The State of Branded Keywords in Paid Search Q1 2015

The State of Branded Keywords in Paid Search Q1 2015 www.brandverity.com

The State of Branded Keywords in Paid Search Q1 2015 Table of Contents Study Summary... 3 Guide to Ads... 4 General Findings... 5 Clothing & Apparel... 7 Consumer Electronics... 9 Consumer Finance...11 Education...13 Home Services...15 Hotels...17 Insurance...19 Internet & Telecom...21 Online Retail...23 Software, Web, and Technology...25 Appendix Methodology...27 Terminology...27 2

The State of Branded Keywords in Paid Search Q1 2015 Study Summary This study evaluates the paid search landscape on the core branded keywords of over 250 popular, consumer-facing brands from 10 different industry categories. BrandVerity monitored these core brand terms during Q1 of 2015 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. As the third iteration of this report, it also includes analysis of changes over the past nine-month period. 3

The State of Branded Keywords in Paid Search Q1 2015 Guide to the Ads Used in This 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 ) 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 1 - This ad was placed by the brand itself, so it would be counted as a Brand Ad. 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 3 - 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. Figure 2 - 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. 4

General Findings Ads/SERP 1 2 3 4 5 6 7 8 9 10 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 Bing Mobile Google Google Mobile Yahoo Brands Neglecting Bing Mobile Bing Mobile is a new addition to this iteration of the report, and we plan to include it going forward. Interestingly, although Google Mobile continued to show very little trademark bidding with only 0.16 Ads per Search Engine Results Page (SERP) with Trademark Usage, Bing Mobile returned nearly three times as much Trademark Usage at 0.42 Ads per SERP. This follows suit with the significant disparity in Trademark Usage on Bing compared to Google, where brands may be more conscious of other advertisers. However, one stark difference that jumps out is the lack of Brand Ads on Bing Mobile. Brands only placed their own ads at a rate of 0.58 Ads per SERP, the lowest figure on any search engine in the study. By comparison, the number of Brand Ads per SERP on Bing was the highest in the study, at 1.00. This suggests a significant gap in how brands are treating their mobile campaigns on Bing, as opposed to their desktop campaigns. AOL Cements Lead in Trademark Bidding In Q4, we saw AOL overtake Yahoo as the search engine with the most Trademark Usage. That trend continued in Q1, with AOL increasing the gap by showing 2.54 Trademark Using Ads per SERP to Yahoo s 2.22. AOL also continued to show the most Ads per SERP with No Trademark, allowing advertisers such as direct competitors to attract attention on these brand terms and divert traffic to their own sites. Ultimately, the typical branded SERP on AOL contains between 6 and 7 ads with only a fraction being placed by the brands themselves. 5

General Findings Trademark Bidding Tapers after the Holidays, Still Costs the Typical Brand Tens of Thousands of Visitors per Month After seeing trademark bidding rise dramatically towards the end of Q4 in industries such as Clothing & Apparel and Consumer Electronics, these levels have subsided and are approaching the figures from Q3 of 2014. Seasonality seems to explain most of the rise last quarter, although these figures have yet to decline to the benchmarks we published in Q3 of 2014. But despite the reduction of trademark bidding in those industries, brands are still losing very significant amounts of traffic on their brand terms. Even in the industry with the lowest levels of trademark bidding, Consumer Finance, the typical brand loses more than 13,000 visitors per month to trademark bidders. On the high end, the typical Home Services brand is losing nearly 63,000 visitors per month to trademark bidders. It s going to take a much steeper decline in trademark bidding to make those numbers more tolerable for brands. 6

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 Ads/SERP 1 2 3 4 5 6 7 8 9 10 Advertiser Breakdown Clothing & Apparel AOL Bing Bing Mobile Google Google Mobile Yahoo 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. Key No Trademark Other Reseller CSE Search Arbitrager Affiliate Brand Typical Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 30,642 For a brand with 1,000,000 monthly branded searches. 1. zappos.com 2. nordstrom.com 3. amazon.com 4. macys.com 5. outletlocation.com 6. shopstyle.com 7. findsimilar.com 8. stuccu.com 9. 6pm.com 10. journeys.com 7

