Table of Contents
Introduction
What follows is very precise and strong criticism of Google, specifically on what is widely known as Branded Paid Search (1). That's why I feel obliged to open with a statement of sincere admiration for them, because I wish to make it clear that the criticism that follows is out of love for the company, but also out of grave concern. More importantly, I would never criticize my favorite company in the world without proposing a constructive solution. If you are an SEM professional, or someone in a leadership role in a company that invests heavily in Paid Search, in-house or agency, chances are you will find this essay thought provoking, and I am hoping, motivating. If so, if it moves you, there are actions to take.
Google enabled the livelihood that has sustained my family for the last 15 years. I am a semantic being. I love words, so I truly love Google, “The Empire of the Key Word”. It's up there on the list of my top 5 brands. I am a "Search Animal". I like to explain it by saying that if "Search" is the "Everglades" then I am an "Alligator". The Google Ads platform feels like home to me. I think it's the best platform ever conceived by humanity. I am proud to call it my main tool of trade, and that’s why it hurts to see it stray from certain key principles.
Google is going through challenging times. It might be on the verge of being broken apart by the DOJ, a move that I strongly oppose (but that's a subject for another time). And after not throwing the first punch in the “AI LLM Chat” product category, being beaten by OpenAI and ChatGPT, Google is now seriously challenged by a host of AI driven search solutions like SearchGPT, , Perplexity, and others. It’s true, Google has launched great counter punches with products like Gemini and NotebookLM, to name a few. It remains to be seen how much Google will be affected as it keeps on dominating as reflected in record breaking quarter earnings, but there is no doubt that we are seeing our search habits changing.
So as Google endures this transformation perhaps it's great timing to share my views on Branded Paid Search- views that have been in gestation for some time now-. If my analysis is able to resonate beyond my own eco chamber, perhaps something can change as part of the overall transformation Google is enduring. Perhaps Google will be able to hear the message and consider the recommendations I put forth. I am not that foolish though, I know the odds are slim at best. But isn't that a reason for trying?
You might already infer that I think the answer to the opening question, if we are paying too much for Branded Paid Search, is yes. But the question is to be asked in plural because I don't have this opinion in isolation. It's the sentiment I have witnessed as an SEM professional throughout my 15 year career, from clients, C-suite execs, and countless fellow colleagues.
How come we pay these high CPC's for people searching for our own brand?
But despite this constant sense of being ripped off, the status quo is destined to remain the same for eons-and-eons-and-eons, unless someone at least tries to change it. The issue is that no one ever has the time, or the will, or to be frank, the foolishness, to tackle such a complex subject head on. Maybe I am that fool that decides to tackle it. But if so, I can't do it alone. I want to make this a community effort, and I need your participation in collectively arriving at the answer.
Are we paying too much for Branded Paid Search?
And if so, what can we do about it?
Perhaps we can all be fools together and present something so coherent to Google that it will be undeniable. I am up for it and I hope you too.
So let's get into the weeds.
The Master of War
I am almost certain that each and every one of us part of the SEM and entrepreneurship community would answer yes to at least one of these questions:
Has Branded Paid Search taken more participation from your Marketing budget in the last year than you expected?
Have you or your team had to reduce Branded spend to assign it to Non Brand, due to a limited budget?
Have you had to completely stop Branded Paid Search for lack of Budget?
Or on the contrary, have you decided, due to a limited budget, to only keep Branded Paid Search running, to the detriment of Non Brand, as you cannot afford to not protect your Brand?
Have you seen more competitors taking on your market share by buying your Brand's keywords? and has this put additional unforeseen pressures into your budget?
Has your Branded CPC skyrocketed due to competitors within your niche bidding against each other's brand keywords?
Have you asked your Agency or In-House team to not put more money into Branded Paid Search (after all the Organic result is there at the top) only to get the following response?...we can, but we don't recommend it, it would leave that space open for your competitors.
In the lifespan of my career I have gone through one of these scenarios at least once for every client (agency or in-house) that I have worked with.
As SEM professionals, we know that soon enough into a client engagement we are going to relive the experience of explaining the not so simple dynamics of Branded Paid Search, eventually, when assaulted by competitors, offering the option to launch a "Competitor Paid Search" campaign to counter those attacks.
