Competitive brand bidding isn’t new, but the practice goes largely unchecked across search. Managing trademark infringements is a difficult process and can become a drain on resources. These threats represent a risk to the equity of digital brands.
Adthena’s analysis, released Thursday, reveals that some advertisers face third parties that bid on their brand terms at high levels. Up to one-third of all queries now experience brand bidding, partly driven by 50% of advertisers that engage in competitive bidding on pure brand terms.
About one-third of brand queries experience competitive brand bidding and half of ads bid on pure brand search terms.
The analysis shows that 41% of ad impressions on brand search terms reveal competitor ads. The rate per month is about 401,232, and the trademark infringement rate per month comes in at 31,187.
The study highlights several examples. One in particular focuses on Amazon and its search spend invested in longtail keywords. Adthena’s data reveals that 63% of the brand key-phrases that Amazon advertises on receive less than 400 monthly searches, with these search terms also ranking higher on average than higher-volume terms.
Google’s largest AdWords clients, including Amazon and Booking.com, have large ad budgets. These advertisers frequently bid on competitor brand terms to reach consumers.
Amazon’s search advertising activity on brand terms has a major impact on the competitive market with a large portion of the amount spend devoted to brand search terms. In an earlier study, Adthena found as much as 30% of category ad spend on text ads.
For Amazon, this strategy allows the ecommerce company to capitalize on branded click share. It combines ad spend, expansive broad matching and dynamic search ads in brand search campaigns that focus on boosting their own customer acquisition at the expense of other brands and ecommerce competitors.
Adthena’s report also details how brands use expansive keyword matching strategies to capture share of branded search.
In Amazon’s case, the company uses broad or phrase matching on competitive market brand terms. A search for “Russell Hobbs Kettle 21600,” for instance, indicated possible phrase match keywords and DSA ad copy. The same keyword search also serves up an Amazon text ad on Google. But when there’s a spelling error in “Hobs,” the keyword matching extends to spelling errors on both product listing ads and text ads.
Despite a range of modifiers, variations, and incorrect spelling of brand terms, Amazon text ads remained constant across this sample of test queries. The analysis assumes this is a way to build up considerable market share in search.
There are three components to Amazon’s strategy, and all three are required to make it work. A large budget is needed to cover the market depth and search-term coverage, broad- or phrase-match keywords that give a deeper coverage of consumer brand queries, and dynamic search ads that automatically generate relevant headline and body ad copy text made to scale.
The Russell Hobbs example shows how disruptive Amazon’s advertising can be for individual brands. Russell Hobbs has an ecommerce site in the UK for direct sales, but the bulk of its sales are likely via retailer sites, according to the study.
The end result for brand owners may be an increasing reliance on the resellers, aggregators, or large ecommerce sites, as these competitors build up considerable market share advantage in search.