurance and similar plans, as those brands were included instead in the Insurance category of this study. 12

15 Minimal Trademark Usage on Google and Google Mobile, High Rates Elsewhere While there s certainly a fair amount of trademark usage on AOL, Bing and Yahoo for these brands, they may be relieved to find an incredibly low amount of trademark usage on Google and Google Mobile. The Non-Brand Ads per SERP on those engines were the lowest of any category in this study. They re so low, in fact, that they can t really be seen on the graph at all. By comparison, the figures on the other engines (particularly Yahoo) remain significant. It s actually quite interesting to see such a spike on Yahoo compared to the other engines. While in most cases the amount of trademark usage per SERP on Yahoo was similar to that on Bing, in this case it was nearly four times as high 2.09 Non-Brand Ads per SERP versus 0.55 Non-Brand Ads per SERP. Considering that the Yahoo Bing Network governs the ads that appear on both, this is surprising. While the root cause is unclear, it s certainly possible that Bing is helping brands curb this trademark usage behind the scenes. Search Arbitrage Inflates Brands Marketing Costs Within this category, Search Arbitrage accounted for the majority of ads using these brands trademarks in their ad copy. On Bing, Search Arbitrage represented 74% of non-brand ads with similar numbers on other engines (except for Google and Google Mobile). Search Arbitrage interferes with brands search marketing by diverting traffic from brands websites and increasing the cost of brands paid search campaigns. The typical results are decreased Clickthrough-Rate (CTR) and increased Cost-per-Click (CPC). Considering that consumer finance brands are often accustomed to paying some of the highest cost-per-click in the industry, they may be less likely to notice these effects. Instead, their branded campaigns may simply be set to high bids that they re perfectly willing to pay. Unfortunately, this makes Search Arbitrage an easy way to take advantage of these companies, as increased cost-per-click goes largely unnoticed and the payoff for arbitrage is even higher. Takeaway for Brands Although Search Arbitrage can be highly disruptive to a brand s digital marketing efforts, there is recourse for brands. When Search Arbitrage uses a brand s trademark in its ad copy, it violates the search engines trademark policies. Because the page neither provides informational value about the brand nor makes the brand or product the central focus of the landing page, these ads can be taken down. To start taking action against these ads, brands can submit trademark complaints to the relevant search engines. 13

16 Education About These Brands This category includes 9 of the 10 most popular brands 4 in proprietary education, representing online schools as well as schools with campus-based programs. The designation of most popular is based on monthly search volume in the United States, according to data from Google AdWords. Figure E The number of ads per Search Engine Results Page placed by different types of advertisers, averaged across all brands in the Education category. 4 One brand was removed from the study, since its brand name was relatively generic and led to significant false positives. 14

17 Google and Google Mobile Show Very Low Levels of Trademark Usage Similar to the Consumer Finance industry, the numbers of Ads per SERP from competing advertisers using these brands trademarks were very low on Google and Google Mobile. In fact, of all the categories in this study, these figures were the second lowest in the Education category: 0.04 Non- Brand Ads per SERP and Non-Brand Ads per SERP, respectively. Search Arbitrage Still Creates Obstacles Once again, much like in the Consumer Finance industry, for Education brands the majority of trademark usage came from Search Arbitrage. On Bing, arbitrage accounted for 56% of Non-Brand ads. Search Arbitrage occurs when an advertiser places a search ad that when clicked on takes the user to a page with more ads (for a more complete explanation, see the Arbitrage section in the General Findings at the beginning of this report). The key issues with arbitrage are that it diverts traffic away from brands sites and increases the cost of brands search marketing campaigns. The extent of Search Arbitrage in this category may be explained by another similarity to Consumer Finance. Much like in the Consumer Finance industry, the Education industry is accustomed to paying high customer acquisition costs and by extension, high costs per click in paid search advertising. Because of that, Education brands may be perfectly willing to pay the inflated Costper-Click (CPC) on their branded keywords. This CPC would likely still be much lower than the CPC on other types of keywords, drawing little attention to it and thus enabling Search Arbitrage to go unnoticed. Takeaway for Brands While search arbitrage can present a serious problem for Education brands, the upside is that brands do have recourse. Any Search Arbitrage who uses trademarked brand terms in its ad is in violation of the search engines policies. The search engine will take down the reported ad if the site neither provides information about the brand nor makes the brand the main focus of the landing page. To begin this process, a brand needs to file a trademark claim with the search engine. 15