These competitor campaigns are widely known in digital marketing agencies as Conquest Campaigns, which will then become a new category in the marketing budget, perhaps not previously contemplated by the client. On the other end of the spectrum many Founders, since inception, have already baked into their thought process the fact that a Conquest Campaign needs to be launched. As an easy tactic to convey advancement, Conquest Campaigns are just part of the status quo in a Startup go to market strategy. That doesn't mean that it’s feasible to manage that tactic well or that they will be profitable.
Conquest is a genius choice of a term, a war related analogy to identify the practice of auctioning for the competition's territory, or branded keywords.
This is how Wikipedia defines Conquest:
"The act of military subjugation of an enemy by force of arms".
And the Oxford English Dictionary:
"The subjugation and assumption of control of a place or people by use of military force".
Business is a lot like war, with competition at the heart of capitalism. While capitalism has been an unbeatable system, it inevitably creates imbalances. One such imbalance, I believe, lies in how Google has structured Branded Paid Search Competition in its current form, making it extremely frictionless to begin an aggression without any guardrails for the attacked, to the point where the inflated cost of war (a bidding war), in probably the majority of the cases absorbed as a loss by all, and only enjoyed as a gain by the enabler: Google, The Master of War.
Tanks at the border
A prospect searches for ‘BlockSurvey’ while 3 competitors place a conquest ad.
More than a million companies in the world today use Google Ads. Probably hundreds of thousands of them, willingly or not so willingly, are actively engaged in Conquest.
Making a simple estimate based on Google's Search only revenue in 2023, $175 Billion, in combination with my own career experience (as Alphabet offers no data on splits per keyword type), the income Google Ads gene
rates from campaigns where the keyword of a brand is involved should be between $30-$60 Billion per year. For the purposes of this effort we are going to settle that number right down the middle at around $45 Billion per year.
In essence this has a truly positive side, the consumer always benefits from the unbeatable quality of capitalism, fierce competition at play, as price and/or quality improve overtime. If a company fails due to its lack of competitiveness, that's the name of the game and the way it should be. As long as several companies remain in the niche providing quality offerings, we all win. But as I will attempt to demonstrate, there is something off in the way Google currently manages it's auctions for Conquest/Branded campaigns, of course, something off for the advertisers, but selfishly beneficial for Google itself, which is cashing in dozens of billions a year from the scheme.
Which company in their right mind would give up even a small slice of that pie? But should a significant proportion of this huge chunk of money be transferred back to the economy by managing the auctions differently?
It’s no hyperbole to refer to Google’s surrounding ecosystem as The Economy. After all, Alphabet alone produces more revenue than 75% of the countries in the world, so it can be helpful to think of it as a country (2). Assuming my ballpark estimate is somewhat on target, $45 Billion is not a small sum of money out of which a sizable amount is insensibly being wasted in conquesting bidding wars and its defensive counterpart actions.
As you will learn in this essay, I believe that if Google executes a smart transformation in this area, it will generate invaluable amounts of good will, and launch Search into a new era.
From these grounds then, I lay down the driving questions of this project:
Is the way in which Google is running 'Branded/Conquest' Paid Search auctions sustainable?
If not, can it be changed?
Or, on the contrary, is the Google Ads comparative advertising auction system ideal? and is it really the Marketing Budgets that need to be crafted differently ahead of time forecasting for inevitable bidding wars?
Branded War Zones (BWZ)
In thinking about the ecosystem of competitors engaged in bidding against each other in any given Paid Search niche, I realized there is not an SEM term yet that defines the dynamic, or niche, as a whole.
We differentiate campaigns by calling them Branded or Conquest (depending if it's defense or attack) but there is not a name yet for the sum of it when you zoom out and see the niche with a birds-eye view.
If brands are attempting to conquer each other through bidding, we call it a Bidding War. It's fitting then to call the sum of the territories in play as a: Branded War Zone. We'll use the acronym BWZ to refer to it.
A Branded War Zone is defined by the total sum of branded impressions of all the brands competing against each other in any given niche. From now on what I previously have been referring to in this essay as Branded/Conquest, will be referred to as a Branded War Zone or BWZ.
Below is an example of a BWZ in the SaaS (software as a service) field.
For the purpose of this post we are going to call it: bwz:saas_1, or simply SaaS_1.
Branded War Zone of a SaaS Niche (bwz:saas_1)
Branded War Zone | Branded Impressions |
Competitor A | 20,000 |
Competitor B | 16,000 |
Competitor C | 10,000 |
Competitor D | 4,000 |
Competitor E | 2,000 |
Total Impressions | 52,000 |
bwz:saas_1 has a total size of 52,000 monthly impressions, from this we could then derive clicks, cost, cpc, conversions, conversion rate, cost per conversion, among other metrics for the whole of the Branded War Zone (as a collective, or aggregate).
