Comment by tempestn

We've found exactly the same thing. It's extremely important to differentiate between branded and non-branded keywords. (And to be diligent about filtering out all variations, misspellings, etc., of branded searches from non-branded campaigns.) While our testing didn't show 100% waste in branded advertising, we did find approximately 80-90% of branded clicks would otherwise have come through organically. So we do still do a small amount of branded search advertising, but with an assumed actual CPC of 10x the nominal CPC (and therefore quite a low maximum bid). For non-branded ads, we assume the true CPC is much closer to the apparent one.