PPC: Paying to Brand is Playing to Lose

By Tad Miller | Sep 18, 2007
More Articles by Tad

There is no other advertising medium that can be measured more effectively than Pay Per Click advertising. Despite having the ability to actually track if advertising is effective and is leading to the type of conversion actions that advertisers want searchers to take, an increasing number of advertisers ignore the data.

Maybe it’s ego, maybe it’s “someone’s gut” or maybe its “Brand Strategy”. Whatever you call it, there are a lot of people who are bidding very high costs per click on keywords just for the sake of visibility – just so their ad can appear in the top position and people will click through. These are clicks for the sake of traffic and not much more. Essentially it’s like buying a big online billboard that everyone sees by the side of the road. Buying the real billboard might actually be more effective.

I see it every day, companies that are obviously bidding “whatever it takes” to be in the number one ad position without any regard to if it’s effective. It’s a huge waste of money, and it’s likely that they even have the data to prove it’s a huge waste of money.

I also see advertisers doing a lot of aggressive bidding on keywords that are ‘close’ to what they are actually offering but not exactly selling. Doing this on Google will likely lead to a poor Quality Score and an increase in minimum bids and costs. This also leads to a poor searcher experience when they don’t find what they were actually searching for – is that good branding?

In the mean time advertisers that are actually in it to make a profit from their PPC have to compete against these “branding ads”. Doing this effectively means moving down in ad position and maximum costs per click. This likewise means less traffic.

So who really benefits from all of this reckless bidding? Google, Yahoo, MSN and the SEM agencies managing those accounts that charge a percentage of media spend and don’t say anything to their clients about spending money more effectively.

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  • http://www.techsavvymarketer.com Vittorio Bosio

    You made a great point.

    The companies that are using Adwords for general “brand advertising” are also the ones sending their traffic to the homepage and have no idea on how to convert their traffic better.

    Most of the time, the visitor won’t be able to find what he is looking for and will end up clicking on the other ads. And hopefully sooner or later those companies will stop advertising on Adwords, since it is not effective, at least in their opinion. :-)

    In our niche, for example, competition has increased sharply this year, because of our Chinese competitors discovering Adwords. They advertise for a couple of months, then you never see them again: they spent a couple of $1000s and realized they got no new business out of it.