But who outside of Google itself could gather this aggregate data? No one really.
The hurdle in obtaining complete data for any given BWZ is not small, nothing more and nothing less, it would require for competitors in any given niche to mutually agree to mutually share their branded and conquest campaigns data, most probably a completely nonexistent practice due to its inherent risk. And Google counts with competitors never sharing it to keep on maintaining its Billion Dollar Grip on all of them.
Being able to do see complete aggregate data for a niche would show if as a whole that particular ecosystem is benefiting from the scheme. Many different scenarios would play out and there are many ways to analyze the collective data. I will for now hold a deep dive in this area to focus on more immediate considerations.
Absurdly High CPC inside a Branded War Zone
branded cpc for competitor d in the bwz:saas_1
The graph above is a scenario I saw playing out in 2022 managing the Paid Search budget for a SaaS company in the Sales Software niche. Conquest Campaigns were already part of this client’s psyche and they requested them from the get go. There were 2 or 3 other companies already established in the field that they wanted to target. We were not bidding aggressively at the beginning and it took a month or two for competitors to notice us and react, but once they did (see June) our own Branded CPC's doubled. Later on in September, two other companies joined the Niche (or BWZ), and as the pool increased, our own Branded CPC skyrocketed soon after, reaching a 630% increase against the February CPC. Then it normalized, but at a much higher level than prior to the bidding war began, a cost that had to be maintained to protect the Brand. Throughout this period, even if the client had requested the tactic at the outset, I had to several times explain the reasons behind the exponential increases in cost. While it’s also true that due to, first, the relatively good quality of prospects derived from Conquest, and second, the good performance from Non Branded campaigns, both which compensated for the extremely high cost in Branded and Conquest, the client decided to keep on funding them, but not without great concern.
This is a scenario that so many brands using the Google Ads platform are seeing play out today.
Collective 'Branded War Zone' CPA
CPC's are so permanently high in Branded Paid Search campaigns that a few great companies out there have already launched products to at least reduce that spend partially (3). My understanding from reading the documentation, is that these products monitor for auctions where there are no competitors bidding for a branded keyword, to then exclude the branded ad at that precise moment, thus, saving the paid click, and allowing that traffic to come through 'Organic'. Both companies claim the product achieves a 20%-30% savings in Branded campaigns, not bad at all (given the opportunity no doubt that I would consider using these services in the future) but they still only address the minority of auctions inside a Branded War Zone, not tackling the sky high CPC's that are leading to uncontrollable CPA's (Cost per Acquisition), a concern for countless leadership teams and SEM professionals, who despite of running the most optimized programs possible, are finding it impossible to hit their CPA targets (4).
So the following questions arise:
Is the collective CPA for all the competitors inside Branded War Zones sustainable?
Taking a step back, Is the broader CPA, including all other channels sustainable? And would a significant reduction in BWZ CPA help the Niche as a whole arriving to an acceptable CAC level?
Calculation
So let's illustrate an example of how the collective CPA for our example niche, SaaS_1, would be calculated if all the competitors inside it would decide to share Branded and Conquest paid search data.
To project the data I used 'average metrics proportionality' from several niches in the tech sector I have worked with in the past, and came up with a template. Of course it’s only an approximation, there will be many scenarios that play out differently. And there might be many companies that are benefiting greatly from Conquest campaigns. But I believe that the scenario below is the experience of a big percentage of companies involved in highly competitive branded and conquest campaigns.
A relational or association matrix is a great way to represent a Branded Zone:
The self referential cells AA-BB-CC-DD-EE forming a diagonal (grey background) belong to Branded Paid Search data for each competitor (defense).
The rest of the cells (transparent) are the result of the Conquest Paid Search auctions each competitor participated on (attack).
The active action (attacking, or defending), plays out horizontally.
