The pros & cons of bidding on competitor’s brands

What are PPC brand bidding and competitor bidding?

Brand Bidding on PPC is when you bid on your own brand. In a way it does compete with your organic terms but it is still worth doing if any of these points are relevant to your account:

– You would like a lot more control over the search engine results shown for your brand e.g. specific wording or a specific landing page for your listings, particularly if you want different listings to show for different keywords. In which case, PPC will offer you a lot more control than any organically-ranked listings can offer.

– You would like to take advantage of the fact that ads usually convert better than organic listings – You would like to bid on your terms to protect your brand from competitors

Competitor Bidding is where companies use Bing or Google Adwordsto bid on the brand names of their competitors e.g. if EE decided to bid on the term ‘O2’ or, if Virgin Media bid on the product ‘Sky Glass’.

Can you really use competitor names in Google ads?

The short answer is, yes for keywords but no for advert copy . Google Adwords allows you to legitimately target the keywords of any brand. They choose to not restrict any ads for targeting branded keyword terms e.g. company names like ‘Apple’ as well as branded products like ‘iMac’. However, when it comes to ad copy, you will be restricted if you include any registered trademarks (e.g brand names) in your ad headlines or descriptions and you will find that your ads will go straight from ‘pending’ to ‘restricted due to a violation’.

For brand names that aren’t recognised as registered trademarks with Google, you will find that you are not restricted straight away but chances are your competitors will notice the use of their brand names (because what company isn’t keeping a regular check on their PPC and SEO) and report you to Google for using their specific brand names within your headlines or descriptions. Therefore, it is best to not use these terms in the advert copy itself and you might find that doing so is not so effective at converting for two reasons:

1. It looks underhanded to any potential customer and so is less likely to convert 2. Potential customers might click your ad after mistaking it for the brand they were truly after, leaving you with the cost of a click for just a bounce

But what about quality scores, I hear you say? Yes, ads that target these competitor brand terms but don’t actually use any of the keywords in the copy are most likely going to have low-quality scores. However, it is worth considering that fewer companies are bidding on these brand-specific terms and, if you need a quality score boost, you can technically create a specific landing page that perhaps compares you directly with your competitor and thus includes their brand name within the page copy. By doing this, you will appear more relevant to Google without risking any restrictions on your ads through ad copy violations.

But, is it good practice to bid on competitor keywords?

Bidding on competitor’s brand terms can be an effective but expensive way to gain new business. If you are a challenger brand trying to take on the number one brand in your market, it might be worth a try. However, as there are usually more cost-effective options out there, it is often better to implement it once you have tried or exhausted other paid search, shopping, display and paid social campaigns first.

Is it legal and ethical to be bidding on competitor keywords?

Yes, it is legal in most countries. Whereas the USA has very little legislation about this, Denmark and perhaps other countries across the EU have a law about looking as though you are impersonating another brand. This means you need to avoid using brand names, slogans, and any associated phrases that your competitor often uses in order to stay on the correct side of the law.

As for ethical, that is up to you, how your industry operates and where your company stands on such practises. On one side, it might aggravate your competitor and if it was them doing it to you, you might not be best pleased. Perhaps you have a gentlemen’s agreement in your industry that it would go against such as not targeting each other’s clients head-on. However, you might be a ‘dog-eat-dog’ industry where it might be fair game to attempt to divert business to your company and, in fact, the only reason they’re not currently bidding on you is because your ahead in the game. Perhaps it would suit the ethos of your brand, perhaps it wouldn’t. Every company and industry is different and you should consider if it is right for you.

So, should my company be bidding on competitor brand names?

Before choosing to bid on competitor keywords, you need to thoroughly research the competitors and products you want to target so that you know if they offer the exact same service or product or if they offer a similar service or product. This way you can word your ads appropriately and select your budgets accordingly. For example, if you offer one of their five services, you should think about writing specifically about that one service and adding relevant negative keywords for the other four services. Likewise, if your product has a desirable feature that your competitor’s product does not have or your company has a fantastic USP that your competitor doesn’t, then you should consider featuring this heavily in your ad copy.

Also, consider if your competitors have the potential for a bigger ad spend than you, as you can pretty much guarantee they will start bidding on your brand terms if you bid on theirs. And, if they know they have a bigger budget and/or if bidding on you is working well for them, then they might be less willing to call a truce and agree to no competitor targeting in the future.

How do I stop competitors bidding on my brand?

Unfortunately, you can’t. If you’re thinking of starting a competitor keyword bidding campaign or if your competitor’s already bidding on your brand, you cannot report them to Google as they will not intervene. Remember, keywords are allowed but trademarks in advert copy are not.

