The State of Branded Keywords in Paid Search Q4 2014

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1 The State of Branded Keywords in Paid Search Q

2 The State of Branded Keywords in Paid Search Q Table of Contents Study Summary...3 Guide to Ads...4 General Findings...5 Clothing & Apparel...7 Consumer Electronics...9 Consumer Finance Education Home Services Hotels Insurance Internet & Telecom Online Retail Software, Web, and Technology Holiday Shopping Supplement Appendix Methodology Terminology

3 The State of Branded Keywords in Paid Search Q Study Summary This study evaluates the paid search landscape on the core branded keywords of over 250 popular, consumerfacing brands from 10 different industry categories. BrandVerity monitored these core brand terms during Q4 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 and how much traffic brands may be losing because of it. 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 third-party advertiser, brands can submit trademark complaints to the search engines and have these ads removed entirely. New in Q4: Ads without Trademark Usage In the previous iteration of this study from Q3 of 2014, we exclusively focused on two types of ads: A) ads placed by the brands themselves on their own branded keywords, and B) ads placed by competing advertisers on branded keywords who also used a given brand s trademark in their ad copy. For the Q4 version, we re now providing a comprehensive view of all ads that we found. We ve added a third type of ads to the mix: ads placed by competing advertisers that did not use these brands trademarks in their ad copy. With this addition, all possible ad types are now included in the charts in some way. This new group is included in the segment at the top of each chart and labeled with No Trademark. Unlike the ads that use the brands trademarks, these are not subdivided into different classes of advertisers (Reseller, Search Arbitrager, Partner, etc.) within the individual category charts. The ads using trademarks are divided into these advertiser classes (Reseller, Search Arbitrager, Partner, etc.) because they are generally more actionable for brands. Trademark usage provides a strong signal that a given advertiser actually has a relationship with the 3

4 The State of Branded Keywords in Paid Search Q 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 ) Trademark Usage an ad placed on a brand s keyword 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 3 - Ad includes the trademark of the searched-for brand in its ad copy, and was not placed by the brand itself. This would count as a Trademark Usage ad. No Trademark an ad placed on a brand s keyword by another advertiser (i.e. an advertiser who is not the brand) that DOES NOT include the brand s trademark in its ad copy Figure 2 - Ad DOES NOT include the trademark of the searched-for brand in its ad copy, and was not placed by the brand itself. This would count as a No Trademark ad. 4

5 General Findings Ads/SERP All Categories, Averaged Figure A Ads placed by the brands themselves (bottom segment) compared to ads placed by competing advertisers who used those brands trademarks (middle segment) and competing advertisers who did not use those brands trademarks (top segment). Key No Trademark Trademark Usage Brand AOL Bing Google Google Mobile Yahoo Brands Losing Tens of Thousands of Visitors per Month, on Average This version of the Branded Keywords report now includes estimates of traffic lost for brands in each category. These estimates are based on the levels of brand bidding in each category, typical clickthrough rates (CTR) on paid search ads, and a benchmark assumption of 1,000,000 monthly queries on core brand terms for a typical brand. While in practice this last figure varies greatly from brand to brand, it provides a baseline by which a brand can estimate its traffic lost per month. For reference, the median across all brands in this study for monthly branded queries (on exact matches of these core brand terms) is 750,500 making this a reasonable approximation. Even when anchoring with 1,000,000 monthly queries, the expected traffic loss varies several-fold between different industries. On the low end, in the Consumer Finance industry the expected traffic loss for a typical brand is 13,208 clicks per month. Home Services, by comparison, is more than four times higher at 64,091 clicks lost per month. For extremely popular brands that consumers search for more frequently than 1,000,000 times per month, the lost traffic can quickly become much higher than that. Furthermore, trademark bidding tends to be more common on longer tail trademark-plus terms (e.g. [Brand Name] coupons ) than on core brand terms. Since this study focuses only on core brand terms, the typical brand may experience even higher rates of traffic loss on its whole set of branded keywords. Regardless of scale or industry, though, these figures should be concerning for brands, who typically look to accrue as much traffic as possible on their branded keywords sometimes even assuming that branded traffic will always go directly to their own sites. 5

6 General Findings Wide Variance in Ads with No Trademark While all categories show at least some presence of ads with No Trademark, the levels varied quite dramatically in different industries. For example, in the Consumer Electronics category there were 1.37 Ads No Trademark Ads per SERP on AOL (with rather low figures on the other engines) compared to 6.56 Ads per SERP on AOL in the Education category (with relatively high figures on the other engines, including 1.09 Ads per SERP on Google). In many cases, these ads are from direct competitors to the brands in a given category. For example, in the Insurance category, competing auto insurance providers often advertise on branded searches for other auto insurance providers. More of this will be covered in the sections pertaining to specific categories, but broadly it is interesting to note that the categories exhibiting high levels of No Trademark advertising are some of the most highly competitive in paid search (Insurance, Education, Consumer Finance) and include some of the biggest spenders. Holiday Shopping Leads to Increased Brand Bidding Is brand bidding more likely to occur during certain times of year? After examining the levels of brand bidding over time in a couple of categories, this seems to be confirmed. Two of the three categories we selected showed increasing levels of Trademark Usage appearing on their branded keywords during the course of November through December. One industry in particular experienced roughly a doubling of Trademark Usage after Black Friday. For detailed charts of the holiday shopping period, see the special supplementary section on page 27. 6