18 Home Services About These Brands This category includes 9 of the 10 most popular brands 5 in the home services industry, including real estate brokerages, moving companies, and providers of services such as extermination, plumbing and cleaning. The designation of most popular is based on monthly search volume in the United States, according to data from Google AdWords. Figure F The number of ads per Search Engine Results Page placed by different types of advertisers, averaged across all brands in the Home Services category. 5 One brand was removed from the study, since its brand name was relatively generic and led to significant false positives. 16

19 High Trademark Usage on Google and Google Mobile Among all the categories included in this study, Home Services presented the highest levels of trademark usage on Google and the third-highest on Google Mobile. The Ads per SERP on those engines were 0.65 and 0.36, respectively still relatively small numbers, but higher than in any other industry. On the other hand, the amount of trademark usage on other search engines was right around the study s average, with AOL, Bing, and Yahoo all showing approximately 2 Ads per SERP. Distributed Marketing Strategies Open Door to Brand Bidding by Lead Generation Sites and Partners Brands in this category commonly defer much of their marketing to local Partners, Franchisees, and Lead Generation sites. This is well-reflected in the data. On Google and Google Mobile, the non-brand ads were dominated by Lead Generation sites (49% on Google Mobile, 12% on Google) and by Partners/Franchisees (32% on Google Mobile, 18% on Google). When looked at across all search engines monitored, however, the numbers change substantially, with Search Arbitrage taking over the results (likely explained by Google s lower tolerance for Search Arbitrage, as discussed in the General Findings at the beginning of the study) and a more even mix among Lead Gen and Partners/Franchisees. In particular, Pay-Per-Call Lead Generation sites, which are paid for the number of customers they route to an advertiser via a phone call, are well-suited to Google Mobile, as they can present an ad with a clickable phone number in the ad copy. Similarly, local brand Partners or Franchisees can produce ads with local phone numbers, betting on an assumption that potential clients, searching on a phone, would prefer to speak to a local agent. Takeaway for Brands The established delegation of marketing to local Partners and Franchisees opens up this industry to a higher incidence of brand bidding. Because Franchisees and Partners may in turn hire Lead Generation sites or otherwise outsource their paid marketing campaigns, several levels of separation are created between the national brand and the parties bidding on their brand terms. This can cause brand image issues, including customer confusion, pricing or discounting discrepancies, and inconsistent messaging. Brands with concerns about these issues may consider driving more traffic directly through their own national sites. This can provide increased control over brand image and marketing costs. Of course, in order to accomplish this, brands also need to consider what role they want their Franchisees and Partners to play in paid search and may need to renegotiate their terms. 17

20 Hotels About These Brands This category includes 22 of the 25 most popular Hotel brands. 6 The designation of most popular is based on monthly search volume in the United States, according to data from Google AdWords. Figure G The number of ads per Search Engine Results Page placed by different types of advertisers, averaged across all brands in the Hotels category. 6 Three brands were removed from the study, since their brand names were relatively generic and led to significant false positives. 18

