2nd February 2020My Blog

 As of September 14, 2019, Google will stop brand surveillance in Europe. Advertisers have the opportunity to book foreign brand terms and to advertise their own products there. Germany is thus part of a list of countries in which this is already possible. This will have far-reaching effects for the German online world.

So far, it has been common practice for agencies to carry out brand bidding for their customers and to buy traffic on the brand terms at a minimum price. With this privilege, the agencies currently make a large part of their income. With the falling brand surveillance, agencies will no longer be able to buy traffic at the minimum price, as they will have to bid against a plethora of competitors in the bidding process for every single click. Brand keywords are high in conversion and the sudden competition will cause click prices to explode in this area. The agencies will have to download now over on the previously extremely cheap brand traffic in the shortest possible time.

The whole thing only gets exciting when you look at how these processes and CPCs affect other areas! For this we have commented on a small list of the expectations and the obvious impact of the new brand guidelines for / from the perspective of various market parties.

THE EXPECTATIONS / EFFECTS FROM THE PERSPECTIVE OF THE MERCHANT:

The merchant's expectations are first of all to obtain the same results at the same cost. The merchant generally does not care how these expectations are met, since he has a service provider (agency) for this job. Possibly. there are long-term contracts with clear target agreements anyway. If the service provider cannot meet the expectations, you will try to increase the pressure and possibly consider a change of service provider or changes to the concept. All in all, the merchant will have no interest in bearing the additional costs in the area of ​​brand keywords. Nevertheless, the merchant is faced with the situation that competitors can now stand in front of his brand by simply paying better for the brand traffic.

THE AGENCY'S EXPECTATIONS / EFFECTS:

The agency will expect others to bear the additional costs resulting from the changes. The agency will first look for models to pass the additional costs on to other parties.

Many agencies are so-called "full-service agencies" which generally offer five different areas of online marketing for customers:
search engine optimization (SEO), search engine marketing (SEM), display, email marketing and advertising as well as affiliate marketing.

With SEM, agencies are often remunerated as a percentage of the total net turnover generated by SEM. If the customer spends more here, the agencies earn more. However, since a target CPO ergo target CPC is usually defined, which must not be exceeded, the agencies will have to struggle with higher CPCs. In addition, it was often the case that agencies generated a significant part of their income from the fire clearance. Sometimes the contracts here were so one-sided that the agencies received a generous CPO per sale and more than covered the money that Google needed to bid on the brand or that the customer paid for it anyway. Or an increase in the percentage of total net sales over the SEM channel (or SEA for which they are now screaming), the lower the average CPC on the entire campaign dropped. In fact, many agencies have cross-subsidized many other areas such as affiliate marketing with the additional income that brand bidding has brought you.