7 Clothing & Apparel About These Brands This category includes 25 of the most popular brands that produce clothing, apparel, accessories and similar items. The designation most popular is based on monthly search volume in the United States, according to data from Google AdWords. Category Statistics: Clothing & Apparel Advertiser Breakdown Clothing & Apparel 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. 6 Ads/SERP Key No Trademark Other Reseller CSE Search Arbitrager Affiliate Brand AOL Bing Google Google Mobile Yahoo Expected Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 36,200 For a typical brand with 1,000,000 monthly branded searches. 1. nordstrom.com 2. amazon.com 3. macys.com 4. zappos.com 5. stuccu.com 6. target.com 7. outletlocation.com 8. 6pm.com 9. shop411.com 10. dillards.com 7

8 Clothing & Apparel Increase in Comparison Shopping Engines and Resellers on Google In comparison to the data collected for BrandVerity s Q3 Report on Branded Keywords, Q4 saw a decided increase in Trademark Usage by CSEs and Resellers especially on Google. On average, Resellers placed 0.58 Ads per SERP on Google, and Comparison Shopping Engines (CSEs) placed 0.37 Ads per SERP both significantly higher than last quarter s figures of 0.19 and 0.04, respectively. This jump is likely due to an increase in holiday advertising spend by retailers, coupled with sales and promotions to move endof-year inventory. We would expect to see these numbers drop somewhat in Q1 due to these seasonal fluctuations, and will be tracking this closely as we prepare our next report. For a more detailed analysis of the impact of holiday shopping on Trademark Usage by advertisers, see our supplement at the end of this report on page 27. Major Retail Chains Are the Most Common Trademark Users merchants. Clothing & Apparel brands choose to work with these Resellers in large part because they are very good at what they do: advertising, targeting, and selling clothing online. Working with these companies helps brands earn exposure, gain new customers, and move inventory. That said, if a brand also has its own e-commerce site, it may want to be strategic in deciding on which brand terms its Resellers are allowed to bid and which they are allowed to use in ad copy. This issue is discussed at some length in BrandVerity s Reseller Questions Blog Series. Takeaway for Brands The impact of Resellers on paid search results especially on Google, where Resellers held a rather high share of voice should be the major takeaway for brands in this category. Many brands work with these retailers exactly because they are the best in the business at driving traffic, promoting products, and making sales. That said, if a brand is interested in increasing its direct online sales, it might want to consider studying these Resellers tactics and possibly reconsidering its agreements with retail partners and CSEs. The dominance of Resellers on the SERP is clearly related to the symbiotic relationship between Clothing & Apparel brands and the retailers that carry their products. Of the Top 10 Trademark Users appearing on brand terms in the Clothing & Apparel category, three are national department store chains (Nordstrom, Macy s, and Dillard s); one is a wellregarded designer outlet retailer (6pm); and two are subsidiaries of the largest online retailer in the world (Amazon.com and Zappos). These 10 advertisers are companies that, for the most part, make it their business to be the best at online marketing and e-commerce. Five of these advertisers (Amazon.com/Zappos, Macy s, Target, and Nordstrom) are in Internet Retailer s top 25 e-commerce 8

9 Consumer Electronics About These Brands This category includes 25 of the 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. Category Statistics: Consumer Electronics Ads/SERP Advertiser Breakdown Consumer Electronics 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. Key No Trademark Other Reseller Downloads/Toolbar CSE Search Arbitrager Brand AOL Bing Google Google Mobile Yahoo Expected Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 38,662 For a typical brand with 1,000,000 monthly branded searches. 1. amazon.com 2. target.com 3. walmart.com 4. bestbuy.com 5. qvc.com 6. stuccu.com 7. factoryoutletstore.com 8. nextag.com 9. calibex.com 10. driverwizard.org 9