21 Vast Difference in Trademark Usage on Google and Google Mobile vs. Other Engines Hotel brands experienced relatively low levels of non-brand trademark usage on Google and Google Mobile, with both at 0.1 Non-Brand Ads per SERP. These figures provide an interesting contrast to those in BrandVerity s Report on Hotel Brands, OTAs and Paid Search, which showed 1.11 Non- Brand Ads per SERP on Google and 0.26 on Google Mobile from Online Travel Agencies alone. While this is probably accounted for by the differences in search terms monitored in these studies 7, it indicates that the core brand terms monitored in this study are only the tip of the iceberg for hotel brands. The numbers look very different on AOL, Bing, and Yahoo. Bing and Yahoo, in particular, averaged an extremely high 2.93 and 2.96 Non-Brand Ads per SERP, respectively. These numbers are the thirdhighest in the study, both on Bing and Yahoo. AOL clocked in somewhere in the middle at The vastly different numbers between Google and the other search engines suggest that Hotel brands may be monitoring their branded terms on Google, but not on the Yahoo Bing Network. The slightly lower number for AOL probably reflects how proactive these brands are on Google, since AOL is part of Google s search network. Online Travel Agencies Lead the Pack, Franchisees Make an Appearance Online Travel Agencies (OTAs) are clearly the most common advertiser type in this category, representing over 50% of non-brand ads on all desktop search engines. BrandVerity s Report on OTA Brand Bidding covers this issue in detail and outlines tactics for brands who are evaluating their agreements with OTAs. The other interesting statistic in this industry is the amount of bidding by Franchisees of Hotel brands. Although these figures are still relatively small, they are present (most notably on Yahoo and AOL). This suggests that local branches of national chains are seeing a benefit from targeting their campaigns to general brand terms and not just to brand plus terms (e.g. [BrandName] location ). 7 BrandVerity s Report on Hotel Brands, OTAs and Paid Search included brand-plus search terms, such as [Brand Name] [city]. 19

22 Takeaway for Brands For Hotel brands the major takeaway from this study should be that brand bidding by OTAs is an ongoing issue even if Hotel brands are working to curb it on Google and Google Mobile. The number of Ads per SERP placed by OTAs on non-google engines is still very high. Additionally, OTAs may be bidding on longer-tail brand terms such as [Hotel Brand] [City], which are not part of this study. These practices can be minimized through carefully constructed contracts with OTAs and constant monitoring of who is bidding on brand terms. Methods for effectively working with OTAs can be found in BrandVerity s Report on OTA Brand Bidding. 20

23 Insurance About These Brands This category includes 24 of the 25 most popular brands 8 in the Insurance industry, including providers of auto, home, life, property and casualty insurance. The designation of most popular is based on monthly search volume in the United States, according to data from Google AdWords. Figure H The number of ads per Search Engine Results Page placed by different types of advertisers, averaged across all brands in the Insurance category. 8 One brand was removed from the study, since its brand name was relatively generic and led to significant false positives. 21

24 Low Levels of Trademark Usage Overall, Disproportionately High on Google and Google Mobile Overall, brands in this category saw low levels of trademark usage by competing advertisers. Even on AOL, there were only 1.83 Non-Brand Ads per SERP, which is considerably lower than the study-wide average of 2.43 on AOL. This category also has one of the most even distributions between brand and non-brand ads, meaning that competing ads aren t substantially overpowering the brands own. However, despite this general trend in the category, Insurance actually had relatively high levels of trademark usage on Google and Google Mobile compared to the other categories in the study. At 0.45 and 0.39 Non-Brand Ads per SERP, respectively, Insurance had the second highest rate of Non-Brand Ads per SERP on these engines a stark contrast to Insurance s sister-industry, Consumer Finance, which had the lowest amount of trademark usage on Google. Lead Generation Sites Bidding on Brand Terms The high numbers of Non-Brand Ads per SERP on Google and Google Mobile are largely explained by one class of advertiser: Lead Generation sites. Lead Generation sites accounted for 80.7% and 90.0% of all non-brand ads on Google and Google Mobile, respectively. Lead Generation sites also made up the largest percentage of non-brand ads on all engines except for AOL (where Search Arbitrage accounted for 55% of these ads). Brands typically buy leads from Lead Generation sites under the assumption that they re incremental meaning the brand would not have been able to acquire the lead directly through its own marketing channels. However, considering that this study looks purely at searches for brands core brand terms, brands may question how incremental those leads are in this case. This topic is discussed at length in BrandVerity s Lead Generation Series on the BrandVerity Blog. Takeaway for Brands Brands may have a couple causes for concern here. If a Lead Generation site bids on a brand term and then sells that customer back to the brand, it likely results in increased customer acquisition costs. Second, Lead Generation sites may not always sell their leads back to the brand that the customer originally searched for. Leads could be sold to a variety of companies, including the brand s competitors. Ultimately, despite searching for a specific brand, a customer would receive quotes from competing insurers and potentially become their customer instead. If a brand is concerned about these issues, it can take action in a number of ways. By refusing to purchase leads from companies that bid on their brand terms, carefully monitoring the paid search activity of the Lead Generation sites they work with, and restricting Partners or Franchisees ability to work with these companies, brands can ensure that these sites are truly adding value. 22