Clothing & Apparel Decrease in Comparison Shopping Engines and Resellers on Google In BrandVerity s Q4 Report on Branded Keywords, we saw a sharp increase in the amount of Trademark Usage by Resellers and CSEs. This uptick was especially noticeable on Google, where Ads per SERP by Resellers and CSEs jumped from 0.19 and 0.04 to 0.58 and 0.37, respectively. We attributed this increase to seasonal fluctuations brought on by holiday shopping and thus expected to see these numbers drop again in Q1. Takeaway for Brands Even after holiday shopping died down, Clothing & Apparel brands continued to be targeted by CSEs and Resellers. For the most part, these are legitimate ads. Brands work with these retailers in order to further promote their products, drive traffic, and make sales. If, however, brands are interested in increasing their direct online sales, they might want to consider changing their agreements with Reseller and CSEs and work to better promote their own online marketplaces through paid search. We were correct in our assumption: average numbers of Ads per SERP did fall dramatically in Q1, but not all the way back down to Q3 2014 levels. In particular, the Reseller Ads per SERP in Q1 2015 were still nearly double that of Q3 2014. As we approach Q2, we ll see if these figures continue to return to those baseline levels. Major Retail Chains Remain the Most Common Trademark Users In the Clothing & Apparel category, Resellers continued to dominate the list of Top 10 Trademark Users during Q1. Seven of the 10 advertisers on the list are online retailers, demonstrating the close relationship that these brands tend to have with online merchants. Furthermore, the four top trademark users on the list (Zappos, Nordstorm, Amazon, and Macy s) were the exact same four that topped the list during Q4. This suggests that much of the trademark bidding on Clothing & Apparel brand terms is by trusted long-term partners, who provide a steady presence in search results. 8

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 1 2 3 4 5 6 7 8 9 10 Advertiser Breakdown Consumer Electronics AOL Bing Bing Mobile Google Google Mobile Yahoo 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 Typical Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 29,899 For a brand with 1,000,000 monthly branded searches. 1. amazon.com 2. walmart.com 3. stuccu.com 4. factoryoutletstore.com 5. target.com 6. device-driver.org 7. driverassist.com 8. driverwizard.org 9. bestbuy.com 10. justanswer.com 9

Consumer Electronics Decrease in Resellers and CSEs Using Brand Terms Just like in the Clothing & Apparel category, the Consumer Electronics category saw trademark bidding subside during Q1 compared to the levels observed during Q4 with much of the decrease being attributable to Resellers and CSEs. With the end of holiday shopping, Ads per SERP placed by Resellers on Google dropped to 0.44. This number, much as in Clothing & Apparel, is right between Q3 2014 s 0.30 and Q4 s 0.56 Ads per SERP. Across all search engines, ads seemed to settle back down to slightly higher than Q3, but substantially lower than Q4, suggesting that in addition to holiday shopping, other factors may be in play. It will be interesting to see if Q2 results in lower brand bidding or if bidding just generally increases over time. Takeaway for Brands While the decrease in Reseller and CSE ads may be encouraging for brands who are looking to sell direct, it s likely that this decrease is primarily seasonal. With trademark bidding by Resellers and CSEs likely to increase again during the holiday shopping season, this may prove to be a useful time for brands to test whether their percentage of direct sales increases when there s less competition on the SERP. Brands may also want to stay on the lookout for Driver Download sites targeting their brand terms. These sites may not actually provide OEM-approved drivers, and thus could expose customers to a poor brand experience such as unwanted bundled software or even malware. Driver Download Sites Crack into the Top 10 While driver download sites were only a minor factor in Q4, they accounted for three of the Top 10 Trademark Users during Q1. In Q4, only one driver site appeared on the list at (only managing to rank at #10), but the Q1 list includes driver download sites occupying positions #6-8. Furthermore, on Bing the presence of Download & Toolbar sites more than doubled since Q4. If these advertisers have been successful in monetizing the traffic they receive from such ads, their presence may increase during Q2 of this year. 10

