At Stripe, a test of branded search ads showed they weren't pure waste. When competitors bid on Stripe's brand terms, the cost per acquisition matched non-branded channels. Without those competitive bids, branded search mostly cannibalized existing traffic, but the presence of rivals made it generate real value.
Chapters
one of my, I guess, biggest contributions when I was at Stripe was working on this branded search experiment. And I won't speak directly for the co-founders, but my impression is that it had come from very up high, was that they were just planning on eliminating the branded search channel. And I had done this work before at the first startup that I was at after I transitioned out of government. And I proposed that we do a branded search experiment at Stripe and the expectations. I mean, they had already booked that they were going to save this money and reallocate it to other channels. And we ran the experiment. And what we found was that when you consider the cost of branded search ads, because our Google quality scores were so high, and you consider the fact that there were adversarial bidders against our branded ads, we ended up having something where our acquisition costs through that channel or our cost of an incremental booking through the branded search channel was very comparable to the non-branded channel, and we ended up saving that through experimentation. I believe I had seen a paper where some folks did a lot of— I think we're working with one of these big platforms, and they basically said if there's no competitive adversarial bids against your branded ads, that you're probably almost all cannibalizing, but once people start bidding against your branded ads, you might need to save it.
I think that makes perfect sense. My personal experience of defending our like Recast branded terms and bidding against competitors, like you really have to think it through. There's real dynamics at play in these networks and something that might be true today might not be true 6 months from now, depending on your actions, the actions of competitors, how the market is like, all of these things can change and happen.
