But over time, I’ve heard other experts stating that their research shows that having ad presence for brands along with natural search ranking appears to enhance overall click through rates in a synergistic manner. And, with greater experience, I’ve seen a number of cases when companies really should be buying their own brand name keywords for ads!

I see that George Michie over at the Rimm-Kaufman Group criticized a recent Microsoft study claiming that some advertisers are wasting money by buying their own brands in paid search ads — and I think George was right to criticize this. Read on and I’ll elaborate…

I’ve seen a lot of cases where companies frequently don’t rank well for some of their brand-name combinations. Sure, one can argue that if their natural search optimization were done better, they might rank at the very top of the SERPs for those combos. But, I see cases where quite a few companies have products that are more typically purchased through particular department stores, resellers, or other distributors, and those other companies may have so much better search rankings that the original product creator is not likely to ever rank above them.

In these cases, I think that buying one’s own brand names in paid search makes a lot of sense!

For example, I love these Jhane Barnes clothes I can get at high-end department stores like Nordstroms — if you do a search for “Jhane Barnes trousers”, you get a search results page where the official Jhane Barnes site is only listed in the sixth position down:

(click to enlarge)

Now, I know that it’s likely that most of the Jhane Barnes sales likely happen in department stores, so it’s maybe not upsetting to them that they’re ranking lower than Neiman Marcus. Quite simply, Jhane Barnes (PageRank = 5) is not likely to ever outrank much more widely popular sites like Neiman Marcus (PageRank = 6) or Bluefly.com (PageRank = 6). Even if Jhane Barnes were to fix all of the SEO flubs that I see going on with their site, I’m not at all sure that they would overtake the Neiman Marcus or Bluefly pages that I see outranking them on that longer-tail search combination.

I’d bet that Jhane Barnes would make more money selling directly to consumers than selling through these distributors, though, and getting position higher on the SERPs would help with that. A paid search ad for their brand name would help insure they’d get up there. And, as a consumer, if I rapidly saw their official site when I came to this SERP, I might be inclined to click through to check their prices first, in the assumption that they might have just a slightly lower price than Neiman’s for the same item, or I might get discount offers from the later on.

Let’s look at an even more dramatic example, though. Let’s do a search for William Gibson’s newest book, “Spook Country”:

(click to enlarge)

Notice how the highest couple of links in the SERP is to the book’s pages at Amazon.com? The next is Wikipedia. The next two are, thankfully, the author’s own site. The two after that are to magazine and news sites, and so on. Now, you can buy the book through the author’s site, but it just has links off to other places like Amazon and Barnes & Noble to buy the book. But, how about the big publisher who manufactured and promoted the book?!?

Putnam Adult, the imprint of the book, is owned by the Penguin Group USA, the publisher. They’ve got their own online shop where this book could be purchased, assumably at higher profit for Penguin than if the book is bought through distributor book shops. The Penguin Group’s listing for Spook Country is all the way on the second page of the search results in Google — a place where practically no consumer is going to click to buy.

The Penguin Group USA website has a Google Toolbar PageRank of 7, but their pages are not likely to ever outrank the internet behemoths of Amazon.com (PageRank = 9) nor Wikipedia (PageRank = 9). They might even have considerable struggle with getting above The New Yorker (PageRank = 8), and The Los Angeles Times (PageRank = 8).

The best way to ensure that The Penguin Group’s page selling their own book makes it into the field of vision for online consumers would be to buy the keywords for “Spook Country” and “William Gibson” – ads in the sidebar or above the natural search results would undoubtedly drive up their direct sales, reducing how much they’d pay to the distributors.

Of course, to have me, a dyed-in-the-wool natural search expert endorse paid search may invite all sorts of criticism! I used to hear the paid search reps touting branded keywords as enhancing overall click-through, though, and I couldn’t help but be suspicious of their motives, since they have an obviously vested interest in increasing paid search purchases. However, I think that there are objectively logical reasons for using paid search placement for brand keywords, just like the examples shown above, and I think that there could indeed be a positive psychological effect on brand recognition when both natural and paid search placements appear on the same page. At very least, if you’re in both, you’re taking up more of the page’s overall real estate, reducing the space taken up by other parties.

I believe that a strong search marketing program has both paid and natural presence.

So, George Michie is right, though I don’t know that I’d go so far as to call affiliates “thieves” , since affiliates are frequently more facile, quick and efficient at targeting market niches that the bigger, product-originating companies have difficulty in catering to.

From click fraud to paradigm shifts in PPC, this interview informs and teaches us how to be more “paid search”-savvy on a corporate level. Learn how to channel Alan’s passion for search, and find out how his tips can benefit you in this 55 minute podcast.

Alan gets around. He’s a regular speaker at SES, DMA Annual, ACCM, Shop.org, eTail, NEMOA, and DMD NY conferences. He writes the internet retailing column for Catalog Success. He’s quoted in the media, including Business Week, and The New York Times. And he’s a Fellow at the University of Virginia’s McIntire School of Commerce and guest lectures there.

