Google To Prohibit Bidding On Competitor Names?

You may have noticed a recent addition to the organic search results in Google when searching on a brand name or brand URL. A search for www.bestbuy.com serves as a great example. See the search box in the organic listing labeled Best Buy? The button next to the search box invites me to “Search bestbuy.com”. The addition of this search box has created quite a stir in the eCommerce community. Working through a likely search scenario demonstrates the cause for concern.

Say I’m in the market for a battery for my HP laptop. I shop Best Buy often and I enter www.bestbuy.com in the Google search box. A search for “Best Buy” works as well. I then enter “hp laptop battery” in the search box in this organic listing and click the accompanying button. Whoa! Instead of going to the Best Buy site, I’m served a SERP loaded with PPC ads. The top result is an ad for “HP Official Store’. There are two more PPC ads positioned atop the page. Chances are very good that I’ll click on the top ad, and possibly all three PPC ads in the upper left before scanning the page for an organic result from Best Buy.

If I’m Best Buy, I’m losing a potential customer to the PPC ads on this second SERP. My reaction? Buy the top spot for “hp laptop battery” to counter the competition. The result? Bid competition for “hp laptop battery” heats up, and advertisers on that keyword phrase pay higher CPC’s. The benefit to Google is obvious, as is the detriment to Best Buy.

Why Google has added this feature is speculation, but two scenarios come to mind. The first being, Google is phasing out the ability to bid on competitor brand names. Yahoo! and Microsoft adCenter don’t allow bidding on competitor names. If Google follows suit they lose a ton of click income. The new organic listing search box helps replace that lost income.

The second, and more likely reason, is to generate more PPC ad clicks outright. Clicking on a standard organic listing doesn’t bring any click income to Google. The new search box enabled organic listings facilitate the possibility of generating a second SERP filled with PPC ads – a second opportunity for Google to charge for a click on a PPC ad.

This organic listing search box will certainly impact PPC account management. Look for more aggressive bidding on branded terms. Budget allocations for branded terms will increase as managers ensure their client’s PPC ads will compete with the organic listings 100% of the time. Any way you slice and dice this, Google generates more paid clicks. Brilliant!