So, if you are wondering how and what you can do to protect your brand, there are a few things you can do:

1. You can approach the competitor to see if they meant to target your keywords. If your brand name is close to popular terms e.g. ‘graham wardrobes’ to the keyword ‘wardrobes’, then many furniture companies might accidentally show up for that term as it is a close match. You could contact them to suggest they add ‘graham’ as a negative keyword, which would save them money and get your traffic back for ‘graham wardrobes’. 2. If you sense the targeting is on purpose, you can approach the company in order to agree to not bid on each other’s brand and product names going forward 3. You can bid on your own brand name if you are not already doing so. As you can include your brand name within the copy and they can’t, your quality score is always going to be better than your competitors. The cost will be cheaper for you too. 4. If it suits your brand, you can tailor your ads to acknowledge the competitors below e.g. ‘we’re graham wardrobes’ or ‘the real graham wardrobes’

The pros of PPC competitor bidding

You can appear in more searches and broaden your reach

If you are looking to expand your impressions, especially where there is a lot of competition on your keywords or if there is not that much traffic for your most relevant terms, this can be a useful way to find extra relevant traffic.

You can increase your brand awareness

If you are a relatively new or unknown company, you can use a well-known company to start to get your name out there.

You can tackle your competitor head-on

If you are a challenger brand trying to carve out a space dominated by one or two main competitors, you can try to steer business away from them.

The risks and cons of bidding on competitor’s brand terms

You can be certain they’ll bid on you

If you ‘open the floodgates’ to competitor bidding, you can be sure they will bid on you back and increase the CPC for your brand keywords. Remember that to bid on competitor keywords, you will need to bid on your own brand terms too. With this in mind, make sure you have the appropriate budget assigned and ready, as you would hate for your competitor bidding campaign to backfire when they consistently outbid you on your own brand keywords and thus steal business from you.

Bidding on competitor keywords can be expensive

As the quality score of your ad will most likely be poor and lower than your competitor’s ad (as the ad copy doesn’t usually mention the brand and usually neither does the page copy), the ads are going to not be as cost-effective as ones where you can write copy to be directly relevant. You are also likely to have competition direct from the brand you are targeting who will bid appropriately to try and control their brand terms.

It’s worth noting that PPC competitor bidding often requires a lot of negative keywords such as adding the term ‘log in’ to your negative keyword list so you don’t target the active, existing, and probably loyal, customers of your competitor. In addition, there will be many associated competitor keywords that aren’t relevant to you and your business. Before launching a campaign, try to think of as many negative terms as you can and then keep checking your search terms regularly and adding negative terms often to avoid high cost per clicks.

Customers from competitor bidding are probably less loyal

If you are embarking on competitor brand bidding, you should make sure it has its own campaign and budget in your Google Ads account with suitable conversion tracking and, even better, loyalty tracking. This is important as the type of customers you might be acquiring from competitor keywords are savvy shoppers who probably aren’t loyal to a brand (after all they searched another company and were swayed elsewhere just by an ad). This is fine if you are in design and build, for example, as once the project is complete, there isn’t going to be a huge amount of repeat business for a good few years. But, if you have 12-month contracts, a monthly subscription service or a product that is replaced regularly, you might want to keep in mind that these customers might not always be worth the same ROAS as customers obtained through other campaigns and means.

Tips on brand bidding and common mistakes to avoid

The do’s

– Bid on your own brand with its own budget – Have an assigned budget for all competitor brand bidding – Thoroughly research your competitor’s terms and target the appropriate keywords only – Set up a separate campaign, budget, conversion and loyalty tracking per competitor – Review search terms regularly and update your negative keyword list often – Highlight any USPs for your brand or product – Create competitor-specific landing pages if competitor bidding is working for you or if you want to increase your ad quality score – Be prepared for your competitors approaching you

The don’ts

– Start competitor bidding if it doesn’t suit your brand identity and ethos – Try competitor bidding if you are the leading brand in your industry, unless you are retaliating or have suffered a significant drop in sales/customers – Create competitor name campaigns before trying many other PPC campaigns which will likely be more cost-effective – Start bidding on competitors without considering budgets (and that they will bid on you) – Use brand or product names in the advert headings and descriptions – Pretend to be your competitor – Target all competitors in one campaign as some might perform better than others and you need to be able to assess the data

We hope that this blog has provided you with some useful tips on competitor and brand bidding and has helped you to identify some common mistakes to avoid before you get started. If on reading this you have any further queries, you can submit them to our ‘Ask the Experts’ questionnaire for us to answer in an upcoming vodcast. Or, if you have decided it would be easier to work with a PPC agency, feel free to contact us today.