A recent study from the IPA has found that the Cost Per Click (CPC) of paid search for brand terms on Google has risen from 6p to 29p from period January 2008 to March 2009. Click Through Rates (CTRs) for the same period have shown a decline from an average of 40% to 20%.
This raises serious questions around the effectiveness of paid search and whether it has become a commodity. There were a number of changes last year that impacted this, in particular the introduction of brand bidding in May 2008. This was a highly contentious issue which worried a lot of brands. We can now see the impact this has had; opening up the market has driven prices up. Brands are now having to defend their territory much more aggressively.
With more brands focussing their budgets into natural search services this year, it is evident that paid search might be seen to be less efficient. There may be a number of reasons for shifting budget to natural search, but our stance has always been to ensure you develop a solid “search” strategy, which means building natural and paid search campaigns together. This, of course, is best done in one agency as their teams can work closely side by side.
Our advice here would be not to panic. Things to remember are:
- Ensure that you are protecting your brand online. Check you have coverage from both natural and paid search for your key brand terms to reduce competitor voice.
- Chances are that for most companies, bidding on your brand terms is an inefficient strategy. This should be a last resort for a big brand with a lot of budget to burn, as they should be focussing on keywords which provide a better return on investment (ROI).
- Monitor the performance of your brand terms closely. Check your own trends for the year and see if this is really the case.
Written by Jeremy Jacobs, owner of The Digital Consultant
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Tags: cpc, ctr, Google, Natural search, Paid search, paid search cost
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