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 1. 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 1 2 3 4 5 6 7 8 9 10 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 AOL Bing Bing Mobile Google Google Mobile Yahoo Typical Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 13,613 For a brand with 1,000,000 monthly branded searches. 1. local.com 2. ask.com 3. about.com 4. newcheckingfacts.net 5. strictlyinvesting.com 6. banking-plans.com 7. theeasyloansite.com 8. flashratings.com 9. banktruth.org 10. onlinebankersolutions.com 1 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

Consumer Finance Low-Levels of Trademark Usage in General, but Some Vulnerability in Mobile Search In general, other advertisers don t use Consumer Finance brands trademarks very often. This may be due to the tight regulations in the industry and the attendant close monitoring of brands online presences. On AOL, Bing, and Google, Consumer Finance had the lowest overall amount of Trademark Usage across all categories surveyed. Of course, that does leave Bing Mobile, Google Mobile, and Yahoo. While none of these had amounts of Trademark Usage even close to the highest study-wide, it does suggest that these brands are being targeted on mobile more than on desktop. Given that brands tend to keep a closer eye on desktop search, and the growing market share of mobile, Consumer Finance brands may be well-served to increase their monitoring of mobile search. Competitor Bidding and Search Arbitrage Still a Problem The other issue for Consumer Finance brands continues to be Search Arbitrage. Search Arbitrage represents the largest segment of Trademark Usage on Google, Bing, Bing Mobile and Yahoo. As with competitor bidding, Search Arbitrage has a negative effect on CPC and CTR and is especially expensive for Consumer Finance brands as they tend to pay some of the highest cost-per-click in the industry. On the list of the Top 10 Trademark Users, the first five are Search Arbitragers. Takeaway for Brands There is one major takeaway for Consumer Finance brands: they are paying too much for paid search. Except for on Google and Google Mobile, Search Arbitrage and competitor bidding combine to occupy upwards of half the SERP on each search engine. The overall impact of this is huge, but it s not unavoidable. Brands should work to reach better competitive bidding agreements with direct competitors and monitor paid search carefully in order to have Search Arbitrage ads removed. Taking these steps should result in a cleaner SERP with an increased CTR and significantly lower CPC. While Consumer Finance brands have less of a problem with their trademarks being used by other advertiser, that doesn t mean they don t still have some problems on the SERP. Ads with No Trademark, for one, are quite high, with roughly four times the number of No Trademark Ads as Brand Ads (2.65 Ads per SERP vs. 0.64 Ads per SERP) appearing on AOL. On Bing and Yahoo, we observed about one No Trademark Ad for every Brand Ad. These ads are typically placed by direct competitors, who try to divert traffic over to their own sites. This kind of competitive bidding drives up CPC, decreases CTR, and is generally negative for brand loyalty. 12

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 Ads/SERP 1 2 3 4 5 6 7 8 9 10 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. Key No Trademark Other Lead Gen Search Arbitrager Brand AOL Bing Bing Mobile Google Google Mobile Yahoo Typical Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 37,096 For a brand with 1,000,000 monthly branded searches. 1. local.com 2. earncollegedegreenow.com 3. indeed.com 4. ask.com 5. about.com 6. howmuchdowemake.com 7. patten.edu 8. openlearning.com 9. lionacdmy54z.com 10. universities.com 13

