Competitor Brand Bidding in Adwords – Is it worth it?

28 January, 2019

If you are looking to boost your paid search performance in Google Ads (formerly known as Google Adwords), bidding on your competitors’ brand terms can be useful, particularly those with a strong brand and lots of searches. That said, it has to be done correctly and with plenty of precautions taken.

What is competitor brand bidding?

Put simply, competitor brand bidding is targeting those searching for your competitors’ brands in search. If you compete with a strong and reputable brand who offers a similar service or product to yourself, their potential customers could be convinced to see your offering too – in theory.

This can be done directly, by bidding on your competitors’ brand names as keywords. It can also be done indirectly (and often accidentally) by using broad or phrase match keywords with your competitor names not added as negative keywords. For example, “football boots” will target Nike football boots if “Nike” is not present as a negative.

The pros of competitor brand bidding

When competitor brand bidding works, it can give your campaigns a boost in performance. Some of the advantages of competitor brand bidding include: 

1.     Brand awareness 

If your brand is less well known than the competitor whose brand you are targeting, competitor brand bidding can be an effective way to build awareness of your own alternative brand. For this to work, your ad must be well branded and deliver an effective, concise message about what makes your brand and offer better.

2.     Exposure to new and qualified audience

When someone is searching for a competitor that is known for a certain product or service that you also offer, we can assert that these people are also in-market for you. This is a handy way of pre-qualifying your audience.

Be careful, though; if your competitor sells a wide range of products or services, and your brand only overlaps with this to a small degree, you might find your ads are not relevant to enough of them for this to work.

3.     Competition isn’t as tough

Besides the obvious competition (the competitor brand you are bidding on), there will often be fewer advertisers bidding on competitor brand terms than generic terms. This means CPCs can be lower, initially.

The cons of competitor brand bidding

Unfortunately, competitor brand bidding is not necessarily a quick win (or a win at all). While it can be effective, there are often draw-backs and potential issues that may arise… 

1.     There may be potential legal implications

A worst-case scenario of bidding on your competitor’s brands is potential legal action from your competitors. If competitor brand bidding is done incorrectly or illegally, there can be legal ramifications. So, make sure you are fully aware of Google’s ad policies before setting up your competitor brand bidding.

2.     It could start a bidding war

Not to over-dramatize, but competitors who realise you are bidding on their brand and beating them to some of their traffic, probably aren’t going to be very happy about it. By bidding on your competitor’s brand terms, you are essentially inviting them to do the same to you.

Whatever impact in performance your ads are having on your competitor’s brand campaigns (lower impression share, lower click-through-rate, higher CPC), may also occur on for your own if the competitor decides to ‘retaliate’. 

This sort of bidding war can be expensive and, ultimately, waste money for both sides. Competitors will often agree in principle not to bid on each other’s brands for this very reason. 

3.     Quality score and CTR will be poor 

A user searching Google for “River Island Shirts” is probably only interested shirts from River Island. Even if your shirt brand sells the same products at better prices, their search intent is clear and strong. When bidding on competitor brands, your click-through-rate will usually be low, particularly relative to your average position. 

The knock-on effect of a poor CTR can be a lower Quality Score and eventually a higher cost-per-click, which can quickly make ads unprofitable.

Competitor brand bidding – General Tips

These do not fit all cases necessarily, but they are a good starting point if you are considering setting up competitor brand targeting.

Make sure you are competitive

Your brand is already at a bit of a disadvantage, given the users are already searching for your competitor specifically. To counteract this, you should try and ensure your offer is better than theirs. This could include better pricing, a special offer or discount, or an enhanced version of the service they are selling.

Expect a fairly high CPA

For reasons mentioned before (lower CTR, lower quality score, higher CPC), you should expect competitor brand bidding to be fairly expensive. When competitor brand bidding, you should always bring it back to your budget and goals. It may not be cost effective enough to justify it. 

Ensure your ad is appealing and relevant

If you are trying to convert traffic that isn’t searching for you to begin with, you must make sure your ad copy is as eye-catching and appealing as possible, without being misleading. Consider bolstering it with a special offer or discount that your competitor is not running.

Important: Always play by the rules

Google will not stop advertisers from bidding on their competitors’ brands – this is a source of annoyance for many marketing managers at large companies. There is an important distinction to make about Google’s advertising policies. 

  • Use of registered trademarks as keywords is considered fair game – Google will not stop this.
  • Use of registered trademarks in ads is strictly not allowed 

Do not use trademarked brand terms in ad copy

Mentioning your competitor’s trademark in your ad is not allowed. This may occur when advertisers try and compare themselves favourably to them (“10% cheaper than Brand). Worse still, an advertiser may decide to try and pose as the competitor in order to gain a cheap click (which will quickly become a bounce when the user realises that they have been fooled).

Both of these instances will usually see your ads disapproved quickly and has the potential to result in legal action.

Do not use trademarked brand terms in your display URL

Advertisers may try and sneak their competitor’s name into their display URL; for example:

www.yourbrandname.co.uk/deals/your-competitor 

This is also not allowed.

If you are in any doubt about Google’s advertising policies and wish to avoid landing in any hot water. We strongly recommend reading Google’s own guidelines on the subject.

Written by Tom

Tom cites his key strengths as communication, writing and presenting. He enjoys working in digital due to the way it satisfies both the creative and logical sides of the brain.

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