Merchants: Why Block Affiliates From Brand Name Keyword Bidding?

Before I begin this rant, discussion, let me say that I sit on both sides of this fence. I’m an affiliate who likes to send traffic via brand name keywords, and I’m a merchant who has affiliates that drive traffic via my products’ brand name keywords.

It seems like a default setting for merchants at many networks that when asked “What will be your policy on brand name keyword bidding?”, they select “NONE – no one can bid on any keyword that involves our brand name?”.

Now I get it…

You’ve worked hard to establish your brand, and there’s no reason to give away a percentage of revenue in commission to an affiliate who’s just showing searchers to your website which, searching the product name, they would have found anyway!

You probably envision a situation like this happening, if keyword bidding is allowed:

Your Brand Name Bidding Nightmare

A searcher searches “product name” and your site comes up somewhere in either the paid or organic listing. With even one other ad of an affiliate who’s bidding on the term, that searcher clicks the affiliate’s ad instead of yours, and ends up getting to your website anyway to make the purchase, but you had to give that affiliate a commission. What a WASTE!

That can be the only reason, right? That’s the only way you can lose money and the only scenario that keyword bidding can be a bad idea, right?

Unfortunately, the above scenario rests on some, I believe, incorrect assumptions. Further, I’m about to explain why I think blocking brand name keyword bidding is a bad, revenue damaging decision for any business who runs an affiliate program.

First let’s add the disclaimer that the following does NOT consider “direct linking”, in which the affiliate adds no value and hence the above scenario is likely. Merchant’s reading: Ban direct linking with vigor… just don’t throw the baby out with the bath water…

Really So Scary?

Let’s say a searcher types into Google:

“product name” – your product.

They see 2 ads, yours the official website, and an affiliate’s with a URL like:

WhateverReviews.com/ProductName

You worry that this person is going to click on EITHER that affiliate’s site or yours, right? You believe that if the affiliate’s ad doesn’t exist, the searcher will have to click on yours and you won’t need to give away commission, right?

But you are leaving out one option the searcher has… To click NOTHING.

Why do you think that if the “WhateverReviews.com/ProductName” URL isn’t there, the searcher is going to click on YOUR link.

Think About The “Maybes”

Newsflash: Many searchers who enter a product name (a “brand keyword”) DON’T WANT to hear from the company selling the product. Not straight away anyway. Maybe they already have seen your company’s sales message. Maybe they’re looking for some independent information on the product. Maybe they want to see a review? Maybe they want to look for discounts or coupons? Maybe they want to see information from people who have used the product before they purchase?

Maybe with no “reviews” clearly visible they not only won’t click the company’s website instead, they flat out won’t buy the product from anywhere. Maybe they’ll think “Hmm weird, I can’t find any reviews on the product, maybe it isn’t so popular… maybe it’s not good enough for people to provide feedback on?” Remember, if you’re blocking brand name bidding, affiliates can’t even bid on the keyword “product name reviews”… so what happens? Your customers go looking for reviews and they can’t find any? Or worse, they find NEGATIVE reviews? Your affiliates aren’t generally going to write negative reviews about your product are they? They want to sell you! So you’re blocking out hundreds, maybe thousands of people who want to write positive reviews of your product!

Of course these are all “maybes”, but my point is that these “maybes” exist. And there are far more than those listed above.

But this goes far deeper.

Think about this…

What’s Your ROI?

An affiliate wants to PAY MONEY to buy traffic to send to your site. When they buy traffic, you don’t have to pay anything… it’s free. The cost of the traffic you’re getting is the commission you pay them. Let’s say you pay 20% commission. What other forms of advertising and marketing do you do? How many others bring you no effort visitors and customers where the cost of acquisition is only 20% of the sale value? OR what other methods of marketing do you use where you don’t pay for the traffic unless sales are actually made? You don’t pay out an affiliate unless a product is sold right?

Not to mention, if you are also bidding on your own brand name keywords… why? You could cut out your ad cost completely and let affiliates advertise for you. Unless your Ad campaign was doing better than $1 for every 0.20c you spent, it’s not worth it. Furthermore, this assumes there’s just one other affiliate. Who’s going to make more sales? You with one single campaign or 5 affiliates with a campaign each? It’s even likely those affiliates are better at PPC than whoever it is who runs your marketing department.

I happily let affiliates bid on my product name keywords. Some of them compete to make sales on razor tight margins with ad campaigns that it wouldn’t be worth it for me to even test. But when they send traffic to me, my margin is 50% – the 50% cost is what I pay to the affiliate in commission. And it took none of my work.

It doesn’t even stop there.

Them: “I Want To Promote You Please”. You: “Thanks, But No Thanks”

When you as a merchant, stop brand name keyword bidding, you drive potential affiliates away. Affiliates look through hundreds of offers each day and if you’re serious about your online marketing, you’re hoping that some of them will pick yours to promote.

Affiliates love brand name bidding… the conversions are great and they can make big ROI. They’re dying to find offers that will convert well for their money spent, and if you cut out brand bidding, you cut out another reason for affiliates to be attracted to your offer.

What’s more, affiliates who want to bid on brand name terms are EXPERIENCED affiliates. They want to send you real, quality traffic and they know it will convert. You’re not just driving affiliates away, you’re driving EXPERIENCED affiliates away. If you have an affiliate program you know that your affiliates will follow an 80/20 rule. Possibly even less – 90/10. I mean 10% of your affiliates will make 90% of your total affiliate sales. And that 10% are the EXPERIENCED ones… the ones you’re driving away by blocking brand name bidding.

Furthermore, picture this scenario. As an affiliate, this is what I’ll do regularly.

When brand name keyword bidding is allowed, I’ll start my campaign out there. If I make sales of the product, I get excited. I see it’s a great offer and what do I do… I look for ways to EXPAND THE CAMPAIGN.

I think “Hey, if these brand name keywords are converting like this and I’ve got this much room to move on my margins, maybe some less targeted terms will convert too”, so I start testing all the keywords that you as a merchant WANT me to bid on… all the ones that don’t contain your brand.

Bottom Line

I just can’t see how long term, the tiny amount of money you think you’re saving on the front end by not paying affiliates commissions on your brand name keywords is going to be MORE than the money you’re losing over the entire future of your business by turning away experienced, quality affiliates who are dying to do the work you’re never going to be able to do (provide unbiased reviews, insider information, bonuses, etc) in selling your product.

Don’t just believe me though. Test it out. Not for a week where sure, you might notice a minor drop in profit if you’re terribly unlucky, but for a year, so the long term benefit can really filter through.

And let me know when you do. I’d love to promote your product.