The image below is a screen capture of the Google results for the search term “RXBar.” RXBar is a popular brand of protein bars.
Look carefully at the highlighted lines. The first result is a paid search ad run by RXBar. The second result is an organic link. Both results lead to the homepage of their website. Why is the brand paying to run advertising above its own organic results?
In the absence of advertising from competitors, I can’t come up with a good reason. This ad is almost certainly doing two things:
- It’s diverting traffic to paid search from the organic link below it, since most consumers click on the first search result in Google. Turning organic clicks into paid clicks, as you might expect, costs the brand money.
- If branded search terms, like “RX Bar” are being managed in the same hierarchy in Adwords as unbranded search, and budget decisions are being made based on overall averages, the presence of this ad would lead the brand to overspend on unbranded terms like “protein bars.”
The first effect is hopefully small. Since the brand is the only one bidding on the branded search term, the clicks should be inexpensive.
But, the second effect could be very large, for the same reason. This would cause the brand to materially overpay for unbranded terms.
If you see this for your brand, try recalculating your paid search performance with branded search results removed. Are you still happy with the performance results? If not, it’s time to take a harder look at your paid search strategy and the agency running it, especially if they’re paid on a percentage of spend.