SaaS_1 Niche | A | B | C | D | E |
Competitor A | Branded | Conquest | Conquest | Conquest | Conquest |
Competitor B | Conquest | Branded | Conquest | Conquest | Conquest |
Competitor C | Conquest | Conquest | Branded | Conquest | Conquest |
Competitor D | Conquest | Conquest | Conquest | Branded | Conquest |
Competitor E | Conquest | Conquest | Conquest | Conquest | Branded |
Branded: spend that the brand incurs bidding on its own keywords (defense)
Conquest: spend that the brand incurs bidding for competitor's keywords (attack)
Branded War Zone Saas_1 Metrics (Cost, Conversions, Clicks)
SaaS_1 Cost | A | B | C | D | E | Totals |
Competitor A | $28,000 | $2,816 | $660 | $264 | $132 | $31,872 |
Competitor B | $3,520 | $22,400 | $600 | $144 | $80 | $26,744 |
Competitor C | $1,080 | $864 | $14,000 | $64 | $28 | $16,036 |
Competitor D | $320 | $256 | $120 | $5,600 | $16 | $6,312 |
Competitor E | $140 | $112 | $50 | $32 | $2,400 | $2,734 |
Monthly Totals | $33,060 | $26,448 | $15,430 | $6,104 | $2,656 | $83,698 |
Yearly Totals | $396,720 | $317,376 | $185,160 | $73,248 | $31,872 | $1,004,376 |
SaaS_1 Conversions | A | B | C | D | E | Totals |
Competitor A | 400 | 5 | 1 | 0.5 | 0.2 | 407 |
Competitor B | 8 | 320 | 1 | 0.3 | 0.2 | 330 |
Competitor C | 3 | 2 | 200 | 0.2 | 0.1 | 205 |
Competitor D | 1 | 1 | 1 | 80 | 0.0 | 82 |
Competitor E | 1 | 1 | 0 | 0.1 | 40 | 41 |
Totals (monthly) | 413 | 328 | 203 | 81 | 41 | 1,066 |
Totals (yearly) | 4,950 | 3,939 | 2,440 | 972 | 486 | 12,787 |
SaaS_1 CPC | A | B | C | D | E | Totals |
Competitor A | $7 | $11 | $11 | $11 | $11 | $7.32 |
Competitor B | $11 | $7 | $10 | $9 | $10 | $7.42 |
Competitor C | $9 | $9 | $7 | $8 | $7 | $7.20 |
Competitor D | $8 | $8 | $6 | $7 | $8 | $7.06 |
Competitor E | $7 | $7 | $5 | $8 | $6 | $6.08 |
Total | $7.35 | $7.35 | $7.18 | 7.16 | $6.23 | $7.26 |
The total yearly spend inside SaaS_1 is $1,004,376 (Branded + Conquest)
Using benchmark conversion rates on the backend the number of conversions I projected for the BWZ is 12,787
Leaving us with a collective BWC CPA of $78,54. ($1,004,376/12787)(5).
What initially stands out in both the Cost and Conversions tables is how proportionally small Conquest (light gray) is in relation to Branded (transparent).
In the conversions table see how for Competitor A, the biggest one in the niche, only 13 of the 413 conversions it gained on a given month, are from Conquest. See how for competitors like D and E, there might be months where no conquest conversions take place.
In the table below we can see that in aggregate for the whole Branded War Zone, Conquest represents only 16% of the spend and even worse, only 2% of conversions. For such small proportionality big damage is being done inside The Zone.
A small threat, perceived as a big threat, causes a big reaction and little gain. The same happens when tanks approach an enemy borderline. Even if they are not a lot in quantity, they will cause fear and a huge spike in military defense spending by the threatened country.
SaaS_1 Monthly Projection | Cost | Clicks | Conversion | CPC | CPA |
Branded Paid Search | $72,400 | 10,400 | 1,040 | $7 | $70 |
Conquest Paid Search | $11,298 | 1,128 | 18 | $10 | $642 |
Conquest/Branded | 16% | 11% | 2% | 144% | 922% |
Conquest proportionality versus Branded (Conquest÷Branded)
Anchored in the Quality Score system, Google limits the number of competitor auctions any given brand can access, this is a very good measure that keeps the spend in Conquest relatively low(6).
So where is the imbalance then?
The imbalance is not in the Conquest campaigns, it’s in the Branded Campaigns. Paranoia causing defense spending to become unsustainable for the overall budget.
Google allows tanks on the border (impressions) and even some incursions (clicks), easily persuading companies to defend themselves in 100% of their hard-earned impressions despite the organic branded result being there anyway. The threat also intensifies the perceived need of being at the absolute top of the SERP, a lower ranking might be useless, and this pushes Branded Paid Search CPC up-and-up-and-up. In the case of SaaS_1, to an average of $7.26.
Think about it, companies go out there creating great branding advertising to generate awareness (not cheaply), in many cases in Google's own upper funnel channels like YouTube and the Google Display Network, and when finally someone searches for them, the company has to pay an additional premium of $7.26 to avoid losing that valuable prospect to the competition.
