What is the difference between keyword and invented business names?

When choosing a name for your company, one of the first key decisions is: to keyword or not to keyword? Descriptive or evocative? Generic or metaphorical? Should your brand name describe exactly what you do? Should it relate somewhat? Or should it just give a general feeling and allow you to define it as you grow?

The type of name you choose has little to do with how successful your brand will be. It most likely will, however, impact how and when in the growth of your company you spend your money and effort on name recognition and brand awareness. Three types of business names are descriptive, evocative or vessel. Let's go through them and give some tips on how to choose a business name that's right for you.

Going for the Keyword: Descriptive Names
Everyone's first inclination is to choose a name that describes exactly what they do. This is what makes generic, descriptive names popular, and highly sought after. A descriptive brand name requires little to no explanation:

General Motors
Toys R Us
IBM (International Business Machines)
The benefit of a descriptive name is customer retention. Your customer doesn't have to think hard to make the connection between your name and what you do. Also, you don't have to spend a lot of time and money on taglines and other branding to help them make that connection. In other words, a descriptive name can help you get up and running quickly.

What a descriptive name lacks, however, is uniqueness. Your name can communicate in an instant what your company does. But it will not explain what it is that makes your company special, or why your company does what it does. The customers you gain easily with a descriptive name you may have to work harder to keep - your branding efforts will be spent crafting your unique story to create brand loyalty.

Thinking Outside of the Box: Evocative or Metaphorical Names
You may choose to venture outside of a generic and descriptive name. If so, taking a close look at the unique values of your company will help you choose something appropriate. The name examples below are derived from common English words, but don't directly relate to the company's core business. Instead, they evoke a feeling or mental image.

Names that utilize a tagline or back story: Amazon - Earth's biggest river becomes "Earth's biggest bookstore, and not biggest marketplace". Apple Computers - Emphasizes a simple, friendly, everyday home item rather than a bulky, industrial, business machine. Caterpillar - Derived from how the construction machines moved across dirt.

Names with an implied connection to how you interact with the product
Digg - Users "dig up" stories of interest, or alternately they "dig" (slang for "like") articles and promote them by voting.
Twitter - The short and continuous chirps of a bird relate to a non stop stream of short messages.

There are many advantages to choosing a business name that doesn't directly relate to what you do. Perhaps the best reason is the powerful, lasting connection that you can create with a potential customer when he or she experiences what we call "the 'a-ha' moment". If your business name makes the customer think, and they understand how it relates, you've got a winner. They can make this connection on their own or with the help of a logo, tagline or backstory. If your customers "get it" there is a much higher chance of them remembering your brand name than if they just pass over your name without much thought at all.

Starting with a Blank Slate: Invented or Vessel Names
Creating a word that does not already exist is called Neologism. These made-up, invented or "coined" names are popular with companies because they allow them to truly start from scratch. They can build a brand voice and message that is free from any existing idea or opinion that a customer may already have. This type of name is usually also easier to trademark, and there is less competition for the domain name, social media handles and search engine visibility.

There are many coined names that are derived from existing words or sounds. These can help set the stage for the brand and help with memory retention. Some examples are:
Accenture - From "accent on the future".
Verizon - From "veritas" (Latin for truth) and "horizon".
Maybelline - Not officially a combination of anything, but unmistakably the sound of a woman's name.
Then there are the coined names with no recognizable root words at all. However, even this type of name is not completely a blank slate, since sounds can lend themselves to a particular industry.

Flowing names with lots of vowels and 3-4 syllables work well for global corporations and consulting: Aricent, Celera
Short, sharp sounds indicate science and technology: Kodak, Xerox
Fun sounds are creative and entertaining: Zune, Hulu
Noise/onomatopoeic sounds are exciting and fun: Zynga
Some sounds are even visual: Oreo - two strong "o" sounds leads to thoughts of round circles

So What Type is Best?
When it comes to calculating the value of names for a business name marketplace like BrandBucket, descriptive names will always be priced higher because of higher demand, followed by evocative names then vessel names. However, a more expensive name isn't necessarily a better name; there will always be more competition for the terms that are easier to start with, but the true value of a brand name is the sum of the branding efforts that you put into it over time.