Return on investment and on-brand search ads

Before you start any kind of online advertising, you need to do some preliminary work. You need to figure out how you will define a conversion, how much revenue (or profit) you will assign to that conversion and use those numbers to build a return on investment equation. When you start tracking return on investment, it’s important to point sales back to the medium that actually brought them in. This can get a little tricky.

If your company invests in Google Ads, there’s a good chance that you run campaigns on your brand. Consider this example where the Google query “google ads” shows an ad for Google Ads’ official site:

In this case, Google is running an ad campaign for on-brand searches. If you search ‘google ads’, you’ll get an ad for their official site. Let’s say that you click on the top link, the ad and start running campaigns. Where should Google assign the revenue for ROI purposes?

Usually if someone clicks an advertisement and buys something, you assign that revenue to that medium. But with on-brand searches, you should remove that revenue from return on investment calculations. You should remove it because someone knew who you were, knew you solved a problem and had already decided they wanted to learn about you. They would have clicked an organic link just as happily as they would have clicked a link.

So, does this mean that you shouldn’t buy ads for on-brand searches? As in everything, that depends. Again, consider the photo above. The third result is for Wordstream, another company. If you’re really popular and have a good brand, you have to assume that your competitors might run brands against your on-brand searches. If that happens, running ads is a good way to keep the competitor from poaching your sales.

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