10 Consumer Electronics Holiday Shopping Drives Increased Trademark Usage In Q4, Consumer Electronics continued to be, overall, the industry targeted with the most Trademark Usage. The majority of these advertisers were Resellers, an advertiser type whose presence increased substantially in Q4, especially on Google. On Google, the Trademark Usage from Resellers increased from 0.30 Ads per SERP in Q3 to 0.56 in Q4, or nearly doubled. AOL saw a less dramatic increase, with Reseller activity jumping from 2.30 Ads per SERP to These Reseller increases are likely the result of the increased targeting of consumers around the holidays especially for expensive consumer products. For a more detailed analysis of the impact of holiday shopping on trademark usage by advertisers, see our supplement at the end of this report on page 27. Top Advertisers Include Major Consumer Electronics Retailers Similar to the Clothing & Apparel category, Resellers and CSEs were the top advertisers in this category. Of the Top 10 Trademark Users in the category, five were major retailers with a focus on discounted consumer electronics (Amazon, Target, Walmart, BestBuy, and QVC), three were CSEs (Stuccu, Nextag, and Calibex); one was an outlet (Factory Outlet Store); and one was a download site. This breakdown mirrors that of Clothing & Apparel in its weightedness toward major national and international retailers, who are, quite simply, the best-in-class at e-commerce and online marketing. Amazon, Target, Walmart, BestBuy, and QVC, which make up the top five advertisers in our list, are all in Internet Retailer s Top 20 e-commerce merchants. Of those, four are in Internet Retailer s Top 15 for Paid Search Spend, meaning they spent upward of $1.5 million per month on paid search advertising in This kind of advertising sale and reach, along with the ability to move product, is precisely why many Consumer Electronics companies choose to work with Resellers. Even so, if a Consumer Electronics brand decides it wants to increase direct sales, it may want to reevaluate its agreements with retail partners. This issue is discussed at some length in BrandVerity s Reseller Questions Blog Series. Takeaway for Brands This data suggests that major online retailers do a very good job at promoting the brands they sell in +paid search. Companies like Amazon, Target, and Walmart, with large advertising budgets and even larger inventories, have been able to develop strategies and techniques that allow them to control a major share of voice in online advertising and specifically in paid search. This can be a real benefit for the brands that work with these retailers, granting them access to the advertising power of these retailers. On the other hand, our data suggests that for a Consumer Electronics brand with 1,000,000 monthly branded searches, around 38,662 clicks will be lost to other advertisers each month whether it s a Reseller, a CSE, or a competitor. For brands with an interest in increasing direct sales, looking to these advertisers tactics, as well as renegotiating the terms of their Reseller contracts, might help drive more traffic to their own sales channels. 1. Internet Retailer 2014 Top 500 Guide 10

11 Consumer Finance About These Brands This category includes 25 of the most popular brands in the consumer finance industry including banks, credit card issuers, investment firms, and similar brands 2. The designation of most popular is based on monthly search volume in the United States, according to data from Google AdWords. Category Statistics: Consumer Finance Ads/SERP Advertiser Breakdown Consumer Finance 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. Key No Trademark Other Search Arbitrager Affiliate Brand 0 AOL Bing Google Google Mobile Yahoo Expected Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 13,208 For a typical brand with 1,000,000 monthly branded searches. 1. local.com 2. ask.com 3. newcheckingfacts.net 4. about.com 5. onlinebankersolutions.com 6. banktruth.org 7. flashratings.com 8. myonlinebankingchoice.com 9. buyerpricer.com 10. tcunet.com 2. 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. 11

12 Consumer Finance AOL Targeted by Competitors, Affiliates Make an Appearance on Yahoo Consumer Finance is an industry in which, perhaps due to its tight regulation, there is minimal Trademark Usage on Bing, Google, and Google Mobile. There is, however, a fairly large amount of competitive bidding across all engines, and in particular on AOL. AOL had a rate of 2.65 No Trademark Ads per SERP. These kinds of ads were also fairly high on Yahoo, where they accounted for 1.04 Ads per SERP. Of these advertisers, the vast majority, and the most frequent, are direct competitors to the brand. Another notable change from Q3 to Q4 is the presence of Affiliate advertising on Yahoo. Whereas Q3 showed no Affiliate presence, there is a significant segment of Affiliate Trademark Usage on Yahoo. While it is unsurprising to see new advertisers coming into the fold on Yahoo (which showed the highest levels of Trademark Usage for this category in Q3 and Q4), it will be interesting to see whether this Affiliate advertising carries over to Bing and other search engines. Many credit card issuers now have affiliate programs, and affiliates may start seeking more traffic from search engine advertising. Search Arbitrage Takes Many Forms and Increases Marketing Costs For Consumer Finance brands, the most prevalent Trademark Usage came from Search Arbitragers. Because Consumer Finance brands often pay some of the highest cost-per-click (CPC) in paid search, they are an easy target for Search Arbitrage. This pattern can be seen in the list of Top 10 Trademark Users, where the top six advertisers are all performing some form of Search Arbitrage. While sites like local.com and ask.com are what we might term standard Search Arbitragers, which present themselves as search engines with pre-filled searches so as to trigger new pages of ads, sites like onlinebankersolutions. com and myonlinebankingchoice.com are a little bit trickier to understand. If a user were to navigate to these pages directly, they would appear to be publisher sites, perhaps with some combination of blurbs about different financial services companies pulled from around the Internet, reviews of various financial services, or advice regarding maintaining one s financial health. If navigated to via a search ad, however, they would (like standard Search Arbitragers) present the user with a page of PPC ads, driving up a brand s CPC while decreasing its Clickthrough-Rate (CTR). This issue is covered in more detail in this post on the BrandVerity blog. Takeaway for Brands Two major takeaways for brands appear out of this data set. First, brands in the Consumer Finance sector need to reach better competitive bidding agreements with their direct competitors. The incredibly high rate of competitive bidding that occurs in this industry drives up CPC, decreases CTR, and typically isn t a great way to earn loyal, new clients. Other industries have managed to reach good agreements on this issue, so Consumer Finance brands should be able to follow suit and come to such agreements. Second, while Search Arbitrage is highly disruptive to a brand s digital marketing efforts, the good news is that brands can have these ads removed. Search Arbitragers that use a brand s trademark are in violation of the search engines trademark policies as the pages neither provide valuable information about the brand, nor make the brand or product the central focus of the landing page. Brands can submit trademark complaints to the relevant search engines to take action against these ads. 12