Education Trademark Usage Remains Low in Education Industry As in Q3 and Q4, Trademark Usage in the Education industry remains fairly low. On AOL, Bing, and Yahoo, Trademark Usage represent approximately 25% of all advertising, and on Google, Google Mobile, and Bing Mobile, they represent less than 10%. In Q4, we noted a sharp decrease in the number of Search Arbitragers targeting Education brands. While numbers went up slightly this quarter, there does seem to be long-term decrease in the quantity of Search Arbitrage appearing on these brand terms. Lead Generation sites also remained fairly steady between Q4 2014 and Q1 2015, hovering around 0.17 Ads per SERP on Bing and Yahoo, and lower still on the other engines. We ll be looking to see if these numbers increase in the lead-up to fall enrollment. Search Engines Treat Competitor Bidding Differently and losing SERP real estate to competitors drives up CPC cost and likely decreases enrollment numbers. Takeaway for Brands The biggest issue for Education brands is competitor bidding. Reputation and brand recognition is such an important part of any Education brand s marketing efforts, that losing valuable SERP space should be a major concern. These brands should do their best to reach reasonable agreements with competitors so as to minimize CPC, increase CTR and enrollment rates, and decrease friction for consumers. Education brands should also continue to monitor all search engines, as the amount of competitor bidding and Trademark Usage varies somewhat substantially from engine to engine. Although many brands are most concerned about Google, other search engines (and especially mobile search) do command significant amounts of traffic and contribute greatly to the estimated 37,096 lost visitors per month for a typical brand in the Education sector. In Q4 2014, ads with No Trademark in the Education industry were very high, with a one of these ads appearing for every Brand Ad. These ads are often placed by director competitors who try to siphon traffic away on branded searches. This competitive bidding remained high across the board in Q1, but some changes are worth noting. On Google, competitor ads dropped from 1.09 to 0.81 Ads per SERP, a decrease mirrored on AOL (6.56 to 5.51) and Google Mobile (0.94 to 0.83). As AOL is a Google search network partner, it is likely that these decreases are all related. Bing and Yahoo, on the other hand, saw increases in competitor bidding, from 1.49 to 2.59 and 2.53 to 3.01 Ads per SERP, respectively. This increase should be concerning to Education brands, as the space is crowded 14

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 exterminating, 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 Ads/SERP 1 2 3 4 5 6 7 8 9 10 Advertiser Breakdown Home Services AOL Bing Bing Mobile Google Google Mobile Yahoo 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. Key No Trademark Other Partner Lead Gen Franchisee Search Arbitrager Brand Typical Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 62,949 For a brand with 1,000,000 monthly branded searches. 1. pestremovalzone.com 2. local.com 3. pestexterminator.com 4. topagentsranked.com 5. realtynow.com 6. homelistingsfinder.com 7. about.com 8. ask.com 9. myrotorooter.com 10. thestreet.com 15

Home Services Lead Gen Sites, Franchisees and Partners Back at It Q4 2014 saw a surprising drop off in the number of Lead Generation sites, Franchisees, and Partners using brands trademarks in paid search. These ads appeared rarely enough that they did not show up at all on our graphs for Google and Google Mobile, and only in small quantities on the other engines. We theorized that changes to Google policies regarding Pay-Per-Call Lead Generation sites might have had a major impact across the industry. However, this does not in fact seem to be the case. While the numbers are still fairly small slivers on each graph, they were significant enough to appear on many of the charts representing a clear increase from last quarter. Franchisees represented the most meaningful rise, returning as many as 0.19 Ads per SERP on Yahoo. Given Home Services brands reliance on Franchises, Lead Generation Sites and Partners to handle marketing, this increase is not necessarily surprising. It will be interesting to see if last quarter s decrease was an anomaly or if there is a standard ebb and flow in this kind of behavior. Competitor Bidding Still Extremely High The Home Services industry continued to have the largest amount of No Trademark advertising (which is typically from director competitors) on Google of any industry surveyed, holding steady at 2.18 Ads per SERP. That number means that approximately 61% of all ads seen on these branded keywords are for director competitors of the brands in this category. In fact, except for on Bing Mobile, where these ads occupy about 42% of the SERP, competitor ads take up at least 50% of SERP real estate across our studied engines. This vastly outnumbers the quantity of brand ads that appear. On Google, about 0.70 Ads per SERP are run by the brand itself, or 20%. This kind of competitive bidding directly contributes to the 62,949 lost visitors per month for a typical Home Services brand. We can imagine that most of those lost clicks go straight to competitors websites. Takeaway for Brands We had hoped last quarter that brands had made strides in changing their agreements and terms with Franchisees, Partners, and Lead Generation sites. Unfortunately, it seems like the decrease in trademark bidding from these kinds of advertisers between Q3 and Q4 2014 was the result of a seasonal variation rather than an industry change. As the holidays ended and spring began to arrive, demand for Home Services likely increased especially for realtors, as the housing market tends to escalate in February and March. The importance of bidding agreements with both Franchisees and competitors has never been clearer for Home Services brands. While the delegation of marketing to local Partners and Franchises does vastly offset marketing costs for these brands, it also results in a lack of attention to paid search campaigns by the national corporations. Franchisees and Partners may outsource their paid marketing campaigns to Lead Generation sites or other marketers, creating several levels of distance between the national brands and the Trademark Usage. The resultant brand image issues, customer confusion, and pricing or discounting discrepancies may not be worth the lowered customer acquisition cost. 16