Alan wasn’t always agency-side. Prior to founding his firm, he was the VP of Marketing at Crutchfield, where he helped grow Internet revenues over 450% to $80 million in 2002 and helped earn Crutchfield “best of the web” commendations from Time Magazine, Internet Retailer, BizRate, Forbes, US News & World Report.

So this is what Alan had to say in an interview with me (Stephan Spencer, founder and President of Netconcepts):

What are the biggest problems facing online retailers in relation to paid search? Is it click fraud or something else? And how does one effectively deal with that problem?
The biggest challenge (and opportunity) facing retailers in Paid Search is complexity and the speed of innovation. The industry is changing so quickly — new ad formats, new engines, new platforms, new feeds, new pricing — every week brings new innovations, more options, more complexity. Google raised the bar when it comes to rapid innovation. Retailers and agencies alike need to scramble every week to keep up.

And I don’t see this trend slowing — if anything, it may be accelerating. If you’re into thinking about future, check out Kurzweil’s The Singularity is Near. While Kurzweil is writing about technology as a whole, I think his core observation — that the rate of change itself is speeding up — applies fully to online e-commerce and online advertising. Expect to see as much innovation in the next 2 years as we experienced in the last five.

Great point. I love Kurzweil’s writings and have warned those who will listen of the rapidly accelerating rate of change. Now, what are a couple of examples of common mistakes that companies make when they enter into the paid search arena and what are a couple of examples of mistakes that seasoned companies make?

Typical mistakes made by newcomers to paid search include using an insufficiently large term list, not understanding the strengths and limitations of their tracking systems, not customizing copy to match the search phrase, not having a firm grasp of their online acquisition economics, and not bidding wisely.

Typical mistakes made by more experienced search marketers include not separating their brand from their non-brand results in reporting and bidding; not understanding the (non)incremental value of their affiliate programs; mishandling dayparting; and overbidding on broad generic terms.

Can you describe an ‘Aha!’ moment you had, something that was like a paradigm shift for you?

I enjoyed (and recommend) John Battelleâ??s book, The Search. I think Battelle’s “Database of Intentions” concept is critically important to us as marketers, but also to us all as citizens. I had an “Aha” moment when I spent some time surfing leaked AOL search logs. Those logs show first-hand the tremendous power of click streams to track and understand our individual and collective thinking. Search is an amazing technology, a total paradigm shift for advertising and for society.

You have a pretty interesting scientific background that includes complex mathematics. Can you tell me how that comes into play with what you are doing now? I know, for example, we have had some stimulating discussions about graph theory and how that relates to SEO.

Yes, I happily survived (!) a PhD in optimization and statistics at MIT, ihtfp. That background provided me the mathematical chops to contribute much of statistical & optimization horsepower supporting our bid management platform. I also enjoy collaborating with academics to increase our collective understanding of online marketing. We have some great collaborations going with professors at University of Rochester and University of Santa Clara. I also like working with our team on internal studies (for example, see here). And like all good SEM firms, we do a tremendous amount of ongoing staff training on search, marketing, statistics, and web tech â?? the teaching perspective I picked up while serving as a graduate teaching assistant come in handy.

Describe a huge win that you have recently achieved for a client.
This year we helped a Fortune 500 retailer nearly double their tracked direct sales from PPC while simultaneously increasing their ad efficiency by 28%. Weâ??re managing about 250k active terms for them, spending about $250k/month non-peak. Going in, we knew they weren’t advertising efficiently and were certain we could really increase their efficiency and profits. We didnâ??t expect our efforts would drive top line as well. Very happy client, happy agency.

Can you describe the significance of the initiative you started with standardizing shopping search feed formats? That is a pretty important initiative and I am sure our readers would love to learn more about it and where things are at.

I got really fed up with the comparison shopping engine mess last year. Why do these engines all require almost identical data in different formats? Why donâ??t they support Unicode and foreign characters? Why do they make extracting detailed cost data (by URL, by day) so difficult, frustrating retailers seeking to optimize their campaigns? Working with the great folks at ARTS and the NRF, along with representatives from the engines, agencies, and retailers, we’ve crafted three feed formats to simplify this whole situation. The specs were released earlier this month and weâ??re starting to get some traction. More here, get involved!

You used to work client-side for Crutchfield.com. How has that helped you be more effective on the agency-side now?

Great question! I still feel like a retailer, even though I’m wearing a vendor hat these days. My retailer background (VP Marketing, Crutchfield) taught me what it means to have to make every ad dollar pay. It also taught me what I liked and disliked about client-vendor relationships. At our firm weâ??ve tried to adopt all the “likes” and avoid all the “dislikes”. We take a retailer-friendly approach: high transparency, easy-out contracts, fair and straightforward pricing, no commissioned sales people, etc. I don’t think I’d have that view if I hadn’t been on the other side of the desk for five years.