25 Internet & Telecom About These Brands This category includes the 10 most popular brands in the Internet & Telecom industry, including internet service providers, wireless service carriers, and cable and satellite television providers. The designation of most popular is based on monthly search volume in the United States, according to data from Google AdWords. Figure I The number of ads per Search Engine Results Page placed by different types of advertisers, averaged across all brands in the Internet & Telecom category. 23

26 High Rates of Trademark Usage Across All Engines, Google Mobile Highest in Study Of all the industries included in this study, Internet & Telecom had the second-highest overall usage of brand terms by other advertisers, trailing only Consumer Electronics. The category also had the highest rate of trademark usage on Google Mobile, with 0.43 Non-Brand Ads per SERP. Notably, the brands in this category often rely on Partners (also known as dealers and sometimes resellers, though these are still categorized as Partners in this study) to enact the sale Partners, Search Arbitrage Dominate The heavy reliance on Partners by Internet & Telecom companies results in those Partners bidding openly and heavily on core brand terms. On both Google and Google Mobile, Partners accounted for 86-87% of the ads using these brands trademarks. This extremely high percentage reflects both the large number of ads placed by Partners as well as Google s general practice of minimizing the amount of Search Arbitrage in their results. On both Bing and Yahoo, for example, Partners also represented the highest percentage of non-brand ads, 32% and 30% respectively. Compared to Google, however, those percentages are much lower and were driven down by the presence of Search Arbitrage, which occupied somewhere between 42 and 49% of non-brand ads. It is likely that additional opportunities for arbitrage are created due to the highly distributed nature of Internet & Telecom sales. With both the national brand and the Partner buying ads, the potential profit in Search Arbitrage is quite high. Takeaway for Brands As discussed in the section on Consumer Finance, Search Arbitrage is often in violation of search engines terms of service and ads can be removed upon the filing of a trademark complaint. The Partner question is somewhat more complicated, as working with Partners is a key part of many Internet & Telecom companies sales strategy. This issue has been discussed at some length on the BrandVerity Blog, in When Is It Okay for Resellers to Bid on Your Brand? and DirecTV s NFL Sunday Ticket & Paid Search: Should Partners Be Bidding?. In general, the best course of action is to closely monitor Partners search marketing and to have clear agreements governing the brand terms on which Partners are allowed to bid. These steps minimize potential customer confusion or brand dilution while retaining the value of working with Partners. 24

27 Online Retail About These Brands The Online Retail category is based on the 100 top brands represented in Internet Retailer s Top 500 Guide from Some exclusions have been made for brands whose brand names are relatively generic and led to significant false positives. Figure J The number of ads per Search Engine Results Page placed by different types of advertisers, averaged across all brands in the Online Retail category. 25

28 Relatively Low Levels of Trademark Usage Across All Engines Overall, this category had fairly low levels of trademark usage across all search engines. Although not the lowest on any given search engine, its Non-Brand Ads per SERP were below average for all five engines monitored. The largest number was on Yahoo, coming in at 2.08, and the lowest on Google Mobile, at an infinitesimal The low levels of trademark usage are likely linked to the fact that many of these brands are self-contained entities. Many only sell directly to consumers and thereby cut down on the sheer number of other advertisers interested in bidding on their terms. Resellers & Comparison Shopping Engines Dominate; Affiliate Direct Linking Makes an Appearance The fact that many of these companies act primarily as retailers reduces the overall incidence of non-brand trademark usage in this category. That said, the IR 100 also includes manufacturer brands that work with Resellers. In addition, about half of these brands have an online affiliate program. As a result, the non-brand ads that do appear closely resemble the results found in Clothing & Apparel. The highest percentage of Non-Brand Ads per SERP came from Resellers: 26% on AOL, 25% on Bing, 48% on Google, 45% on Google Mobile, and 20% on Yahoo. Comparison Shopping Engines were close behind on AOL, Bing, and Yahoo, commanding approximately a quarter of the Ads per SERP. Additionally, while the amount of affiliate activity appears low (or is not noticeable in much of the chart), it is present. More importantly, much of that affiliate activity is from Direct Linking, a practice that is often done without the brand s authorization and can result in the brand paying out unearned commissions. While it s unclear how much of the Direct Linking is unauthorized here (if any), it s worth noting. Brands would be well served to keep a close eye on how their affiliates are bidding on their brand terms in paid search. 9 Takeaway for Brands Although the overall numbers were low in this category, there was still, on average, at least one Non-Brand Ad per SERP on AOL, Bing, and Yahoo. For brands that want to increase their online sales, especially brands that are both retailers and manufacturers, reducing that number could greatly help. It would also help decrease the Cost-per-Click (CPC) on the brand s paid search account. Re-working agreements with Resellers and CSEs as well as careful monitoring of affiliates could bring the trademark usage in this already fairly clean industry down to a truly negligible level. 9 More information on managing Affiliates is available in BrandVerity s Guide to Affiliate Compliance. 26

