Study: Non-branded keywords have 19x worse return than branded keywords
The branded vs non-branded results are in! And there’s a lot to be said about where B2B marketers are putting their Google Search Ads budget.
On average, B2B marketers are spending 82% of their Google Search Ads budget on non-branded terms, but seeing a Return on Ad Spend of just 68%, while branded campaigns with 18% of the budget are driving a 1299% return - which is 19x more!
These stats were revealed in a Dreamdata analysis of aggregated customer data using data-driven attribution modelling on Closed Won deals.
In this blog post, we take a closer look at the results and try to understand why this is happening and what we can do to fix it.
Branded and non-branded keywords
Let’s start with the essentials, definitions:
Branded terms include the name of your brand on the keyword, e.g. ‘Dreamdata B2B attribution.’
In this way, branded keywords capture demand you have already created. These keywords pop up for searches made by people who have heard of you before they took to Google and include your brand’s name and any variations of it. Which means success here is a direct result of your other go-to-market efforts.
Most of the time these keywords rank organically, but form part of paid campaigns to protect the brand from competitors bidding on the terms and stealing your traffic (often referred to as the Google Tax).
Non-branded terms don’t include the brand name, e.g. ‘B2B attribution.’
Non-branded keywords are your opportunity for demand generation. These keywords are terms related to your category that are optimized in the hopes of attracting leads who may be interested in your product or service.
Disagreements with how the terms are used
These terms are not without controversy.
Firstly, it’s often observed that marketers include (deliberately or not) branded campaigns as part of their Google Search Ads reporting, leading to inflated results.
Secondly, concerns are often aired around bidding on competitors’ branded terms, as well as on whether to spend budget on your own branded terms at all - even if it’s to protect your brand.
That’s why we decided to take a look at the data and see what light it shines on the issue.
Branded vs. non-branded: the results
But how do B2B marketers split their ad budget between these two keyword types? And what return do they generate?
We’ve crunched the numbers, and here’s what we’ve found.
Average budget spend between branded and non-branded Google Search campaigns
The average ad budget for Google Search is split 18% branded keywords and 82% non-branded.
There are some explanations for this difference:
There’s a narrower spread of branded terms. That is, branded keywords are a finite resource, there are only so many ways you can slap your brand name onto keywords.
Branded keywords cost less as there’s lower competition on these words - our data shows that the average CPC is 5.5 EUR for branded and 21.1 EUR for non-branded keywords.
Marketers put a greater focus on the demand generation associated with non-branded keywords.
Now, if marketers are pouring such great amounts into non-branded campaigns they’re probably generating great returns… right?
2. Return on Ad Spend (ROAS) branded vs non-branded campaigns
When it comes to Return on Ad Spend, our data shows that branded terms generated 1299% ROAS, while non-branded terms generated 68% ROAS.
While some of this differential can be explained by: 1) branded keywords costing less (as mentioned above) and 2) there being a greater chance of conversion (as branded keywords are by definition further down the funnel) it cannot explain away the poor ROAS on non-branded terms - especially, when we consider the size of the budget that’s poured into non-branded terms.
Of course, not all non-branded terms are pulling in a negative ROAS. That’s why it’s essential to pour your budget into the ones that are and divest from the ones that aren’t (more on how to do this in the video below).
Reporting ignorance or deceit?
The data leaves us with the obvious question: why are marketers okay with putting so much money into non-branded terms with little return?
First, it could be that marketers are ignorant of the issue. That is, they’re not splitting their reporting, or, they are not measuring the impact of their search campaigns against revenue, leaving them unaware of the poor performance.
Alternatively, it could be that some marketers are just unable to get their non-branded campaigns to work and are incentivized to mask results by combining branded and non-branded reporting.
It could even be, as Deivis Rupslaukis, founder DERU Digital, points out, that “Agencies or Freelancers might want to inflate their performance and kind of report both combined on purpose.”.
Regardless of whether it’s a result of ignorance or deception, marketers need to be aware of their campaign performance and reevaluate how they are measuring it.
Evaluate non-branded performance only
For starters, as Deivis emphasises, “you should always evaluate Google Ads based on non-brand terms as only this shows you how efficient the channel really is. Brand terms will only inflate it, because brand terms obviously convert at a much higher rate.”
To do this, Deivis suggests:
Create a separate campaign just for brand terms. This simply will make your reporting easier.
Exclude your brand terms from non-brand campaigns - make a shared library negative keyword list.
There’s even a case to be made about whether or not you should even run branded campaigns, as this traffic might end up on your site organically - regardless of competitors bidding on your brand terms.
Measure ad performance against revenue
Beyond that, you need to be measuring your campaigns (and all your marketing activities for that matter) against revenue. Too many B2B marketers continue reporting and measuring leading metrics like clicks and impressions and as a result are left unable to properly optimize their non-branded keyword strategy on revenue.
Focusing on revenue allows you to optimize towards the non-branded keywords which have performed best in generating revenue, and scrapping those campaigns that have had no impact on the bottom line.
While of course still leaving something for experimentation - after all, we still need to adapt to market changes and find the next golden egg laying geese. Check out this conversation on experimentation →
And the reason they’re not doing this is because the B2B customer journey makes it very hard to connect activity to revenue.
The typical B2B customer journey involves multiple touches, across multiple channels, by multiple stakeholders over multiple months.
So how do we fix this?
The solution: connect your ad campaigns to revenue
To close the gap between ad spend and return, you need to track the end-to-end B2B customer journey to know exactly what efforts lead to closed won deals.
To do that, you need to connect every tool on the go-to-market tech stack - from your ad platforms to your automation tools and CRM. You then need to clean and model that data so you can see what activities are actually impacting the buying journey.
All of this can either be built for yourself or bought off the shelf with a solution like Dreamdata, which even has a filter specifically for seeing brand vs non-brand performance.
Once you’ve got this infrastructure in place, you’re able to dig down into every single keyword of every single campaign in every channel and accurately track their ROAS. Which will ultimately lead to improved performance based on real business outcomes.
No more having to mask poorly performing campaigns, as you’d have put your budget where it’s most needed.
A final word
The data from Dreamdata’s analysis highlights a critical inefficiency in B2B marketing strategies.
B2B marketers are allocating 82% of their Google Search budget to non-branded terms, which yield 68% ROAS on average. To be clear, ROAS below 100% means losing money for every dollar invested!
Conversely, branded campaigns, which receive 18% of the budget, achieve 1299% ROAS.
However, branded search is a finite resource. In fact, the success of branded search ads is typically the result of all the other go-to-market activities you’re running - as branded terms are, by definition, capturing existing demand.
A key takeaway from this is the need for marketers to evaluate Google Ads based on non-branded terms to understand the true efficiency of their channels. Branded terms, which naturally convert at higher rates, can inflate perceived performance.
That’s why marketers should separate branded and non-branded campaigns in their reporting and focus on measuring performance against revenue rather than just clicks and impressions.
This can only be done effectively by connecting all marketing activities to revenue with solutions like Dreamdata. Marketers can then reallocate their budgets more effectively, improve their ROAS, and ultimately drive better business outcomes.