Netconcepts have very strong core competencies around the technical aspects of web development and search engine optimisation, and it is rare to find this level of experience in New Zealand. They’ve given us a lot of valuable guidance in this area as well.”

Charles Coxhead
Online Marketing Manager
House of Travel

Should you hire an in-house SEM, external agency, or both? Pat says it primarily depends on your online marketing goals, marketing budget and risk management mindset.

What about buying your way into top rankings? There are seven fundamentals of any PPC campaign as Pat highlights…

First off, bid jamming is something you can do in Yahoo! Search Marketing (formerly known as Overture). Bid jamming is when you increasingly raise your bid amount to just a penny below the top bidder who has foolishly set their maximum bid amount way too high. This forces the top bidder to pay that max bid amount per click, whereas you only have to pay one penny more than the bidder underneath you. Of course, this can cost the competitor a lot of money quite quickly but, if you are not careful, you can get bid jammed yourself in the process.

Gap surfing is a tactic for ensuring your bid is no more than it needs to be to maintain your target rank. So if you are happy to be lower than #1 position and you don’t want to pay too much, you might want to use this tactic. In a nutshell, you scan through the top ranking ads and find the big gaps in bid prices and you bid at the bottom of one of those gaps — e.g. the biggest gap within the top five positions.

I would recommend staying clear of bid jamming, and I would employ gap surfing only if you have a bid management tool that supports this capability. I wouldn’t try and accomplish it manually. Particularly since Google AdWords doesn’t even show you everyone’s bid amounts, so you’d have to continually revise your own bid amounts and monitor your position until you figured out the gaps.

As you can see, there is a lot of complexity and subtleties in pay-per-click (PPC) search advertising, and we’re only scratching the surface here. It goes on to include sophisticated web analytics, and constant automated revisions of bid amounts based on the web analytics data (e.g. the technique of dayparting). Trying to manage pay per click campaigns without the proper tools is like showing up at a gunfight with a sword.

Well, there’s been a lot of controversy as of late about buying text links. Blogger Phil Ringnalder published a scathing post accusing publishing house O’Reilly of being a search engine spammer. O’Reilly’s founder, Tim O’Reilly, responded to the accusations on his own blog. Google engineer Matt Cutts posted a comment to Tim’s post admitting that Google has decreased the voting power of sites like perl.com and xml.com and downgraded the reputation of some of their outbound links. Ouch!

Matt’s (and presumably Google’s) position was loud and clear:

If you don’t want your own site to suffer the same fate as O’Reilly, you better tag your link ads with a rel=nofollow attribute so that you don’t pass any PageRank score to your advertisers.

In my mind, that doesn’t seem quite fair. Website owners and bloggers work hard to build a content-rich site with good PageRank score. Google’s black-or-white stance on this equates to a diminished earning ability for these websites by insisting webmasters cut off the flow of PageRank to their advertisers. This of course decreases the value of the link ads to those advertisers, and consequently the revenue likely to be realized from them. Granted, no savvy advertiser is going to buy a text link ad solely based on PageRank score, but PageRank does factor into the equation.

This makes me wonder what Google’s position is on BlogAds.com is, which is part banner ad, part text link ad. A good blog ad contains useful content. Why shouldn’t the blogger be allowed to “vouch for” (by not tagging the link with nofollow) the links contained within that ad if they so choose?

Most “white hat” SEOs such as Christine Churchill believe text link advertising is a legitimate practice. I agree with her.

I wonder what Google would do if all the websites across the Internet decided to take all their banner ad inventory they have and bypass the click-tracker redirect that counts all the clickthroughs. Suddenly all these new votes would start counting all over the Internet for commercial advertisers and sponsors. Wouldn’t that throw Google for a loop!

So what is the bottom line here for bloggers who are looking to advertise? It’s basically this: be discriminating in your link buying. Text link advertisements are not inherently evil. Just don’t buy ads on sites where any of the other advertisers on the site are misleading, deceptive or misrepresentative. By that, I mean things like the following:

1. Setting the ad’s link text to some keyword-rich phrase that doesn’t accurately reflect the page that is linked to.
   e.g. An ad on SeacoastOnline.com proclaims “The North Face” but that isn’t The North Face!
2. Linking the ad text to a landing page that is built for search engines and not for people.
   e.g. the “Discount Vacations” ad on DailyItem.com points to one of Orbitz’s many “doorway pages”.
3. Hiding or obscuring the link so human visitors can’t see it, only search engines.
   e.g. Doing a “View Source” on the home page of PRNewswire.com reveals these hidden links:
   
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<a href="http://www.icrossing.com">Search Engine Marketing</a>
<a href="http://sev.prnewswire.com">Search Engine News Release Optimization</a>
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And it goes without saying that you should refrain from such practices yourself when you advertise.

This post is based on material taken from on my own blog across three separate posts: Link buying – ethical or unethical?, Buying links – Google’s perspective, and Buying link ads – the ethical debate rages.