13 Education About These Brands This category includes 10 of the most popular brands 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. Category Statistics: Education Advertiser Breakdown Education 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. 6 Ads/SERP Key No Trademark Other Lead Gen Search Arbitrager Brand 0 AOL Bing Google Google Mobile Yahoo Expected Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 39,311 For a typical brand with 1,000,000 monthly branded searches. 1. local.com 2. indeed.com 3. ask.com 4. about.com 5. earncollegedegreenow.com 6. buyerpricer.com 7. rn-bsn.com 8. neweducationcourses.com 9. universities.com 10. openlearning.com 13

14 Education On Google, Competitors Ads Outnumber Ads Placed by the Brands Themselves In the Education industry, Trademark Usage was not very high. That does not, however, mean that competing advertisers were not bidding on brand terms or that those advertisers are harmless to the brand. On Google alone, the number of No Trademark ads was nearly equal to the number of ads placed by the brands themselves. The advertisers behind these ads were overwhelmingly other Education brands. That means for every ad the user sees for a brand, it sees one for that brand s closest competitor. And, per our calculations, an Education brand with 1,000,000 monthly branded searches will lose about 39,311 clicks per month to trademark bidders many of them to direct competitors. bidding agreements with their direct competitors. The high rate of competitive bidding in this industry does little to help any of the representative brands and does much to increase CPC, decrease CTR, and create friction for the consumer. It is possible to reach reasonable agreements with competitors and it would likely be worth it for these brands to do so. Second, while it does seem that some action has been taken regarding the incidence of Search Arbitrage on the Yahoo Bing Network in the past six months, more can still be done. These brands should be submitting trademark complaints to the search engines when they find Search Arbitragers using their trademarks, as they are in violation of the search engines policies. Search Arbitrage Decreases Since Q3 In good news for Education brands, the amount of Search Arbitrage on Bing and Yahoo has significantly decreased since Q3. Bing shows an especially dramatic drop, from 1.14 Ads per SERP with Trademark Usage in Q3 to 0.34 in Q4. Although the reason for this is not entirely clear, it may be attributable to changes at Bing and Yahoo. Other industries experienced reductions in Search Arbitrage on Bing and Yahoo, including Clothing & Apparel, Consumer Finance, Home Services and Hotels. Furthermore, given that four of the top five advertisers on our list of Top 10 Trademark Users are Search Arbitragers, it doesn t seem like arbitrage has suddenly become unprofitable. Takeaway for Brands The takeaways for Education brands mirror those for Consumer Finance brands. First, it would behoove these companies to consider entering into competitive 14

15 Home Services About These Brands This category includes 10 of the most popular brands 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. Category Statistics: Home Services Advertiser Breakdown Home Services 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. 6 Ads/SERP Key No Trademark Other Partner Lead Gen Franchisee Search Arbitrager Brand AOL Bing Google Google Mobile Yahoo Expected Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 64,091 For a typical brand with 1,000,000 monthly branded searches. 1. local.com 2. buyerpricer.com 3. pestremovalzone.com 4. pronto.com 5. thestreet.com 6. ask.com 7. coldwellbankerhomerealty.com 8. about.com 9. homelistingsfinder.com 10. amazon.com 15

