TheRealSaxman - 1:28 pm on Mar 14, 2013 (gmt 0)
@graeme_p ...companies advertise branding because (in most cases I deal with) their competition will generally try and park on that company's name in order to try and take business from them. The data that most companies find says that if there are paid advertisements above the organic rankings then the majority of people are drawn to click on the highest ad which are paid advertisements. This is why it's important to rank #1 for your company's branded terms.
For example... I have a client that has a online cloth diaper store (one of the largest out there)... they didn't understand this either until they insisted that we pause all of their branded terms. We ran this test for a month just to make the client happy and the data showed that #1...they lost thousands of "paid" visitors... #2... their organic traffic didn't increase AT ALL... #3...they lost thousands of dollars in revenue that month. When we turned them back on everything the revenue returned.
Now I'll agree that if you competition isn't parking on your company's name then this doesn't make much sense, but if your wondering why companies do this... then this is why.