Challenging the value of branded search. A call for incrementality research

Should advertisers challenge the value of branded search? A call for incrementality research

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The Danish Competition and Consumer Authority (KFST) has recently published a report and research paper covering the impact and consequences for advertisers when investing in branded search on Google.

At GroupM Nexus and Acceleration, we take this topic seriously and we believe more advertisers should do so as well. Because in the end, it’s about allocating the media budget where it drives incremental performance.

During the past years, we have carried out a large number of projects with advertisers globally focusing exactly on the challenge of understanding the incremental contribution to the business from single media channels, like for instance branded search.

Based on our experience, there are indeed cases where the investment level in paid branded search does not provide full value for money for advertisers. Our extensive research in this area has shown that some of the traffic obtained via paid branded search has unnecessarily cannibalized our SEO efforts which would have picked up that traffic. However, it should be noted in relation to this point, that the risk of “overspending” could be related to any media channel, not only branded search, if not measured properly.

Furthermore, we’ve found that it is very difficult to generalize findings, as it is done in the report from KFST. The incremental impact of branded search will vary significantly depending on factors such as, but not limited to, brand strength, competitive landscape, and organic rank.

Ad budgets spent on branded search should be used on formats that have a proven incremental effect on traffic and sales, such as generic search ads and shopping ads, or be placed on SEO instead to increase your organic visibility further.

However, to assess where to best allocate the ad budget, it is crucial for an advertiser to conduct their own, tailor-made research and consider alternative options. In short, advertisers need to:
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1. Adopt a test-and-learn approach

Instead of shutting down spending completely, advertisers must understand what drives the incremental effect. Because even though let’s say only 10% of the clicks or sales from the brand ads are incremental, this can still account for large volumes of traffic and revenue that would otherwise be lost. Thus, it would be wise for the advertiser not to shut down spending completely, but rather reduce or pause smaller segments of their brand search, either by themselves or together with an agency with experience. Knowing where to reduce spending effectively, however, requires incrementality experiments.
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2. Think full funnel

It is very important to apply a full-funnel perspective when doing incremental analysis. Considering the impact on clicks exclusively does not provide a holistic evaluation. Any incremental effect from media investments should be measured on a broad range of KPIs such as clicks, turnover, transactions, brand metrics, etc. Only a full-funnel perspective will give insights about the true incremental impact and contribution from branded search (and any other channel). If we fail to do so, there is a significant risk of misinterpretation of the real business impact, which consequently can lead to wrongful conclusions.
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3. Consider generic, shopping search advertising and SEO

Instead of focusing exclusively on brand search investments, many advertisers would benefit from investing in generic, shopping search advertising and SEO. There are multiple ways of tracking organic and paid competitors on specific terms or categories, so advertisers should test generic search terms together with a specialized partner. Are we e.g., ranking no. 1 in organic search on “organic cotton socks” and have paid ads on this term, but there are little to no competing advertisers? Then we should probably not advertise in this term but rather identify other keywords or segments that are equally important to us, where organic ranking is poor and we’re losing visibility in paid ads to competitors. While investing in paid ads use these insights to focus SEO efforts to gain organic visibility on these poor ranking terms. There is an immense untapped value in collaborating between SEO and paid search, also called Integrated Search.

To summarize, we strongly encourage all advertisers to challenge their investments in media and implement methodologies that can measure its true incremental impact on the business. But it is very difficult to generalize as it is done in the report from KFST, and most importantly, any incrementality research should not only be done on clicks as KPI.

If you want to hear more about how we at Acceleration implement and carry out scientific incremental experiments to identify the true effect of media investments, don’t hesitate to reach out to Kasper Madsen, Senior Measurement Consultant at Acceleration (kasper.madsen@acceleration.biz) and Kristian Dyhr Toft, Executive Director at Acceleration (kristian.toft@acceleration.biz). If you are interested in learning more about how we at GroupM Nexus work with Integrated Search, please reach out to Alexandra Munk, SEO Strategy Director at GroupM Nexus (alexandra.munk@groupm.com).

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