This constitutes what could be called Double Taxation and a Triple-Whammy effect against Brands:
First, a competitor is allowed to creep in at no cost on any brand's impressions owned through upper funnel campaigns -impressions are free if a user doesn't click. That user might just go and search again or visit direct -.
Second, the brand is forced to raise its own bid for its own branded keyword not to concede space.
And Third, the brand has to counter the attack by launching its conquest campaigns as well.
Once this triple dynamic is established in a niche, it's impossible to stop it. It’s what causes the un-sustainability. Endless Wars.
So what if, without interfering with essential competitive practices, Google could implement a new set of technical solutions to graduate the way competitive campaigns are weighted and run in its platform so that branded spend is not so inflated?
What if Google could find a way to cap the cost per click for a brand bidding for their own earned impression?
If we use as an example, the CPC inflation case study I shared above, we see that the starting CPC for the niche was $2.00. The table below, then, shows the recalculated aggregate cost for SaaS_1 if clicks for branded campaigns would be capped at $2.00.
SaaS_1 Adjusted Cost | A | B | C | D | E | Totals |
Competitor A | $8,000 | $2,816 | $660 | $264 | $132 | $11,872 |
Competitor B | $3,520 | $6,400 | $600 | $144 | $80 | $10,744 |
Competitor C | $1,080 | $864 | $4,000 | $64 | $28 | $6,036 |
Competitor D | $320 | $256 | $120 | $1,600 | $16 | $2,312 |
Competitor E | $140 | $112 | $50 | $32 | $800 | $1,134 |
Monthly Totals | $13,060 | $10,448 | $5,430 | $2,104 | $1,056 | $32,098 |
Yearly Totals | $156,720 | $125,376 | $65,160 | $25,248 | $12,672 | $385,176 |
Adjusted BWZ Cost Table at $2.00 CPC cap for Branded Paid Search. Tier 1 level cpc in a Branded Block.
Within our template case study that would mean that Google will stop perceiving close to 60% of the revenue it previously did for the niche ($1,004,376 - $619,200 = $385,098 new revenue amount based on a $2 CPC).
But as I estimate below, it’s very possible that through the innovative approach I recommend, Google will lose a minimum amount of revenue from such a move, as they will recoup it on the other end in the form of reinvestment in its platform, and perhaps as importantly, public relations.
Proposing a New Way Forward: The ‘Branded Block’ and the ‘Competitor Carousel’
In the spirit of fairness and sustainability, I propose a new CPC-capped tier system, deployed as part of an Integrated Branded Block. This solution maintains the competitive dynamics that make capitalism thrive, while curbing the exploitative inflationary cycles that plague branded search today. It's a way to protect what companies have already earned: their hard-fought audiences. While still fostering a healthy competitive environment for those who decide to challenge them.
Imagine a world where a CPC cap tiered system, a subscription, not an auction, is imposed for a brand's defensive bids on its own keywords. The baseline fee isn’t just a reduced cost—it’s a convenience fee that grants the brand control over the prime real estate of the search results, and here is the big innovation: the real estate at the top of the SERP consolidates the space of both the organic and paid listings into one seamless Branded Block. This unified block then becomes an elegant space with many brand controls like sitelink selection, dynamic extensions, offers and direct calls to action, even video, that would be available at the brand’s discretion as part of tiered CPC system.
Imagine a bracket with three fixed CPC levels: $2, $4, and $6. With increasing levels of control of actual functionality and display size of the Branded Block as the CPC goes up the bracket. This would grant Brands very predictable forecasting capabilities as well as budget scaling and descaling flexibility.
But this new way forward isn’t a closed door to competitors. No, there’s still space for them. Prime location. To the right of the Branded Block I envision an organized and predictable space in the form of a carousel or dropdown. With a clear headline title (“Competitors”) making it attractive for users to go click it. Here, competitors fight their own battle, but they do so among equals, measured by the strength of their bids -in this case not capped- and their willingness to stake their presence on a competitor’s territory. The highest bidder wins the most prominent slots in the carousel.
Whoever is familiar with Game Theory will be able to recognize that the current status quo in a Branded War Zone is akin to a Prisoner's Dilemma, where, due to the low perceived value of trust, fear wins the battle at the expense of a more beneficial outcome for all.
