Google Ads – Bidding on the Competitor as a Keyword

Google Ads – Bidding on the Competitor as a Keyword
Before we get into what bidding on your competitor’s brand can do for your business, let’s quickly recap what bidding on keywords is, and what keeping it relevant to your business can do for you.

When someone sees your ad, your ad ‘impression’ goes up. When someone clicks on your ad, your ‘click’ count goes up. When someone buys something off the landing page of your ad, you’ve got a ‘conversion’. Whether your goal is to direct more traffic to your website, or to get more conversions, having an appealing (and informative) ad can do wonders. But in order for your target audience to reach your ad, you need to bid on keywords relevant to your business’ products and services.

Why?

Let’s take Google ads for example. If someone is looking for something in specific, they will search for their query on the Google search engine. While the individual waits for the results, the search engine queries its advertisers (i.e. your business) – looking for a keyword match within its ad groups. If one, or multiple advertisers, are bidding on keywords that are considered ‘relevant’ to the search query, the auction begins.

This results in the individual being presented with options (i.e. ads). Where your ad ranks on the results pages depends on a number of things. From how much you’re bidding on a keyword, the quality score of the ad itself, to how relevant the landing page is compared to the search query and the ad presented – among a plethora of other factors. 

BIDDING ON THE COMPETITOR AS A KEYWORD

So now that we covered the basics on why we bid on keywords – let’s look at bidding on the competitor (their name or brand) as a keyword. You might wonder, is it allowed? And the answer to that is: yes!

Google actually lifted the ban that restricted companies from bidding on their competitor’s branded keywords back in 2008. Google states that it “will not investigate or restrict the use of trademark terms in keywords, even if a trademark complaint is received.” Since the lift of the ban, the only thing you cannot do is mention your competitor’s trademark name within your ad copy.

The question remains, why would you want to bid on your competitor as a keyword?

 

1. BRAND EXPOSURE

Well, for starters, as Evan Cummins said, “bidding on the competitor can actually provide a boost to your online advertising performance.” The fact is, your target audience may or may not be aware of your business, or the products/services you offer. But it is safe to assume that because the individual searched for your direct competitor, they are likely to be interested in what you have to offer too. So your bid will only help to shine a light on your business.

But what comes next? How do you capture the attention of your target audience? This is where what you write in your ad copy becomes of utmost importance. If someone is looking for a product and is given a list of businesses they can buy it from (i.e. search engine queries) – what makes your business stand out? What is your competitive advantage? If you bid on a competitor as a keyword and appear on that search query list; your target audience will definitely compare you to your direct competition. As such, your ad copy matters. Not only should the ad copy should mention what you do, but also what makes you better than your competition (i.e. better warranty, lower price, etc.).

2. CHEAP, LESS COMPETITIVE

Believe it or not, brand keywords (in most cases) are fairly cheap to bid on, because not everyone is bidding on every single brand of business. The only thing worth noting is if a business is bidding on their own brand, you will have to pay a higher price.

This means, a) you should be bidding on your brand as a keyword in order to make it harder for your competitors to want to bid on yours, and b) you should be bidding on a competitor’s name as a keyword IF, and only if, it is worth it.

How do you know if it’s worth it?

Look at the market structure of your business, and that of your competitors’.

If your business is a monopolistic competition; where a large number of small firms can compete against each other by selling similar yet slightly differentiated products, bidding on their brand is encouraged. For example: if you are a locksmith company, competing against other locksmith companies, using your competitor’s brand as a keyword will bring about brand awareness. In addition, it may also give you an equal opportunity to take that conversion away from your competitor – if your ad copy stands out from the rest.

However, if you are competing in an oligopoly; a market structure that is dominated by a small number of firms, the chances of your bid getting you conversion would be extremely difficult. In fact your cost per acquisition (CPA) would be high – which, in the long run, just isn’t worth the trouble. For example, if you are selling android phones, and you bid on the company Apple, not only will the bid cost you a lot of money, the chances of an iPhone user converting to an android phone is slim to none.

3. HIGH QUALITY TRAFFIC

Intent is key. Bidding on your own brand or the brand of a competitor guarantees that the traffic directed to the search engine results page (SERP) are people who are looking for a product or service that you, or your competitor, provide. In most cases, when someone is searching for a brand, they are at the bottom of the search funnel (i.e. past the research and browsing stage, and looking to buy).

In this case, your chances of gaining that conversion increases significantly. If the individual knows what they want, they are just looking to find the right business – the “right fit” – to spend their money on.

Bidding on your brand as a keyword goes beyond just wanting to make it difficult for other businesses’. In fact, this type of bid almost guarantees that the traffic on this search query page is top notch; people are looking for what you sell, and your type of business.

POTENTIAL RISKS

By bidding on a competitor’s name or brand as a keyword, you’re essentially invading “enemy territory”. It only stands to reason that there will be repercussions to such an act. Apart from starting a bidding war with your direct competition, you run the risk of lowering your click-through-rate (CTR). When someone is searching for a specific brand, they are more likely to click on that company’s ad – even if your ad appears. So unless your ad copy blows their mind enough for them to want to change it, you can be hurting your quality score (QS) each time your ad is ignored. This in turn increases your bid cost, costing you more overall.

COMMON MISTAKES

Now that we’ve covered the benefits and setbacks, let’s quickly go over some mistakes that can be made when bidding on a competitor as a keyword.

First off, bidding on a competitor’s brand name is not necessary for all businesses, particularly if you are a new business. Depending on who your competition is, the cost of bidding can run high – which isn’t feasible for newer businesses. Nor is making enemies out of well-established businesses. What is necessary is making sure you are bidding on your brand name – because there are hardly any downsides to that decision.