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 Ads/SERP 1 2 3 4 5 6 7 8 9 10 Advertiser Breakdown Hotels AOL Bing Bing Mobile Google Google Mobile Yahoo 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. Key No Trademark Other OTA Franchisee Search Arbitrager Affiliate Brand Typical Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 26,514 For a brand with 1,000,000 monthly branded searches. 1. hotelreservations.com 2. hotelroom.com 3. hotelsavings.com 4. priceline.com 5. onetime.com 6. roomstays.com 7. local.com 8. hotels-and-discounts.com 9. orbitz.com 10. trivago.com 17

Hotels OTA Activity Dips Across the Board, But Hoteliers Should Mind Bing We observed a slight drop-off in OTA activity following the holiday flurry. While in Q4 2014, OTAs accounted for somewhere between two and three Ads per SERP on AOL, Bing, and Yahoo in Q1 2015, OTAs accounted for between one and two Ads per SERP. Google and Google Mobile numbers remained largely the same. Despite the decrease in OTA activity, OTAs still remain the most significant advertiser group in this category. Out of the Top 10 Trademark Users, nine are OTAs. OTA are still accruing significant traffic on branded searches particularly outside of Google. It s interesting to note how the disparity between Bing Mobile and Google Mobile mimics the disparity between Google and Bing. While hotel brands seem to have found ways to limit OTA advertising on Google, they have a real opportunity to do the same on Bing which can ultimately bring them more direct bookings. Takeaway for Brands With significant OTA advertising on all engines but Google and Google Mobile, it s clear that hotel brands who want to maximize their direct bookings could benefit from approaching Bing and other engines with the same mindset that they approach Google. Although these engines receive less traffic overall, the frequency of OTA advertising is significant enough to divert a large number of direct visitors and direct bookings. Tactics for working with and monitoring OTAs can be found in BrandVerity s Report on OTA Brand Bidding. Expedia Domains Continue to Stay Out of Top 10, Mostly Consistent with our findings from Q4, Expedia sites such as expedia.com, hotels.com and travelocity.com were not present in the list of Top 10 Trademark Users. This indicates that this resistance to trademark bidding may be part of Expedia s overall strategy that it incorporates in its agreements with hotels. However, #9 on the list of Top 10 Trademark Users is Orbitz, which Expedia began the process of acquiring on February 12. Interestingly, its position dropped since Q4 from #6, which may indicate that Orbitz is following suit with what seems like a company policy at Expedia. However, it s also interesting to note that Expedia owns a majority share in Trivago, which comes in at #10. We ll make sure to monitor this further as we examine Q2 s data. 18

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 Ads/SERP 1 2 3 4 5 6 7 8 9 10 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. Key No Trademark Other Lead Gen Search Arbitrager Brand AOL Bing Bing Mobile Google Google Mobile Yahoo Typical Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 40,585 For a brand with 1,000,000 monthly branded searches. 1. usinsuranceonline.com 2. insurancestep.com 3. about.com 4. local.com 5. autoinsurancequotes.com 6. insure.com 7. ask.com 8. free-insurance-quotes.us 9. instantratesquote.com 10. insure-your-ride.com 19

