Brand Bidding in Affiliate Marketing05.04.2023
What is brand bidding?
Let one begin by identifying the meaning of the term “brand bidding.” Brand bidding is when your affiliate partner or your competitor is bidding on your brand’s name. Stated action leads to the ad being displayed on Google, Bing and other search engines. As a result, the ad will appear in a contextual ads section wherever users enter and search your brand's name.
Who commits brand bidding?
As stated before, brand bidding can be committed by your affiliate partners and your competitors. However, for the purposes of this article, we focus on the most damaging threat: your affiliate partners, who are looking for an easy way to earn money. To unfold the threats and damages, which are caused by your affiliates committing brand bidding, let’s start by looking at a specific example of how brand bidding works.
Example of Brand Bidding:
Imagine that you are a company called “Burger Queen”, and you have an affiliate program. Publisher A decides to start working with you, so he sets up a Google ads campaign and bids on your branded keywords, such as “Burger Queen,” “Burger Queen discount,” “Burger Queen coupon,” etc. Therefore, whenever people are Googling stated branded keywords, the ad of the affiliate will be displayed to them. Ideally, people will click on the ad, make an action, and you will get your profit, which you can share with Publisher A.
Sounds like a perfect plan, right? However, there are several fundamental problems with the stated approach.
The problem with Brand Bidding
Problem #1: Wasted marketing budget
Let's say that you are investing money into other marketing channels. For example, Burger Queen might invest money into TV ads, sponsor football teams or perhaps partner up with a celebrity and create a promotion campaign. The popularity of Burger Queen is growing, the brand name is becoming more recognizable, and people are searching for the brand's name more frequently.
When publishers bid on the branded keywords related to Burger Queen, it makes it easy for them to attract clients because the brand name is popular and recognizable. We have a logical question: Why should the publisher be allowed to benefit from your brand's name into which you have invested the money? It would be best if you prohibited your publishers from bidding on your branded keywords to encourage creativity and originality so that they will attract new customers without the usage of your brand name.
Problem #2: Attribution issue
Based on the collected data, the first ad on a Google search engine which the user sees has an 8% click-through rate, meaning that 8% of users will click on the displayed ad instead of scrolling through. The first non-ad results have a significantly higher click-through rate, which is over 30%. Therefore, you might make a conclusion that brand bidding is not very harmful since only 8% of users will click on the ad, and most of the users will scroll through and click on the website with your landing page.
However, the problem with brand bidding is that users are specifically searching for your brand, and it is highly unlikely that they will notice whether a result is an ad or an organic page, so they’ll click on whatever they see first. The most recent study shows that 60% of users do not notice and recognize the difference between ads and organic pages.
As a result, more than 30% of users who are searching for your brand and can already be considered your targeted audience will get to your website through brand bidding ads created by your affiliate. Therefore, you will have to waste your marketing budget on unnecessary and undeserved commissions, which you will have to pay to dishonest affiliates.
How difficult can it be to detect and combat brand bidding?
The most fundamental problem with brand bidding lies in the fact that it is difficult to detect fraud. It is difficult to detect fraud for three main reasons: Multiple countries. If your company works across multiple countries, it means that your affiliate manager has to turn on a VPN in each country and type 20-50 branded keywords to find the fraud. The matter can be complicated further if there are multiple languages in one country. Fraud is committed when you are not active. Based on our internal research, 30% of brand bidding fraud is committed at night or on the weekend when your affiliate manager is not active. Fraud is hidden. Affiliates can hide their fraud behind cloaks or by blocking certain devices (OC, desktop). It can be concluded that it is highly complicated to combat fraud manually, and automated solutions must be used to combat the fraud efficiently.
Benefits from using BluePear – brand bidding detection tool.
Bluepear helps you to combat the problem of brand bidding in two simple steps. Monitoring of your branded keywords 24/7 across multiple GEOs, in multiple languages and across several devices. Whenever brand bidding is detected, the system takes screenshots of the ad and the landing page where the ad leads. As a result, BluePear helps you detect brand bidding and catch affiliates who are committing dishonest acts. Furthermore, you can present affiliate evidence that they have committed a breach and end a relationship with them.
We have explicitly described why we believe you should prohibit your affiliate from doing brand bidding. Therefore, the first step would be introducing anti-brand bidding rules into your affiliate terms and conditions. The second step would be close monitoring of your affiliates. As we have stated, it is almost impossible to monitor the activity of your affiliate manual. Hence why we have created a service which will save you time and money. To get a free one-week trial and measure how much money you might be losing to affiliates committing brand bidding, use the link to get in touch with our sales manager.