16 Home Services Lead Gen Sites, Franchisees and Partners Drop Off Trademark Usage by Lead Generation sites, Franchisees and Partners dropped significantly in Q4. While these three advertisers contributed the most Trademark Usage on Google and Google Mobile in Q3, this quarter those numbers became negligible to the point where they don t appear in the Google and Google Mobile columns in the chart (they do, however, still appear to a minimal degree on Bing and Yahoo). We had suspected that the high incidence of Lead Generation sites on Google Mobile were Pay-Per-Call Lead Generation sites, so it is also possible that this change reflects a shift in either how brands are working with these advertisers or in how Google is treating them on mobile. Competitor Bidding Extremely High While Lead Gen sites, Franchisees and Partners dropped off, the Home Services industry experienced the highest levels of No Trademark advertising on Google of any category, at 2.22 Ads per SERP. In fact, across all search engines, the amount of trademark bidding without Trademark Usage was high. Furthermore, an examination of the top advertisers behind these No Trademark ads (not listed here) shows that these were largely direct competitors of the brands in the category. Nine of the top 10 No Trademark advertisers were brands that directly compete with brands in this category. Takeaway for Brands Last quarter, we advised brands in the Home Services industry to reconsider and renegotiate their terms with their Franchisees and Partners, as well as to think carefully about the impact of Lead Generation sites on their brand s image. Based on this quarter s data, some of those steps seem to have been taken. We ll see after Q1 of 2015 if this dramatic switch is a seasonal fluctuation or in fact a sea change in the industry. These brands still need to think about how they are structuring bidding agreements, this time with direct competitors rather than with Partners. Even with the decrease in Lead Gen, Partner and Franchisee bidding, the high incidence of competitive bidding in this industry will drive up marketing costs and reduce direct traffic to these brands sites. Reaching agreements with these competitors could result in substantial mutual benefit. These kinds of ads vastly outnumbered the ads placed by the brands themselves. This competitive advertising contributes to the highest amount of expected traffic loss in the study, where we project a typical brand to lose 64,091 clicks per month (many of those to direct competitors). 16

17 Hotels About These Brands This category includes 25 of the most popular Hotel brands. The designation of most popular is based on monthly search volume in the United States, according to data from Google AdWords. Category Statistics: Hotels Advertiser Breakdown Hotels 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 Ads/SERP Key No Trademark Other OTA Franchisee Search Arbitrager Affiliate Brand AOL Bing Google Google Mobile Yahoo Expected Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 31,653 For a typical brand with 1,000,000 monthly branded searches. 1. hotelreservations.com 2. hotelroom.com 3. hotelsavings.com 4. priceline.com 5. roomstays.com 6. orbitz.com 7. onetime.com 8. local.com 9. hotelsbycity.com 10. offers.com 17

18 Hotels OTA Activity Up on AOL, Bing, and Yahoo In the Q3 Report, we noted that Hotel brands experienced fairly low levels of Trademark Usage on Google and Google Mobile (0.1 Ads per SERP), in contrast to AOL, Bing, and Yahoo, who all hovered between 2 and 3 Ads per SERP with Trademark Usage. Those numbers have remained fairly consistent moving into Q4, with Google, AOL, Bing, and Yahoo all seeing small rises in their levels of Trademark Usage. Google Mobile, on the other hand, dropped to only 0.02 Ads per SERP with Trademark Usage. These increases are likely due to a small uptick in Online Travel Agency (OTA) activity during the holiday season, at least on AOL, Bing, and Yahoo. The number of OTA Ads per SERP jumped from 1.29 to 2.16 on AOL, 1.66 to 2.20 on Bing, and 1.58 to 2.06 on Yahoo. Additionally, OTAs comprise the majority of the Top 10 Trademark Users. They are also the most common advertiser in the No Trademark section at the top of each column, meaning there is more OTA advertising than is directly pictured in the chart (only advertisers with Trademark Usage are categorized into types such as OTA, Search Arbitrager, etc). The February 2015 acquisition of Orbitz by Expedia thus raises the question of whether Q will see Orbitz dropped from the list of Top 10 Trademark Users. As these OTAs become increasingly unified, it will be interesting to see how their advertising tactics continue to align and how that impacts the ability for Hotel brands to enact partner bidding contracts. Takeaway for Brands For Hotel brands, OTAs continue to be the central issue. While OTA trademark bidding has almost entirely disappeared from Google and Google Mobile, it is still very present on AOL, Bing, and Yahoo. Further, OTAs make up a huge number of the No Trademark ads in the category. Hotel brands have done a good job of monitoring their brands on Google, but now they need to do the same on other search engines while also continuing to nuance their contracts with OTAs. Methods for effectively working with and monitoring OTAs can be found in BrandVerity s Report on OTA Brand Bidding. Expedia Acquisitions May Change Paid Search Landscape Represented within the list of Top 10 Trademark Users are two of the top four national OTAs: Priceline and Orbitz. Expedia and Travelocity, which do not appear in this top group, have been partnered since 2013 and officially merged in January 2015, when Expedia purchased Travelocity. Their mutual exclusion from this group of advertisers aggressively using trademarks in their ad copy (as well as from the No Trademark group at the top of the chart) suggests that their policies and agreements with Hotel brands may well be different than Priceline and Orbitz s. 18

