May 23, 2008 | Friday
Latitude Brand Term Index
By Simon Whittick in Latitude Publications |Articles |Marketing |PPC |Search Engines |Google |Search Expertise |Search Research
As promised, here is the first of the Latitude Brand Term Indexes (LBTIs) chart.
Given the recent flood of stories relating to Google’s change on Trademark policy, we’ve started tracking a “basket” of brand terms to monitor the rate of inflation on affected terms.
We’ll be presenting this on a regular, timely basis.
KEY POINTS/LEGEND
• The indexes are based on exact match trademarks to avoid the complication of broad-matching
• “Fully protected trademarks” are our trademarks which, prior to Google’s trademark change, had no competitor ads showing
• “Partially protected trademarks” are our trademarks which, prior to Google’s trademark change, although trademark protection had been filed, had competitor ads showing (most likely due to Google’s expanded broad-match)
• “All trademarks” are a sum of our fully and partially protected trademarks
The spikes in the CPCs are most likely the result of advertisers still experimenting with their bidding as a result of this new policy.
The historical activity over a two week period shows in general an immediate spike then levelling off, with a small peak showing in week 2.
On the first day after implementation: (late Mon, May 5th)
1. Advertisers who owned trademarks previously had unrealistic maximum bids. As the trademark change took place and competitors started bidding on their trademarks, their CPCs were forced up unknowingly.
2. Advertisers were caught unaware about how much their own brand CPCs are worth to them. Advertisers who were previously paying very little for a brand click were now paying up to twenty times as much. They were faced with a difficult decision of whether to continue to bid at this new price. Lack of experience and knowledge about the true value of their brand terms – many competitors know that their brand terms work so they don’t see the need for brand keyword analysis – meant trademark owners kept increasing their bids to ensure their ads were still showing
3. Other advertisers’ keywords now automatically started being broad matched to previously disallowed keywords. For example, ‘HSBC’ might now have started showing for ‘Abbey National’ and ‘Halifax’.
4. Experimentation on competitor’s trademarks
The next few days (7th May and 8th May) saw CPCs fall massively. Partially protected trademarks fell 54%, fully protected 55% and all trademarks 58%. Possible reasons for this sudden fall are:
1. Advertisers who previously had unrealistic maximum bids on their trademarked terms reduced them in an attempt to gain control over their rising costs
2. Cost and sales data from Tuesday 6 May was now available, making advertisers aware of the return from their brand terms and reduce CPCs accordingly
3. Competitors, now aware they were being broad-matched to some irrelevant terms, started reducing bids on their broad keywords and adding negatives
4. Advertisers realised competitor terms were not as cost effective as originally thought and reduced bids
CPCs seemed to start levelling off from Friday 9 May. This levelling off is most likely due to account optimisation and the protection offered by Google’s own quality score taking effect
SUMMARY
• Comparing the periods 21/4 – 04/05 (before the trademark change) to 09/08 – 15-05 (after the trademark change), the CPC increases are as follows:
- Partially protected trademarks: £0.215 - £0.236, 10% increase
- Fully protected trademarks: £0.019 – £0.052, 169% increase
- All trademarks: £0.044 - £0.077, 77% increase
• Fully protected trademarks saw the biggest change (CPCs more than doubled), while partially protected trademarks saw little change
• Again, this difference makes sense when considering the number of competitors that were showing before and after the change
• For the period 15/05-23/05 there is a levelling off with a small rise in CPCs at the start of the week (19th May) then it falls back down as the week goes on.
Comments
There are no comments for this entry yet. Use the form below to add yours.