The brand effect of queries and advertisements in keyword advertising

In this paper, we analyze the relationship between performance and the use of brand terms in queries and advertisement in keyword advertising campaigns. We use data comprised of more than 2,500,000 daily records from a keyword advertising campaign of a major US retailer. The campaign spanned nearly four years, involved approximately eight million US dollars in advertising cost, and generated more than twenty-three million US dollars in sales. We categorize keyphrases and advertisements as either brand focused or nonbrand focused. Using ANOVA in a 2x2 design, we analyze the use of branded terms on the critical keyword advertising metrics of number of clicks, cost per click, sales revenue generated, number of orders, number of items ordered, and return on advertising cost, as well as impressions triggered by these keyphrases. Therefore, we investigate a significant spectrum of user actions and consumer behaviors of a sponsored search campaign. Our findings show that there is a significant advantage by matching branding terms in keyphrases and advertisements relative to any other combination of query or ad for all metrics examined. A combination of a branded phrase and a branded ad generated 15 times higher sales revenue than any other category. Therefore, a focus by keyword advertisers on branded terms for search engine ads could be quite beneficial for both the effectiveness and efficiency of keyword advertising. The implications for online advertising and keyword search in the ecommerce domain, especially for large retailers, is that brand mentions in both queries and advertisements correlate with higher conversions.