19 Insurance About These Brands This category includes 25 of the most popular brands 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. Category Statistics: Insurance Advertiser Breakdown Insurance 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. 6 Ads/SERP Key No Trademark Other Lead Gen Search Arbitrager Brand 0 AOL Bing Google Google Mobile Yahoo Expected Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 44,874 For a typical brand with 1,000,000 monthly branded searches. 1. carinsurancehunt.com 2. insurancestep.com 3. about.com 4. local.com 5. ask.com 6. uninsuranceonline.com 7. autoinsurancequotes.com 8. free-insurance-quotes.us 9. insure.com 10. quotes2compare.com 19

20 Insurance Lead Generation Sites Dominate Top 10 Trademark Users Similar to Q3, Lead Generation sites had a significant presence on all engines during Q4. Once again, they were the only advertiser with significant Trademark Usage on Google and Google Mobile. Further, they also represented the vast majority of advertisers in the Top 10 Trademark Users. Seven of the 10 advertisers on this list were Lead Generation sites, who typically prompt visitors to enter zip codes on their landing pages and offer free quotes in return. However, these landing pages often fail to prominently feature the brand that the advertiser promotes in its ad copy (as discussed in the Lead Gen series on the BrandVerity blog). Ads Without These Brands Trademarks Are Common and Also Typically Placed by Lead Generation Sites Takeaway for Brands Lead Generation sites continue to have a large presence in this category both with Trademark Usage and No Trademark ads resulting in increased customer acquisition costs and the potential loss of customers to competitors. The good news is that many of the issues facing Insurance brands are actionable. Insurance brands can refuse to purchase leads from companies that bid on their brand terms, carefully monitor the paid search activity of the publishers they work with, and restrict their Partners or Franchisees ability to work with these companies. They can also ask search engines to take down Search Arbitrage that uses their trademark. These steps should go a long way toward decreasing these competing advertisers SERP coverage and increasing Insurance brands presence on their branded keyword searches. The presence of No Trademark ads is also notable here. This is visible in the large segments at the top of each column in the chart. No Trademark ads are about as common as all other ads combined even when you include the ads placed by the brands themselves. No Trademark ads clearly outnumber the rest of the ads on AOL, accounting for 4.97 of the 7.45 total Ads per SERP. Who are the advertisers who aren t using these brands trademarks? Some additional examination shows that these also tend to be from Lead Generation sites. After looking into some of the most common advertisers in the No Trademark segment, seven of the 10 most common advertisers were Lead Generation sites. Out of that list, three (insurancestep.com, usinsuranceonline. com, carinsurancehunt.com) also appeared on the list of Top 10 Trademark Users. This may indicate that Lead Generation sites are willing to bid on brand names even when they don t have a relationship with the brand a searcher was trying to find. 20

21 Internet & Telecom About These Brands This category includes 10 of the 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. Category Statistics: Internet & Telecom Ads/SERP Advertiser Breakdown Internet & Telecom 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. Key No Trademark Other Reseller Partner Search Arbitrager Affiliate Brand AOL Bing Google Google Mobile Yahoo Expected Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 29,438 For a typical brand with 1,000,000 monthly branded searches. 1. local.com 2. get[brand]cable.com 3. [BRAND]deals.com 4. infinity[brand].com 5. bestbuy.com 6. phoneplans.us 7. [BRAND]quote.com 8. go[brand].com 9. [BRAND]deals.com 10. [BRAND]cablespecial.com 21

22 Internet & Telecom Retail and Affiliates Come into the Fold One interesting change from BrandVerity s Q3 report is the presence of a Reseller segment on AOL, Bing, and Yahoo. These segments are largely attributable to Best Buy, which comes in at #5 on our list of Top 10 Trademark Users in this category. Why might an electronics retailer place search ads on the branded keywords of Internet & Telecom providers? A review of Best Buy s ads shows that they primarily targeted keywords of mobile carriers, advertising phones that were compatible with that carrier s network. This is a perfectly legitimate way of advertising, according to Google and the other engines, but could present challenges for mobile carriers who may prefer to have phone shoppers come directly to their own websites. would seem to suggest it. It will be interesting to see whether these advertisers continue to show up in the Q iteration of this report. Takeaway for Brands If brands have restrictions on how their Partners are permitted to advertise, they may want to examine who is bidding on their branded keywords. Additionally, the levels of Search Arbitrage are rather significant here, resulting in increased paid search costs and reduced traffic for brands. These ads can be submitted to search engines and taken down, resulting in more traffic at a lower cost. In addition to Resellers, Affiliates were also new to this category in Q4, appearing on AOL, Bing and Yahoo. While these levels were rather low (the highest being 0.15 Ads per SERP on Bing), it will be interesting to see if this continues to rise. Partner Sites Dominate the Top 10 Trademark Users Of the top 10 sites using these brands trademarks, seven are marketing Partners of these brands. These Partners typically have websites devoted specifically to a particular brand (which is why their URLs have been modified to protect those brands anonymity). It is striking to see these Partners showing up with such regularity. While they are not even the most common type of advertiser in the category (Search Arbitragers are), they are the most common type of advertiser to show up in the top 10. This indicates that Partner advertising is concentrated to a relatively small set of frequently occurring advertisers. Whether these advertisers are permitted (or even encouraged) to advertise on branded keywords is unclear, although the presence of brands trademarks in their domains 22

