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brand bidding, brand infringement, affiliate fraud, marketing compliance

Brand Bidding - Is your paid search protected from fraud?

Table of Content

  • Introduction
  • The role of keywords in paid search & display advertising? 
  • What is Brand Bidding?
  • How do brands lose to brand bidding?
  • How to protect your paid search ads?

Introduction

The brand name is the unique identity of a business, and that's how customers recognize its products or services. There are more than 0.5 million brands worldwide. In the post covid world, all kinds of businesses have established an online presence. This article will cover the dark side of paid advertising on search engines, brand bidding, and how it affects online brands. 

The role of keywords in paid search advertising? 

A keyword is a term used in digital marketing to describe a word or a group of words an Internet user uses to perform a search in a search engine or search bar. Keywords are the core of digital marketing, and that's the base on which all search engines and marketing activities operate. Search engine feed reads keywords as input and displays the related content to the users. 

Let us understand how keywords play an essential role in the digital world. 

Brands identify the keywords their potential customers can search for to reach them and then use them for Search Engine Optimization to attract organic traffic to their website or online store. Search engines also offer a platform to the brands where they can bid for the relevant keywords and then get their products or services advertised at the top of the SERPs or in the form of paid listing ads. There are three popular ways of advertising through search engines.

1. Paid search advertising is a type of digital marketing that works on the technique of bidding for brand-related keywords to display related ads on search engine result pages. Search engines have a cost for displaying ads on their platform, calculated by the number of clicks generated for the brand. How often paid search ads appear on the result pages, their rankings, and the cost per click depends on the bid and Quality Score of the keywords. The paid search ad spending accounts for more than $46 million in the United States alone. 

There are three types of payment models in paid search advertising. 

  • CPC - Cost Per Click 
  • CPM - Cost Per Thousand Impressions
  • CPA - Cost Per Action

In the image below, ads displayed at the top are for companies with the highest bid for the keyword' Laptop.' When a user searches for any specific product or service on a search engine, the first few searches appearing on the result page are paid advertisements, often referred to as paid search. 

2. Paid Listing Ads (PLA)

Product Listing Ads or PLAs are ads that appear when someone enters a product-related search into a search engine. The brands bid on the keywords, and their ads are displayed based on the highest bid. 

Product listing ads are different because they include product images, real-time pricing information, and reviews. This information is always up-to-date because it is pulled directly from your product feed.

Image Source

3. Display Advertisements are text-based images or video ads placed on any digital medium to drive user traffic. They encourage users to click through to a landing page and take action. As part of push marketing, display ads appear to users based on different targeting parameters and are displayed on any one of the digital channels like websites, social media, etc. One of the essential parameters for display ads is based on search keywords. 

What is Brand Bidding? 

With the ever-increasing rise in online sales, digital advertising accounted for 63.6% of the total amount spent on advertising globally. The Statista report also projected that the share would increase to 73.6% by 2026. Digital ad spending is forecast to grow from $521 billion to $876 billion.

Share of digital advertising spending worldwide from 2021 to 2026

The increase witnessed by online advertising is reason enough for brands and advertisers to be proactive in ensuring the safety of their company's brand reputations and their customer's online shopping experience. 

Brand bidding, also known as trademark bidding, is an act of bidding on particular brand-related keywords for paid search on search engines. Popular brands bid on their keywords to ensure they appear on top of search result pages; this is a legitimate practice in digital marketing. However, when threat actors bid for popular brand keywords to attract online users, it infringes on the brand's image. And thus, it is referred to as Brand infringement, which means using any brand's intellectual property to attract users, which violates general marketing guidelines. 

Brands generally bid on their branded keywords to lower the cost-per-click or block out their competitors. But the threat actors or competitors bid on popular brand keywords to steal their online user traffic and increase their CPC rates.

How do brands lose to brand bidding?

Brand bidding is one of the many types of trademark violations & unfair means of attracting online users. It affects the brand's reputation and advertising budget in multiple ways.

  • Increased Cost-Per-Click for paid search ads

More bidders mean higher bidding prices, meaning that brands have to pay more for each of the clicks they receive on their campaigns. The paid search prices are set through an automated auction of the keywords, and more bidders contribute to hike up the price.

  • Decreased Click-Through-Rate 

When more bidders compete for a brand keyword, the chances of user traffic diverging are higher. Users are given more options when searching for a brand-related keyword, which eventually affects the advertisers' overall sales. 

  • Paying illegitimate affiliates

Bidding on a famous brand's keyword to diverge its users is an illegitimate way of increasing web traffic and sales. Malicious affiliates often use this technique to inject their affiliate cookies and monetize sales using the brand's market value or drive the brand's user traffic to their competitor's website. Advertisers pay commissions for the traffic that organically has been coming to their website but get misguided through affiliate partner channels. 

  • Decreased Sales

Competitors and malicious affiliates use the popular keywords of a brand and bid for paid search campaigns. More bidders directly hit the gross sales as the user traffic is diverted to different sources due to multiple ads with similar keywords. 

  • Negative Impact on the brand reputation

Customers looking for a particular brand keyword expect to land on the brand's website. In case of brand bidding violation, they get diverted to a competitor's website or a low-quality alternative. This leads to eventually losing trust in the brand. 

How to protect your paid search ads from fraud?

Since the onset of digital marketing, threats to brands have increased even more. Marketers are adopting ways to ensure their brand name and image are protected from fraudulent activity. 

Affiliate marketing contributes to a 15% share of global advertising revenue. While majorly affiliate marketers help brands to generate incremental revenue by driving legitimate user traffic, threat actors can intentionally use means to increase their commissions. 

Virus Positive Technologies search monitoring tool – The Paid Click, helps the brand to keep a watch on their branded keywords and monitor any bidding violations. The tool allows you to 

  • Track; the use of your brand keywords on nine different search engines across the globe
  • Monitor; the paid search ads for brand compliance, affiliate/reseller compliance, and competitive insights
  • Analyze; the impact of any violations identified in paid search campaigns. 

Contact our sales team for a live demo at – sales@viruspositive.com

Pooja Tripathi | Head Of Pre-Sales & Marketing

Executive-level Business & Marketing professional with more than 10 years of high-end experience in advertising and ISV companies. Passionate about people, energetic and direct, with the belief that we have no limits.

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