Good post

Further to this, i agree with the principle of brand protection in this instance, as in particularly competitive markets this will help keep the competition outside of the top 4 listings.

However, the presence of affiliates here needs to be tightly controlled in terms of Creative, as well as ensuring they maintain their rankings whilst having the minimum possible impact on the own brand campaign costs.

If affiliates are generating £20 Car Insurance Sales, are they cannibalising sales which could have been generated for half the cost on the PPC brand campaign? Robbing Peter to Pay Paul – and give him a Tip!

If this is the case, does this limit the ability of the PPC campaign to actively push on generic terms, because fewer brand conversions at a lower cost will reduce the ability to leverage a strong generic presence on the main terms!

I can see their own advert or at least display url (which doesn’t look to be an affiliate), three affiliate adverts and only a single competitor.

They are ranking at the top naturally and have their own PPC advert. For me, that’s enough brand protection considering they have just one competitor ad. They will be paying affiliates commissions where it’s really not neccessary and are actually directly forcing up their own bids. It looks very messy as well.

There are equally as many examples over in the UK to!.

Thanks for the comments.

I was originally thinking about this through a competitive viewpoint where a business would have to take into account a lot more data such as lifetime value of a customer for instance to see if it makes financial sense to do so.

You make a valid point about the payout. A different payout structure would probably make the most sense, still giving your affiliates an attractive rate for them helping keep the competition away from potential customers and for taking on some added risk from increased marketing costs. The rate would also have to be high enough to cover the increased CPC costs an affiliate would have to pay to show up since their CTR and QS would be lower. The brand keywords should still convert better than non-brand terms, but probably not as high as if they were the official site.

One of those large brands that’s allowing them to bid (in the states) looks like Time Warner Cable. If you’re unfamiliar with the brand they provide cable tv, internet and phone service. They were showing up #3 when I searched along side 6-7 other affiliates. Maybe they’re just proactively being defensive, but more than likely, they’re just acting like many other inefficient utility type of companies.

Nice piece and thanks for the Sphinn.

Actually in my above post, I did mention there is a stronger argument for allowing some affiliates to bid against your brand if there is a lot of competition.

But actually the higher CPC markets where there is most competition against brands is also the market which pays the highest affiliate commissions. Why should an insurance company pay £20 to an affiliate bidding against their brand? I think at least the commission agreement would have to be lowered substantially for the brand referrals. Even then I would argue that a lot of the time group brand bidding would not make sense, just create more noise and cost.

What I have found scary though is that some very large brands have allowed affiliates to bid against their brand with little to no competition – simply to increase volume from affiliates.

Thanks for the comments and discussion!