23 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. Category Statistics: Online Retail Advertiser Breakdown Online Retail 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. 6 Ads/SERP Key No Trademark Other Reseller CSE Search Arbitrager Affiliate Brand AOL Bing Google Google Mobile Yahoo Expected Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 22,973 For a typical brand with 1,000,000 monthly branded searches. 1. amazon.com 2. outletlocation.com 3. macys.com 4. local.com 5. target.com 6. stuccu.com 7. guruaid.com 8. ask.com 9. about.com 10. officedepot.com 23

24 Online Retail Search Arbitrage Decreases While Search Arbitrage played a significant role in the Online Retail category during Q3, it became less important in Q4. After accounting for significant ad segments on AOL, Bing and Yahoo in Q3, during Q4 Search Arbitrage only appeared in small amounts on AOL and Yahoo. This is helpful for the brands in this category, as Search Arbitrage diverts clicks away from the retailers sites and drives up the cost of their paid search campaigns. and levels of trademark bidding. Some may want to renegotiate their terms with retail partners, others may want to issue a truce with their competitors to reduce competitive bidding on their brands terms, others still may need to rein in Affiliates that bid on brand terms (as seen on AOL and Yahoo). To get the best sense for how a marketer s brand is being targeted, it s always best to run some tests of one s own and see what s really out there. For marketers that work directly in paid search, running an Auction Insights Report in AdWords or Bing Ads can be rather insightful as well. Mixed Group Rounds Out the Top 10 Trademark Users While some categories had a single advertiser type dominate their list of Top 10 Trademark Users (see the Internet & Telecom section above), there was no such consistency in the Online Retail section. The top 10 includes Resellers (Amazon, Macy s, Office Depot and Target), Search Arbitragers (local.com, ask.com and about.com), a Comparison Shopping Engine, a tech support site, and a site that publishes information on outlet store locations. This mix demonstrates that the brands in this category don t all deal with common brand bidding issues. Some of the brands in this category are manufacturer brands that produce their own products, opening them up to advertising from their Resellers. Others are retailers that have a large physical footprint in addition to their online divisions, leading to ads about outlet locations. Yet another group makes technology products that occasionally run into issues and require support. Takeaway for Brands Depending on how they market themselves and what relationships they have with other parties, brands in this category can experience very different types 24

25 Software, Web, and Technology About These Brands This category includes 25 of the most popular brands in the Software, Web & 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. Category Statistics: Software, Web, and Technology Ads/SERP Advertiser Breakdown Software, Web, and Technology 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. Key No Trademark Other Downloads/Toolbar Search Arbitrager Brand 0 AOL Bing Google Google Mobile Yahoo Expected Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 17,394 For a typical brand with 1,000,000 monthly branded searches. 1. macsoftware.com 2. downloadape.org 3. yahoo.com 4. onfreedownload.com 5. downtoad.com 6. theappcenter.com 7. downloadzone.org 8. the-best-apps.org 9. downloadnet.org 10. downloadfast.co 25

26 Software, Web, and Technology Download & Toolbar Sites Dominate List of Top 10 Trademark Users Download & Toolbar sites remained a consistent presence in Q4, with very similar levels of trademark usage on all engines except for Google Mobile (which reduced to an almost entirely negligible sliver). It is surprising to see almost no Download & Toolbar sites appearing on Google Mobile, especially considering that many of the brands in this category have mobile apps. Knowing that mobile searchers may be looking for a specific brand s app, a Download or Toolbar site could certainly try to attract those users and prompt them to install a separate app. It appears that these sites are not employing such a tactic, and Download & Toolbar sites were still the dominant advertiser in the category nonetheless making up nine of the Top 10 trademark users in the entire category. More information on the behavior of Download & Toolbar sites in paid search can be found on the BrandVerity Blog, including Software Bundlers Target Firefox Is This Trademark Abuse? and Advertisers Brand Bidding on Social Media Sites Logins. Competitor Bidding Is Common in Online Dating Takeaway for Brands In general, Software, Web, and Technology brands have less to worry about than brands from many of the other industries in this study. Other advertisers don t tend to use their trademarks terribly often especially on Google and Google Mobile and these brands have the secondlowest predicted traffic loss: 13,208 clicks per month based on 1,000,000 monthly branded searches. That said, Download & Toolbar sites are still an issue, as is competitor bidding. Download & Toolbar sites are very negative for brand image, offering pervasively negative experiences for users. Brands may be able to minimize the impacts of these ads by submitting trademark complaints to the search engines or by interacting directly with the advertiser when the software bundling violates the brand s terms of distribution. On the competitor bidding side, dating sites may be able to curb their competitors from bidding on their brand terms by creating handshake agreements with their competitors. These agreements typically involve each member agreeing to no longer bid on the other s brand terms, and vice versa. Within the No Trademark segment, many of the most commonly occurring advertisers were dating sites. In fact, eight of the 10 most popular No Trademark advertisers (who are not listed here) were dating sites. So, why were they showing up so much? After examining what keywords these advertisers were showing up on, their ads are generally placed on competitors brand terms. Several popular dating sites are among the monitored brands in this category, and competing dating sites are clearly targeting their brand terms to try and win over users. 26