But inside this new paradigm, brands will improve their ability to focus on growth, instead of expending resources on unnecessary defensive measures. Meanwhile, competition will flourish with challengers still able to fiercely compete for coveted top positions in the Competitor Carousel. Premium placements in the carousel or dropdown, customized for those with the most compelling offers or largest wallets—without leaning on the heavy hand of auction manipulation, while still affording a very fair entrance to new brands in the niche market.
Given its current capacity to identify and classify companies through the branded lists functionality, Google already has the tools to implement such a system. It’s less of a technological leap than a philosophical one—a recognition that competition need not be chaotic to be effective. Google would still benefit from healthy competition, but brands would no longer feel the need to pour money into a bottomless pit just to defend what they’ve already earned.
The Branded Block and The Competitor Carousel:
a Branded Balanced Zone.
Using the example for the website builder platform Wix, a re-imagined branded SERP that balances the senseless bidding war’s inside a Brand Zone.
This is a win for all parties.
Google will take a big leap in revolutionizing the negative sentiment it has harnessed for years in relation to the high costs of Branded spend, gaining a strong tailwind that will help it retain its status as the adored natural leader of Search. Heck, a move like this, could even help tame the DOJ on its aggressive pursuit for de-monopolization. But even more incredibly, despite of the tiered cap system of the Branded Block, Google won’t lose revenue because, first, due to its customization features many brands will choose the higher tier branded block brackets, but second, the brands that stay in tier1 to save funds could make the decision to transfer savings into Non Branded Paid Search or Upper Funnel activity like YouTube campaigns.
This would represent a true Judo like maneuver for Google, using contrary forces for their own benefit, establishing a true Nash Equilibrium, that include them as a member of the whole of the ecosystem.
For Brands, they will achieve more budget predictability and control over their earned SERP retail space and messaging.
Competitors will gain a fair space to elegantly showcase their value.
As for consumers, those elusive decision-makers whose attention we all covet, they will get a much more streamlined and meaningful search experience, one that reduces noise without sacrificing choice.
Branded Balanced Zones
It's time we leave behind Branded War Zones (BWZ)—not by stifling competition, but by organizing them into something more sustainable, predictable, and fair, a Branded Balanced Zone (BBZ).
Now at the conclusion of my essay, I ask myself how much of a Fool I am.
The answer will depend on how many of you I can convince to become romantic fools like me and help me push for a change of this magnitude.
If you want to start moving from BWZs to BBZs, the first step you can take is to fill out the Branded Paid Search Sentiment Survey. I will make sure it reaches the right people.
Branded Paid Search Sentiment Survey
Help us get to 1,000 completed surveys.
Elvis has left the building.
Excitedly, Moises Szarf.
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Listen to the DeepDive podcast on this essay (NotebookLM)
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Notes
(1) Branded: Paid search campaign targeting a brand's own keywords. Non-Branded: Paid search campaign targeting keywords directly relation to the product or services sold. Conquest: Paid-search campaign targeting a competitor’s branded keyword. (back to essay)
(2) With a revenue of $307.4 Billion in 2023, Alphabet alone generated more revenue than 75% of the countries in the world. For example, more revenue than Portugal, Peru, or New Zealand (source: Wikipedia). With an EBITDA of $96 billion it’s also remarkably profitable. (back to essay)
(3) See Adthena, and ROI Revolution. (back to essay)
(4) In this annual letter by Chamath Palipatihiya (All-in Podcast, Social Capital_ founder) he clearly illustrates the concerning issue venture capital driven tech companies have been facing with regards to unstoppable increases in CPA or CAC (Customer Acquisition Cost). He calls it the "The Accelerating Treadmill of User Acquisition". Would love to get an update from Chamath on how this has evolved from his perspective (since the letter is from 2018). From my own experience, even if in some mature industries (I can attest this personally) Conquest CPA is acceptable, in high tech, these conditions very probably still remain. (back to essay)
(5) Of course this CPA number doesn't mean a lot without revenue or a gauge on the target CPA for the niche to determine if it's high or low, but I'll leave delving into revenue considerations for a later stage. In the meantime focusing exclusively on CPA still serves the purpose. (back to essay)
(6) My estimation is that Google simply imposes a hard limit on how many times a company can appear in a competitor’s keyword regardless of how aggressive the bid might be. Second, by restricting the use of a trademarked keyword in an ad, Google imposes a low quality score on conquest auctions, therefore a high CPC along with it. As the leadership of a company experiments with the ambition of stealing competitor's impressions it will realize that the more they push the higher the CAC, and will voluntarily desist from such aggressiveness. (back to essay)
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