How much budget should a company allocate on SEA Brand?

Over the past 18 months, we have focused on improving efficiency. This has also involved reevaluating marketing campaigns and adjusting budgets. When examining SEA accounts, I noticed significant budgets (1 - 10 million euros per year) allocated to SEA Brand campaigns using traditional campaign structures. It made me wonder if such large budgets are still relevant and effective in today's landscape.

The SEA accounts I reviewed had a total budget of 10 - 100 million euros over the past 12 months. This budget was divided among Brand (text ads), Non-Brand (text ads), Display, Video, and additional Google Shopping campaigns in the e-commerce sector. On average, retail brands, product brands, and SaaS models allocated 10 - 30% of their total SEA budget to SEA Brand campaigns, with an impression share of nearly 95%. This indicated a heavy reliance on Google's recommendation to maximize brand visibility in search engines.

To illustrate, here are three examples of SEA Brand campaigns in a SaaS model, a retail brand, and a product brand, all likely achieving an impression share of over 90%.
‍

Mobile:

‍

Desktop (rotating):

‍

When advertisers first start their SEA activities, it is common practice to launch a Brand campaign. This is because click prices are low, the budget represents only a fraction of the total SEA budget, and it usually yields the most efficient results. For externally managed accounts, it is also a favorable campaign as it showcases the overall efficiency of Google Ads activities, similar to PMax. A common argument for Brand text ads is to outperform brand bidding competitors.

In recent years, auction prices for brand-related keywords have become more challenging. Particularly in the Dutch auction, I have doubts regarding Brand terms. Just recently, I observed double-digit cent click prices on a Brand campaign for a completely new brand with a fantasy name.

It feels like Google has introduced minimum prices for brand terms. Despite higher competition, the quality of successful brands should not have declined - quite the opposite. However, I frequently see CPC increases of 1000% or more over a 10-year time frame. Starting in the single-digit cent range, Brand click prices now range in the high double-digit cent range, and occasionally even reach 1-2 euros per click. Apparently, many advertisers do not feel the pain is significant enough, or the campaign still contributes to the overall efficiency of the account, which is why this campaign is rarely questioned. Especially in the agency field, this campaign carries high emotions.

I believe that every advertiser should question the necessity of such campaigns and massive budgets for Brand text ads at a certain level. Even in the case of a product brand mentioned above, it is worth considering whether to compete with a retail partner? I understand that the product brand wants to generate D2C revenue and establish direct customer relationships. The question is at what cost and at which phase of the customer relationship. Are product brands attracting mainly new customers or existing customers who already want to see the full range of products from the brand? Should they leave margin with Google or perhaps encourage some customers to place orders with the retail partner and reallocate the freed-up budget to acquire new customers through other channels? Similar questions should be considered from the perspective of retailers and SaaS providers as well.

In the next blog post, I will describe how we approach these questions in our projects, the hypotheses we formulate, how to set up experiments, and the recommended technologies, metrics, and time series analysis to address these questions.