29 Software, Web & Technology About These Brands This category includes 21 of the 25 most popular brands 10 in the Software & Technology industry, including popular social networking sites, web services, software programs, and others. The designation of most popular is based on monthly search volume in the United States, according to data from Google AdWords. Figure K The number of ads per Search Engine Results Page placed by different types of advertisers, averaged across all brands in the Software, Web & Technology category. 10 Several brands were removed from the study, since their brand names were relatively generic and led to significant false positives. 27

30 Lowest Level of Trademark Usage on Yahoo, Very Low on Bing Levels of non-brand trademark usage were fairly low across all five search engines in the Software & Technology category. Specifically, the average number of Non-Brand Ads per SERP on Bing and Yahoo were among the lowest of the whole study, with Bing at 0.59 and Yahoo at The Yahoo average was the lowest across all categories. Given that Bing and Yahoo both use the Yahoo Bing Network for their paid search results, the particularly low levels of trademark infringement in this category raise the question of whether this industry is treated differently than others within that search network. Although non-brand ads were uncommon, there were also very few ads placed by the brands themselves. The number of Brand Ads per SERP hovered around 0.20 to 0.30 on the various search engines, which is far lower than in any other category (most coming in at nearly 1 Ad per SERP). The result is that despite low numbers of Non-Brand Ads per SERP, those ads generally outnumbered the brands own ads. Non-brand ads significantly outnumbered brand ads on AOL, Bing, and Yahoo accounting for 90.0%, 67.8% and 78.6% of all trademark-using ads. Even on Google and Google Mobile, non-brand ads accounted for 48.8% and 38.1% of ads, respectively. Download and Toolbar Sites Dominate SERPs Download and Toolbar sites overpoweringly dominated the non-brand results on every search engine in this industry. The lowest percentage of Download & Toolbar sites appeared on Yahoo, which hovered around 62% of non-brand ads. The highest appeared on Google Mobile, at 89%. In no other category in this study does a single class of non-brand advertiser so completely overwhelm the search results on every search engine. Download and Toolbar sites usually target Software & Technology brands by bundling free versions of software with other products often toolbars, sometimes malware or adware. These sites are usually paid on a per-install basis for the additional software downloaded through their install wizard. By bidding on and advertising with popular Software & Technology brand terms (which are often free to download), these sites increase their odds of having that supplemental, unwanted software installed by users. Furthermore, there s no guarantee that the download will even include the software that the user searched for. This topic is discussed at more length in several posts on the BrandVerity Blog, including Software Bundlers Target Firefox Is This Trademark Abuse? and Advertisers Brand Bidding on Social Media Sites Logins. 28

31 Takeaway for Brands Download and Toolbar sites should be a big concern for Software & Tech companies. They often dilute brand image, offering a negative experience for users both on the site itself and in the aftermath of dealing with undesired software. They also drive traffic away from the brand s own site. Fortunately, brands can take action in a couple of ways. Depending on the circumstances, they may be able to curb these ads by submitting a trademark complaint to the search engines, or in cases where the software bundling goes against the brand s terms of distribution, by dealing directly with the advertiser (for example, through a cease and desist). 29