This is a recent question we were asked by a client when we began to notice that their competitor was appearing in ads when searching for their company name in Google. It raised an interesting discussion, so we thought it was the perfect opportunity to write a blog post and look at this topic in a little more detail.
"So, are they allowed to bid on our brand terms?"
The short answer we gave our client was yes, they are allowed! Bidding on a competitor's brand search terms is completely legal, as long as they do it correctly. Whilst they can't create an ad that pretends to be you and then links to their site, your branded search term is fair game to bid on.
Why would you bid on a competitors brand term?
So, before we get into what you should do if a competitor is bidding on your brand, we wanted to explain some of the pros and cons of this bidding ad strategy.
Cheap Clicks - whilst not always the case, brand keywords in some circumstances can get you in front of your target audience for a relatively low cost. This is because many companies will not be bidding on their own brand terms as they already appear in spot number 1 organically. Be mindful though, that if your competitor is bidding on their own brand, you will need to pay a higher price.
Qualified Traffic - another benefit is any click you receive on your ad should be well qualified. If the user is searching for your competitor by brand name, it is likely they will have a higher intent and as a result, more likely to convert.
Increased Brand Awareness - one of the biggest benefits of bidding on your competitor's brand terms is using it to get your brand out there and in front of potential customers. It's a great way of introducing yourselves and saying "hey, we also offer these great services and products".
Lower CTR - the CTR when bidding on a competitor's terms will be lower than when compared to bidding on your own branded terms. This lower CTR can lead to a lower Quality Score, ultimately having an ad that costs you more money.
Starting a bidding war - if you are bidding on your competitor's terms, be prepared for them to do the same to you. This is something you have to consider when weighing up whether this strategy is worth it.
"So what do we do about our competitor bidding on our brand?"
This was the second question our client asked us after we told them that bidding on competitor's brands is perfectly valid! The first thing you need to do is assess whether there is anything to do!
The first thing to do is to get a clearer understanding of which competitors are targeting your brand term. In this case of our client, we discovered two competitors who were running ads using our client's company name. After reviewing the competition and their offering, and looking at the data to determine they hadn't suffered a drop in their CTR, it was decided that no action needed to be taken. However, if this wasn't the case, there are a couple of routes we could have explored.
The first would be to increase our client's own brand spend. We've avoided doing this historically with our client as their site performs so well organically and there has never been a need to pay for traffic that you would naturally have picked up. However, if you have the budget available to do so, bidding on your brand terms can help to ensure you don't lose out on any digital ground to your competitors.
There are other benefits besides protecting from competitors; you can use these ads to drive traffic to specific pages on your site, as well as use ad extensions to provide users with additional relevant information that can help with lead generation.
Another option you have is to fight fire with fire and bid on your competitors branded search terms. It stands to reason that if they have found a benefit to doing it on your terms, you could also find a benefit.
However, whilst this may expose your business to a relevant audience who is in the market for your products/services, the potential of entering a bidding war with your competitor, as well as damaging your overall account Quality Score, can make this a risky strategy. This has all the same downsides for you as it does for your competitors bidding on your brand and is not likely to convert as well as brand searches for your own name so could be a costly exercise.
PS. Is your brand name trademarked?
Whilst we started this blog by saying competitor bidding is fair game, what is prohibited is using trademarked terms. If you find that a competitor is using specific terms that have been trademarked, you will be able to submit a complaint to Google for a trademark infringement.
Competitive keyword bidding is certainly not a strategy that works for every business. However, that doesn't mean it can't work if done properly. Used correctly and at the right time, competitive bidding can be an effective tool for your PPC activity. If you want to talk more about PPC advertising and are looking for some advice, drop us a message and we'd be happy to have a chat.