Paid search professionals constantly debate the merits of running paid search campaigns bidding on competitor brand names. Questions such as the following may arise:
- Is bidding on your competitors ethical?
- Are the high costs-per-click (CPCs) worth spending the budget on?
- Are you actually reaching people with buying intent?
In this article, I’ll talk through answers to these questions and more to help you understand if a competitor search campaign might be right for your brand.
Competitor Bidding Ethics
Google and Microsoft allow you to bid on your competitor’s name within keywords (and this right has even been tested in the courts here and here.), but you cannot directly mention a trademarked brand name (that you don’t have the rights to use) in ad copy.
In addition, even if you don’t include their name, you should not write your ad copy in a way that a user thinks they may be going to your competitor’s site instead of yours.
For instance, you might use the headline “Official Site” (without mentioning whose official site you’re pointing to). When a user sees that in conjunction with having searched for the competitor’s name, they may naturally think they’re going to that company’s site.
Finally, the landing page should also clearly feature your brand’s name and logo in order to avoid deception.
Cost-Benefit Analysis Of Competitor Bidding
Let’s face it: competitor keywords can have expensive CPCs. High competition around these keywords in many industries drives up cost.
You’ll also generally struggle to achieve a decent quality score due to other companies’ brand keywords naturally being deemed less relevant to your ads and landing pages, which can also impact cost.
Because of the high potential cost, competitor bidding does not make sense for all industries or brands.
For instance, if you’re selling products with a low profit margin, bidding on these pricy keywords may not work. Generally, this tactic works best for higher cost, higher margin products and services, as it’s easier to still yield a return on investment (ROI) after higher costs-per-acquisition (CPAs) and lower conversion rates.
Be careful also about entering competitor bidding “wars” for the sole reason that other brands are bidding on your name. This action can quickly lead to rising CPCs for all with little payoff.
One scenario where I’ve seen competitor bidding work best is when a company offers a very specific, complex service that’s difficult to sum up in a search query but has established brands that the right prospects would be familiar with.
For instance, if you’re promoting software for a particular type of industrial machine, niche buyers may be aware of companies that already provide that software.
Once you’ve established a use case for competitor bidding, you should establish a list of brands to use.
Determining Competitors To Bid On
When figuring out which competitor brands to bid on, you should rely on a combination…
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