27 Holiday Shopping Supplement 2.5 Holiday Shopping Trademark Usage, Clothing & Apparel, Google Figure L Ads/SERP Black Friday The fluctuations in Trademark Usage in the Clothing & Apparel category during November and December. Results are from Google only, and horizontal lines have been added to demonstrate two averages: the first being before Black Friday and the second between Black Friday and Christmas Day. Key 0.5 Christmas Day Trademark Usage Average (Before) Average (After) 0 11/01/14 11/08/14 11/15/14 11/22/14 11/29/14 12/06/14 12/13/14 12/20/14 12/27/ Holiday Shopping Trademark Usage, Consumer Electronics, Google Figure M Ads/SERP Black Friday The fluctuations in Trademark Usage in the Consumer Electronics category during November and December. Results are from Google only, and horizontal lines have been added to demonstrate two averages: the first being before Black Friday and the second between Black Friday and Christmas Day Key Trademark Usage 0.5 Christmas Day Average (Before) Average (After) 0 11/08/14 11/01/14 11/22/14 11/15/14 12/06/14 11/29/14 12/20/14 12/13/14 12/27/14 27

28 Holiday Shopping Supplement Brand Bidding Increases During the Height of Holiday Shopping Within the Clothing & Apparel and Consumer Electronics categories, brand bidding showed a clear increase during the peak holiday shopping period. Both categories show spikes in the levels of Trademark Usage on Google starting right around Black Friday (November 28th). In particular, the Consumer Electronics category demonstrates a massive jump from 0.63 Ads per SERP to 1.50 Ads per SERP just a few short days later more than double the baseline figure. The Clothing & Apparel category shows less of a clear baseline level for comparison, but nonetheless reaches a new high in Ads per SERP right before Black Friday, continuing to rise after that. Both charts also show sustained high levels of Trademark Usage through most of December, with spikes on December 17th. After December 24th, Trademark Usage starts to creep back down. It is also interesting to look at the average daily Trademark Usage before and after the holiday shopping period (Black Friday through December 24th). In the Clothing & Apparel category, this rose from 0.93 to 1.23 Ads per SERP, a 32% increase (the chart shows this with two flat horizontal lines that represent these averages). In the Consumer Electronics category, this rose more dramatically from 0.63 to 1.13 Ads per SERP, a 79% increase. Compared to these two, the Online Retail section showed little to no change over the course of the holiday shopping period and thus is not pictured in the charts for this supplement. A Greater Rise in Trademark Usage for Consumer Electronics category clearly showed a larger rise relative to its baseline levels. One potential reason for this could be that electronics tend to be more attractive holiday items for retailers to promote. This is not to say that retailers don t want to sell clothing or apparel items, but rather that electronic devices and gadgets may be more attractive items for retailers to draw customers in. Alternatively, the Resellers that promote Consumer Electronics brands products may be more aggressive about their holiday paid search campaigns compared to their counterparts who promote Clothing & Apparel brands products. Vigilance During the Holiday Period Is Crucial Based on the increase in brand bidding during the holiday shopping period, it s clear that brands should be wary of Resellers and other partners changing their paid search campaigns. If brand bidding from these parties doubles, the traffic loss facing these brands should double as well. And considering that brands often receive a disproportionately high share of their branded searches during this period, the impact on traffic can be even more significant. Unfortunately, while the stakes are high with brand bidding, marketing and e-commerce teams are incredibly busy during this time period. It s difficult to add compliance processes to the mix. To prevent the friction and overhead of adding a new business process when there s such a time crunch, it may behoove these brands to trial a paid search monitoring tool prior to the start of their busy-season (before Black Friday), and carry such a trial through December. This would allow these brands to collect the data and then evaluate it later, providing insight without distracting from their busy December schedules. While both Clothing & Apparel and Consumer Electronics experienced significant rises in brand bidding during this period, the Consumer Electronics 28

29 Appendix The State of Branded Keywords in Paid Search, Q 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 Q4 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. About the Metrics BrandVerity 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 and 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 Trademark Usage from advertisers who 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 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 29

30 Appendix The State of Branded Keywords in Paid Search, Q 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 Trademark Usage that did not fit into one of the categories above In some cases, Trademark Usage that represented a negligible fraction of the advertising in a particular category were included in the Other segment. 30