When it comes to paid advertising, at the end of the day, it is all about making a profit. Let’s first discuss the different ways paid ads can help an ecommerce store make profit.
New customers are the costliest to acquire as they are often entertaining the offers of your competitors or just haven’t made up their minds yet. These customers are often where the most time and effort is spent by businesses and advertisers alike.
Returning customers are the cheapest to keep around, but notice I did not say free. Returning customers, particularly those that have only purchased from your store recently or a few times are still at risk of being swept off their feet by other retailers. It could be in the form of a sweet deal, free shipping, or even just a well-placed advertisement.
Until a customer has reached the level of brand loyalty, they are at risk of being picked off by competitors. Often one of the most cost-effective and literally effective ways to prevent this attack on your existing customers is to simply run paid search campaigns for your company and website name.
By running these branded campaigns you ensure that you are filling the potential void that is the #1 ad spot for search queries with your company name and simultaneously prevent competitors from jumping above your organic position. You can see below in the example for a search for Rooms To Go.
This is ideally how Rooms To Go wants their ad to be positioned, to take up as much real estate on the SERPs as possible to ensure anyone searching for their company can find them. However, digging a bit further illustrates the real risk of NOT running Branded campaigns:
On the second page, in the first slot, you can clearly see Wayfair is bidding on the keyword Rooms To Go. Like a predator stalking its prey, Wayfair is just waiting for the chance to siphon off prequalified users for a fraction of the price of keywords such as “home furniture” with a likely higher conversion rate. If the Branded campaign budget runs out, bid modifiers are used to reduce bids, or the campaign is paused, Wayfair and other competitors are sure to pounce on the opportunity.
The real world consequences of not running a Branded campaign indefinitely for your business are apparent. Add to the fact that these clicks are often the cheapest and highest converting clicks you can pay for, it just makes good business sense to run Branded campaigns.
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