A legendary anecdote from Restoration Hardware CEO Gary Friedman tells how, nearly 10 years ago, Restoration’s marketing team pushed to double their budget because Search Ads were converting customers at incredibly low cost.
Friedman asked which of Restoration Hardwares 3,200 keywords drove sales.
Restoration Hardware was the best, followed by 21 common Restoration Hardware misspellings. Together, these keywords accounted for 98% of search ROI. Friedmann She said he withdrew the brand research budget the next day.
A decade later, retailers and e-commerce sellers struggle with even more complicated brand research systems. However, for all the complexity, one thing is clear about branded search: how unfair it is to brands.
Brand search compression
Google, Amazon and Apple use branded search to control profit margins on their platforms. In other words, they basically charge the rent.
Apple, for example, made changes in 2021 and 2022 to extend Search Network ads to more prominent locations, including search results, other app product pages, and the App Store homepage. A couple of years earlier, Apple started allowing developers to target competitor keywords and app names.
But Amazon is relentless in the way it uses brand research data to spur advertisers to spend.
Three legacy CPG retailers told me that Amazon’s core retail business uses Amazon brand research data to get businesses to list on Amazon. For example, Amazon’s Marketplace team used public information about where and when TV ads appear (such as a big push in a certain city or market) to demonstrate a corresponding increase in Amazon search traffic.
Just imagine all that branded traffic your commercial is driving, and there’s nothing Amazon can do but reluctantly switch customers to your rival. If only you were here. (Or so the tone goes.)
The branded edge
Amazon is always sharpening its brand search beyond just allowing direct keyword targeting.
Late last year, Amazon introduced a new metric for search keyword branded share, which is the percentage of clicks that go to a company’s product relative to the total number of clicks on that keyword, Bryan explains. Porter, co-founder and chief e-commerce officer. by Simple Modern, a glassware manufacturer.
On the one hand, Amazon’s brand share metric has helped Simple Modern feel comfortable not spending money defending their keywords, as over 95% of Simple Modern’s searches convert organically.
But the metric is also a clever way for Amazon to reward sellers who bid for market share growth.
Stanley, a rival maker, released a glass last year that went insanely viral on TikTok. Porter said Simple Modern was able to capture Stanley’s traffic and, according to the new metric, at times garnered up to a 15% share of its competitors’ branded searches.
Max marked
But Google, no surprise, puts the biggest squeeze of all on branded search with Performance Max.
PMax serves ads across all Google-owned media and across the Google Display Network, using Google’s proprietary data to optimize and attribute campaigns.
It’s a big call for advertisers to blindly run ads on Google Maps, Gmail, YouTube Shorts, or potentially other formats they’re not interested in. But PMax’s toughest sell is actually the loss of brand research controls.
Until last month, PMax did not have controls to prevent Google from bidding on brand terms. PMax may target I want to buy back Burts Bees baby shampoo and wash and claim a clear organic conversion. With branded search data, PMax could also use low-cost display network inventory to retarget people who are close to making a purchase.
So?
For legacy brands and e-commerce natives, brand search compression is just a way of life. Muttering is a bit like complaining that your knees hurt as you get older.
Remember the anecdote about Friedman’s restoration hardware? It wasn’t about Google the bully. His point was that retail is retail. Shoppers go to a mall for Restoration Hardware and Pottery Barn is probably just a few storefronts away.
We call the waaahmbulance?
At my local Duane Reade, my favorite brands of shampoo and body wash are locked behind a plastic shield, requiring me to press a button and wait for an employee to release them. Private-labeled clones of each sit a shelf above, free of plastic purgatory.
Which is all to say, brands know this treatment. Also, the search situation is different between brands and platforms.
Someone looking for Kleenex may mean fabric and not give a damn about the Kimberly-Clarks brand.
Meanwhile, a Google search for Pampers could be anything. Maybe a new mom is doing some research. Maybe a high school student is gathering information for a Procter & Gamble report. Maybe someone is looking for that commercial that made them cry.
You get the point.
But an Amazon search for Pampers is likely someone about to mash the buy button on diapers.
Which means there is no longer a search strategy, with a focus on Google extending to Bing and other search engines. There is now a Google Search Plan, an Amazon Search Plan, and an Apple App Store Plan, each with their own keywords and tactics.
Too wanted
Even if advertisers accept that the restriction of branded research is inevitable, platforms can still go too far and risk damaging their reputations with customers and advertisers.
Ever since Apple launched search ads with no-holds-barred competitive targeting, the App Store rankings have ossified. Any app with the wind in its sails is targeted to death for keywords by bigger apps, sometimes not even competitively but just to find people ready to install, even if it’s not a relevant app.
That’s how shopping app Temu, an empty shell of a company with a huge paid media budget, topped the App Store charts pretty much overnight. No degree of organic love can propel an app that high without some serious research budget from Apple.
Some Amazon advertisers can do without branded search budgets, but the platform is still buckling under the weight of its ad inventory.
An Amazon seller can spend $0 on brand research and still make it work, said Simple Moderns Porter. Amazon’s algorithm, for example, prioritizes price, the effectiveness of shipping an item, sellers’ timely order history, and positive reviews, among other factors.
But customers notice the deluge of brand research.
Amazon’s overly aggressive search advertising has exploded recently in the trade press and in general tech and consumer news. Virtually everything on Amazon has become an advertisement, Jason Del Rey wrote to Vox last November. In January, New York Mag’s John Herrman reflected: Why does Amazon seem to be making itself worse?
Wall Street analysts fear a steep decline in Amazon’s customer satisfaction scores isn’t due to COVID measures, Amazon Prime price hikes, or even bad public relations, such as Amazon’s union and labor disputes, but rather to changes to its search engine.
Google has already overextended itself and has been forced to back out on some of its branded search moves.
Over the past couple of months, Google has introduced controls so PMax advertisers can prevent Google from buying branded search terms and avoid certain terms for brand suitability reasons. (Readers of the AdExchanger Commerce newsletter got this news first.)
A brand that makes faux leather products can now avoid looking for, say, fox fur, even if PMax expects a conversion in sight.
Also, PMax can finally be prevented from bidding directly on a brand name.
A branded bridge too far?
Some brands and retailers have spent millions testing branded search keywords only to find that it’s better to save the budget and focus on organic conversions.
For Google to buy those same keywords and claim the conversions were over the limit.
But despite Google’s PMax concessions, don’t expect the branded search compression to ease.
Brands are reluctant to pay rent to Amazon and Google. Developers hate being frozen in the Apple App Store chart.
But when push comes to shove, advertisers want branded search capabilities.
Porter told me that Simple Modern doesn’t see much value in spending on brand research on Amazon. Instead, the brand is spending more on following keywords than its rivals.
But isn’t that research branded? As soon as somebody else brand research?
Yes, that’s right, Porter said. I guess I’d much rather spend money on our competitor brand research than our own.
The squeeze continues.
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