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How should whe behave when our keywords include special characters like, example, ampersands ( & ) ?
If we are building a site for a company called Black & White or if we are building a site for a B&B in Liverpool we are surely going to put those &'s in our H1, in our titles tah and in our links, urls and anchors.
Should we encode them
[b]&[Yb] = [b]&[/b] I hate it when a company brand includes the ampersand, and in some cases I've convinced them to let me use a plus sign. But I've also bit the bullet in a few cases and put the unescaped ampersand character right in the title element - and it gets indexed perfectly by the big three search engines. In my world, effective communication trumps technical validation any day.
However, in the in page content, I find no indexing problems with using html entities - so that's what I usually do.
Whichever you decide - stay uniform.
I'd recommend NOT encoding them in titles and text (very ugly) but DO encode them in "href=" portion of links.
A commonly used kw tool show that searches for "b and b" versus "b & b" are virtually identical in volume.
Clearly one wants to catch all the variations for a given query when "and, &, +" are involved.
One can also try out the variations in the SE's and quickly see that that DO treat the variations differently. Sometimes, quite differently.
Re the OP's main question, seems that there is widespread agrement on avoiding encoded characters in titles. There may be agreement on using them in text too, but careful testing shows that one needs to be thoughtful about how and when.
Then do same at Y, Live, Ask.
Then think about your page titles and on-page text.
And, go find other special characters and see how they are treated.
Try it with simple, commom punctuation marks too. And, don't forget to throw in a few nonsense terms to see what happens when the engines don't have a frame of reference. ;-)