A legendary anecdote by Restoration Hardware CEO Gary Friedman recounts how, almost 10 years ago, Restoration’s marketing team pushed to double its budget because search ads were converting customers at unbelievably low costs.
Friedman asked which of Restoration Hardware’s 3,200 keywords drove sales.
“Restoration Hardware” was the top performer – followed by 21 common misspellings of “Restoration Hardware.” Together, these keywords accounted for 98% of search ROI. Friedman said he pulled the branded search budget the very next day.
A decade down the line, retailers and ecommerce sellers wrestle with even more complicated branded search systems. Yet, for all the complexity, one thing is straightforward about branded search: how unfair it is for brands.
The branded search squeeze
Google, Amazon and Apple use branded search to control profit margins on their platforms. Put another way, they pretty much charge rent.
Apple, for instance, made changes in 2021 and 2022 to extend search ads to more prominent places, including search results, other app product pages and the App Store homepage. A couple of years before that, Apple began allowing developers to target a competitor’s keywords and app names.
But Amazon is relentless in how it uses branded search data to spur advertisers to spend.
Three legacy CPG marketers told me that Amazon’s core retail business uses Amazon branded search data to convince companies to list on Amazon. For example, the Amazon marketplace team has used public info on where and when TV ads run (like 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 own commercial is driving, and there’s nothing Amazon can do other than reluctantly shuttle customers to your rival. If only you were here. (Or so the pitch goes.)
The branded edge
Amazon is always sharpening its branded search beyond simply allowing direct keyword targeting.
Late last year, Amazon introduced a new metric for branded share of search keywords, which is the rate of clicks that go to a company’s product compared to the total number of clicks on that keyword, explains Bryan Porter, co-founder and chief ecommerce officer of Simple Modern, a drinkware manufacturer.
On the one hand, Amazon’s branded share metric helped Simple Modern feel comfortable not spending to defend its own keywords, since more than 95% of “Simple Modern” searches convert organically.
But the metric is also a savvy way for Amazon to reward sellers who bid for market share growth.
Stanley, a rival manufacturer, released a tumbler last year that went nutso viral on TikTok. Porter said Simple Modern was able to conquest Stanley’s traffic and at times snagged up to 15% share of its competitor’s branded searches, per the new metric.
Branded to the max
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 the Google Display Network, while using Google’s first-party data to optimize and attribute campaigns.
It’s a big ask for advertisers to blindly serve ads to Google Maps, Gmail, YouTube Shorts or potentially other formats they aren’t interested in. But PMax’s toughest sell is actually the loss of branded search controls.
Until last month, PMax had no controls to prevent Google from bidding on branded terms. PMax could target “I want to rebuy Burt’s Bees baby shampoo and wash” and claim a clear-cut organic conversion. With branded search data, PMax could also use cheap display network inventory to retarget people who are close to making a purchase.
So what?
For legacy brands and ecommerce natives, the branded search squeeze is just a way of life. Grumbling about it is a bit like complaining that your knees hurt as you get older.
Remember Friedman’s Restoration Hardware anecdote? That 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.
Shall we call the waaahmbulance?
At my local Duane Reade, my go-to brands of shampoo and body wash are locked behind a plastic shield, which requires me to press a button and wait for an employee to release them. Private-label clones of each sit one shelf over, free from plastic purgatory.
Which is all to say, brands know this treatment. Plus, the search situation is different depending on the brand and on the platform.
Someone looking for “Kleenex” may mean “tissue” and not give a hoot about Kimberly-Clark’s trademark.
Meanwhile, a Google search for “Pampers” could be … anything. Maybe a new mom is doing research. Maybe a high school student is gathering information for a report on Procter & Gamble. Perhaps someone is looking for that commercial that made them cry.
You get the point.
But an Amazon search for “Pampers” is probably someone who’s about to smash the buy button on diapers.
Which means that there is no longer a “search” strategy, with a focus on Google that extends to Bing and other search engines. Now, there is a Google search plan, an Amazon search plan and an Apple App Store plan, each with its own keywords and tactics.
Oversearched
Even if advertisers accept that the branded search squeeze is inevitable, platforms can still take things too far and risk damaging their reputation with customers and advertisers.
Since Apple rolled out search ads with no-holds-barred competitive targeting, the App Store charts have ossified. Any app with wind in its sails is keyword-targeted to death by larger apps, sometimes not even competitively but just to find people who are 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, rocketed up the App Store rankings practically overnight. No degree of organic love can push an app that high without a serious Apple Search budget.
Some Amazon advertisers can do without branded search budgets, but the platform is still bending under the weight of its ad inventory.
An Amazon seller can spend $0 on branded search terms and still make it work, Simple Modern’s Porter said. Amazon’s algorithm, for instance, prioritizes price, how effectively an item ships, the seller’s history of on-time orders and good reviews, among other factors.
But customers notice the branded search deluge.
Amazon’s overaggressive search advertising broke out of the trade press and into general tech and consumer news recently. “Basically everything on Amazon has become an ad,” wrote Jason Del Rey at Vox last November. In January, John Herrman of New York Mag pondered: “Why does it feel like Amazon is making itself worse?”
Wall Street analysts are concerned that a sharp downtick in Amazon’s customer satisfaction scores are due not to COVID measures, Amazon Prime price hikes or even bad PR, like Amazon’s union and labor controversies, but rather to changes to its search engine.
Google has already overextended and been forced to retreat on some of its branded search moves.
Over the past two months, Google introduced controls so that PMax advertisers can block Google from buying branded search terms and avoid certain terms on brand suitability grounds. (AdExchanger Commerce newsletter readers had that news first.)
A brand that makes faux-leather products can now avoid searches for, say, “fox fur coat,” even if PMax sees a conversion in the offing.
Plus, PMax can finally be blocked from bidding directly on a brand’s name.
A branded bridge too far?
Some brands and retailers have spent millions to test branded search keywords only to discover they’re better off saving the budget and focusing on organic conversions.
For Google to buy those same keywords and claim the conversions was beyond the pale.
But despite Google’s PMax concessions, don’t expect the branded search squeeze to loosen.
Brands begrudge paying rent to Amazon and Google. Developers hate being frozen on Apple’s App Store leaderboard.
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 branded search on Amazon. Instead, the brand is spending more to go after its rivals’ keywords.
But isn’t that branded search? Just somebody else’s branded search?
“Yes, true,” Porter said. “I guess I would much rather spend money on our competition’s branded search than our own.”
The squeeze goes on.