Insurance Lead Gen Sites Take Advantage of Google Mobile Lead Generation accounted for the vast majority of Trademark Usage on Google and Google Mobile. And although Google Mobile commonly sees less trademark bidding than Google itself, that didn t hold true when it came to Lead Gen sites targeting Insurance brands. Google Mobile actually showed more Ads per SERP from Lead Gen sites compared with Google, with 0.38 and 0.28, respectively. Many of these advertisers are making use of call extensions as a means of driving leads, patching potential customers through and then charging a hefty finder s fee. Strangely, despite the popularity of such sites on Google Mobile, they don t seem to have adopted the same strategies on Bing Mobile despite the fact that call extensions have been available on Bing since October 2013. Takeaway for Brands Search Arbitrage, Lead Generation, and direct competitors (the No Trademark ads tend to be from such advertisers) continue to dominate the Insurance category. Luckily, Search Arbitrage and Lead Generation issues are easily dealt with. Brands can choose not to purchase leads from companies that bid on their brand terms and restrict their Partners or Franchisees ability to work with these companies. If asked, search engines will also take down Search Arbitrage that uses trademarks. A proactive paid search team that carefully monitors these developments will go a long way toward clearing up Insurance brands SERPs. Top 10 Trademark Users Remain Relatively Consistent Similar to Q4 of last year, the majority of the advertisers in the top 10 list are Lead Gen sites, followed by Search Arbitrage sites. Four of the Lead Gen sites on the list also appeared in the list from Q4, suggesting that brands either welcome this trademark bidding or are simply unaware of it. Considering that many of the Lead Gen sites bid on brand terms but don t exclusively offer that brand s coverage on their landing pages (or sometimes at all), we suspect that it might be the latter. 20

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 1 2 3 4 5 6 7 8 9 10 Advertiser Breakdown Internet & Telecom AOL Bing Bing Mobile Google Google Mobile Yahoo 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 Typical Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 27,075 For a 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. mint.com 6. [BRAND]quote.com 7. [BRAND]deals.com 8. [BRAND]special.com 9. buy[brand].com 10. nocontractphonediscounts.com 21

Internet & Telecom Partner Sites Continue to Dominate on Google, Google Mobile, As Internet & Telecom brands frequently work with marketing Partners, their continued presence on all search engines in our study is to be expected. In fact, the number of Ads per SERP placed by Partners has remained steady since Q3 of last year. On Google and Google Mobile, these sites make up the largest share of Trademark Usage. On other search engines, Search Arbitrage continues to have a substantial presence, driving down the apparent impact of Partner sites. But, even on these other engines, Partner sites appear with the same frequency as the brands own ads, making them a dominating aspect of the SERP. Affiliate SERP-share Growing on AOL, Bing, and Yahoo Takeaway for Brands The interesting thing about the prevalence of Partner bidding and the rise of Affiliate advertising in the Internet & Telecom industry is that, almost without a doubt, these brands have agreements in place with both Partners and Affiliates governing how and when they can (or can t) bid on brand terms. That means these companies do have recourse through those agreements to curb this kind of trademark bidding, should they want to do so. Increased monitoring of paid search would allow these brands to know who exactly is bidding and whether it is out of compliance with their Terms of Service. If so, they should consider taking action to ensure that unapproved trademark bidding and Trademark Usage does not get out of hand. Some tips and tricks for curbing Affiliate trademark usage can be found on the BrandVerity Blog and in the BrandVerity Guide to Affiliate Compliance. In Q4 2014, we noticed a new trend in the Internet & Telecom industry: Affiliates bidding on brand terms. This number has continued to grow in Q1 2015. The highest number was on AOL, which had 0.22 Affiliate Ads per SERP, and Yahoo, which had 0.21 Affiliate Ads per SERP. These numbers are up from 0.15 Affiliate Ads per SERP for each last quarter. While the number of Affiliates using brand terms in their advertising remains fairly low in comparison to Partners and Search Arbitragers, it should be concerning to these brands to see Affiliates appearing at all. Most Affiliate Terms of Service are very clear about trademark bidding: it is not allowed. Brands in the Internet & Telecom industry would be well served to nip this trend in the bud. 22

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 2014. Some exclusions have been made for brands whose brand names are relatively generic and led to significant false positives. Category Statistics: Online Retail Ads/SERP 1 2 3 4 5 6 7 8 9 10 Advertiser Breakdown Online Retail AOL Bing Bing Mobile Google Google Mobile Yahoo 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. Key No Trademark Other Reseller CSE Search Arbitrager Affiliate Brand Typical Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 20,701 For a brand with 1,000,000 monthly branded searches. 1. amazon.com 2. outletlocation.com 3. local.com 4. officedepot.com 5. couponsfans.com 6. guruaid.com 7. about.com 8. ask.com 9. findsimilar.com 10. localjobster.com 23

