In the realm of digital marketing, brand ownership means everything. It’s safe to say that nearly all search advertisers see the vast majority of their traffic and revenue come from their branded initiatives.
Put simply, branded (search engine marketing) SEM is something advertisers need to fully own and focus on optimizing. With that being said, one of the biggest challenges within the brand space is optimizing spend as efficiently and effectively as possible, in relation to CPC (cost per click) levels.
Knowing that branded campaigns are so important for paid search, many advertisers opt to max out their keyword CPC bids. This means that the CPC headroom, or monetary gap between your max CPC bid and your keyword’s average CPC, will be much larger than needed.
In their minds, this ensures that they are capturing the maximum amount of traffic without sacrificing brand real estate. Although the theory behind that approach is technically accurate, these individuals are not being nearly as efficient with client spend. These campaign managers also allow Google and Bing’s algorithms a greater opportunity for charging extra money.
Typically, SEM advertisers fall into this trap for a good reason, because they want to ensure that they are eliminating competition on their client’s branded space.
But, we believe that minimizing the headroom between the max CPC bid and the average CPC over time will allow these advertisers to ultimately cut the spend levels without the sacrifice of user volume or traffic.
What we did to prove this theory
We ran a couple of tests to see how traffic was affected. Initially, we cut our bids in half, but we immediately saw traffic drop off as a result. Then we took a different approach and