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  1. #1
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    Bidding Above Advertisers
    Been seeing some desperate publishers bidding relentlessly above the advertisers on their own brand name keywords. Worse yet, some blindly use Overture's fixed-position bidding feature to maintain a costly #1 position, recursively jacking up bid amount to a lose-lose situation (i.e. either you don't have excessive money to put yourself in the front, or the more traffic you get the more severely you bleed).

    If one believes a dominating affiliate brand will be built by such practice, think again. There will always be an abundant supply of aggressive affiliates joining the party. As a publisher, you do not own a lasting brand. The moment you stop bleeding, your so-called affiliate brand ceases to be on shoppers' radar, unless your major traffic is through SEO (in which case there is no reason for such money wasting practice). Eventually, the advertisers got fed up with having to pay a fortune for their own brand name keywords and had to enforce their "forbid brand name bidding" policy. It's okay to be somewhat greedy in a capitalist world but not shortsightedly greedy.

  2. #2
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    Are you a merchant or affiliate? Why the post, seems you're upset with somebody.

  3. #3
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    I'm a publisher. Maybe it sounded too much of a vent. No I wasn't mad at someone. But yes I was frustrated after being told recently by an advertiser that they had to forbid PPC on their brand due to some relentless "got to be #1" practice. Just wanted to point out that if you want to be in the affiliate business for long and be sustainably profitable, blindly outbidding everyone else including the adverter on their own brand name keywords just isn't a rational practice. As an advertiser, one could justify a high-cost bid as the PPC ad can be categorized as a long-term brand building investment. That isn't the case for a publisher bidding on an advertiser's brand.

  4. #4
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    As far as TM bidding some merchants allow it and some don't. But whether they do or not they should enforce it across the board. As far as:

    "That isn't the case for a publisher bidding on an advertiser's brand."

    Well it might be. Let's try this example. I don't know if Office Depot allows TM bidding or not but let's say they do and you have an affiliate bidding on their TM and they have coupons available. Somebody finds the affiliate site thru them bidding on the Office Depot TM. They click thru one of the coupon links they have available and save $30 off $150 and get free shipping too. That person saved money, had a good experience, next time they want to go shopping at Office Depot there's a good chance they'll go right back to that affiliate site, maybe they boookmarked it. Maybe after they saved money at Office Depot they remember the site and start shopping at other merchants thru that site. Maybe that TM PPC bid just snagged that affiliate a life long customer. So long term they could make that high PPC spend back over and over again.

  5. #5
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Trademark couponers and PPCSE hawking seem to go hand in hand. A firm like Office Depot has no legit non-incent affiliates, since their AM has selected to ruin their chances of earning commissions by playing the great cookie cannon game.
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  6. #6
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    TN1, your analysis is sensible. But in general it doesn't apply well in the situations I was referring to. Diligent publishers smell blood fast. You can hardly find any sale converting brand names associated with affiliate programs from major network not being fiercely bidded already. This means that one has to pay a huge price, often at a loss, in order to outbid competitors and the advertisers. Bidding at a loss against the brand name owner as a brand building strategy by a publisher simply won't sustain. I would argue that the justifiable costs of building a brand on a brand name as the advertiser versus as a publisher isn't at the same level. Even deep-pocket players like shopping.com, bizrate.com usaully bid humbly behind the brand name owners. To build a brand as a publisher, there are more cost-effective ways, such as viral marketing via mailing lists, PPC ads on cheap keywords, etc.

  7. #7
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    Well, the thing is you don't know if they're making money or not. I have no idea how affiliates bidding on a lot of merchants TM are doing, neither do you. We can just guess. Also you don't know how much they're bidding. Maybe they have a higher CTR than other affiliates and have top positions because of that. Most wouldn't stay too long with campaigns if they were losing money. They could also incorporate the other ideas you have for building their brand. I do PPC to make money and stop campaigns that cost me. If other affiliates do PPC and lose money, that's fine with me, doesn't affect me. Another discussion is should merchants allow TM bidding. I can come with good arguments for both sides. Take Golfsmith for example, they used to allow TM bidding, now they don't. Now look:

    http://www.google.com/search?sourcei...en&q=golfsmith

    So instead of their affiliates bidding on their TM, their competitors are. I would rather have that space occupied my own affiliates than my competition.

  8. #8
    Resident Genius and Staunch Capitalist Leader's Avatar
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    Also you don't know how much they're bidding. Maybe they have a higher CTR than other affiliates and have top positions because of that.
    He said Overture. Yahooverture's bid tool spills the beans.

    I'm with Xdude on this one. For a lot of keywords/phrases, maintaining a higher bid than the merchant do is akin to playing "chicken" against a tank! If there's some big behemoth merchant in the mix the result is pretty much inevitable.

    But more generally, I think all those people paying a huge amount per click to push low-priced items are NUTS and that includes a lot of merchants, too, for that matter!
    I used to watch who was bidding high and the amount of churn in some of the top spots is tremendous. Yet as soon as one blows through their money, another sucker takes his/her place and the insanity continues.

    The Market will penalize those who blindly engage in such activity. Keyword here is "blindly." There are lots of people who seem to get so darned addicted to that #1 spot that they don't realize that they're losing serious money until the day Over pulls the plug on their account.

    I used to run the calculations and figured the customer would have to come back something like 20 times before the break-even on some of the bids I saw! But, the kind of items the bidwars were on, would NOT be things that would bring many return visits. Currently, the bids are even more outrageous than they were when I did those calculations.

    When it comes to the merchant's own brand name, I wonder what's with these merchants who actually bidwar their own affiliates. What on Earth are they smoking?! They could end the bidwar instantly, just by saying "no outbidding us on our brand name." They wouldn't have to forbid *all* bidding on it--just insist that they not be outbid.

  9. #9
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    Quote Originally Posted by TrustNo1
    I do PPC to make money and stop campaigns that cost me. If other affiliates do PPC and lose money, that's fine with me, doesn't affect me.
    Irrational practice does affect you. Either you have to bid much higher to acquire traffic, retreat from bidding on the keywords, or receive a "see you later, no more bidding" note from the advertiser. When such practice gets more and more common, you will likely have a lot of campaigns to stop.

    Quote Originally Posted by Leader
    I wonder what's with these merchants who actually bidwar their own affiliates. What on Earth are they smoking?!
    Could it be egoism? Must be delightful to see a bunch of publishers bidding fanatically on your brand name at $3.99 a click ... But then wouldn't it be more ecstatic to see a paddle of ducks swamping to line up behind you at a 24-hour warning note? So, indeed it's a mystery.

  10. #10
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    Could it be egoism?
    Actually, the practice can be in the best intrest of the merchant. If your affiliates aren't there, your competitor's might be. Personally, if I were one of those merchants, I'd pull my ad and let my affiliates duke it out. Your brand is still safe from competitor poaching and it costs you far less than bidding on your own name (if idiots are pushing the bids up).

  11. #11
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    True, but most advertisers simply can't stand not being the top bidders for their own brands. I guess the main objective is to ensure authenticity of the top ad along with filler ads by its publishers.

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