Online Retail Affiliate Activity Rises on Bing, Drops Off on AOL Interestingly, while Affiliates accounted for 0.15 Ads per SERP on AOL during Q4, they were no longer significant enough to appear in the chart for Q1. At the same time, Affiliate activity rose on Bing to 0.15 Ads per SERP. While one might have expected a general decrease in Affiliate ads across the board after the peak holiday season, we instead see Affiliate advertising disappearing from the Google search network and moving to the Yahoo Bing Network. It s possible that the retailers in this category are becoming more conscious of preventing Affiliate advertising on Google, and thus motivating Affiliates to look to the Yahoo Bing Network as a means of recouping that traffic. Takeaway for Brands If the retailers in this category work with Affiliates, they should be mindful of their trademark bidding rules as we approach the rest of 2015. The increase of Affiliate bidding on Bing may be indicative of an attempt to circumvent merchants policies by hiding in less visible areas. Although Bing and Yahoo s market shares are lower, any popular brand should still have a high volume of searches for its brand terms on the Yahoo Bing Network. Search Arbitrage and CSEs Remain Constant Search Arbitrage and CSEs remain consistently prevalent Trademark Users in the Online Retail space. In fact, the number of Ads per SERP placed by these types of advertisers remained almost exactly the same between Q4 2014 and Q1 2015. That said, these numbers are substantially lower than they were in Q3 2014, suggesting that a combination of changes in how search engines treat Search Arbitragers and takedown notices from brands may be making inroads in addressing this kind of Trademark Usage. 24

Software, Web, & 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, & Technology Ads/SERP 1 2 3 4 5 6 7 8 9 10 Advertiser Breakdown Software, Web, & 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 AOL Bing Bing Mobile Google Google Mobile Yahoo Typical Traffic Loss (Clicks per Month) Top 10 Advertisers Using These Brands Trademarks 15,540 For a brand with 1,000,000 monthly branded searches. 1. downloadsable.com 2. downloadape.org 3. the-best-apps.org 4. melonapps.org 5. downloadnet.org 6. macsoftware.com 7. downloadzone.org 8. downloadease.net 9. download77.com 10. ask.com 25

Software, Web, & Technology Download & Toolbar Sites Continue to Have Impact Over three quarters of tracking, Download & Toolbar sites continue to remain a consistent presence in Software, Web, & Technology industries. The number of Ads per SERP across all search engines has remained just about the same with very little variation. Similarly, just like in Q4, nearly all of the Top 10 Trademark Users were Download & Toolbar sites (9 of the 10, in this case). Takeaway for Brands Download & Toolbar sites may be a nuisance for Software, Web and Technology brands as well as their users and customers. However, the brands in this category may be in luck starting early in Q2, with Google s updated policy regarding software distribution. We ll certainly be keeping an eye on this in our Q2 report. Nonetheless, with no such assurance from other engines, brands in this category may still want to monitor such infringements and take action, particularly on the Yahoo Bing Network. That said, changes to Google s policies regarding Download sites went into effect this April, and could significantly change these numbers in Q2. It will be interesting to see if this change dramatically reduces the number of advertisers attempting to bundle free software with adware and other apps. Brands Still Rarely Place their Own Ads As we ve observed in previous editions of this report, Software, Web and Technology brands don t advertise on their own brand terms all that often. Even on Google, the number of Brand Ads per SERP was only 0.33, meaning that only about a third of SERPs for these brand terms included ads from the brands themselves. While the economics of advertising could become costly for these brands, it also means that advertisers like the Download & Toolbar sites mentioned above have more opportunity to get in front of their users. 26

Appendix The State of Branded Keywords in Paid Search, Q1 2015 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 Q1 of 2015. 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 & 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 Lead Generation a site that generates leads using web forms, generally selling those leads to an exchange or a specific brand 27

Appendix The State of Branded Keywords in Paid Search, Q1 2015 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. 2 2 In some cases, Trademark Usage that represented a negligible fraction of the advertising in a particular category was included in the Other segment. 28