Navigating PPC Strategy: Advantages and Risks of Competitor Brand Bidding

Competitor brand bidding
Understand the perks and pitfalls of competitor brand bidding

When starting to deal with pay-per-click (PPC) ads, many are stunned to discover that bidding on a competitor’s brand is not only possible but entirely legal – at least when it comes to keywords. Google only imposes restrictions if a trademark appears in a competitor’s ad copy or if it’s used deceptively, causing confusion or misinformation.

Companies often bid on competitor brands primarily to divert traffic to their own site by attracting those interested in similar products or services. Handled aptly, this can significantly enhance your online ad performance. But what if things go South?
Dive into this guide to understand the perks and pitfalls of competitor brand bidding, factors to keep in mind during the process, and how to respond if it happens to your brand.

Why Learn About Competitor Bidding?

The digital sphere is buzzing, with Google having 943 billion searches as of February 2023. Here’s where competitor bidding comes into play in PPC ads: imagine Coke using “Pepsi” as a keyword, thus displaying their own ads when potential customers search for Pepsi.

Source: Pexels

It’s a clever strategy to snatch some attention from competitors. But how exactly can integrating competitor bidding into your PPC campaigns prove beneficial?

The Key Advantages

1. Better Brand and Product Visibility

As emphasized by Amazon in its 2022 research report, brand awareness fosters an identity alignment of company values with customers—a vital factor for 79% of global consumers. Delving into competitor bidding helps put your brand in the limelight, subtly introducing your brand to others via searches for common products.

Thus, each search for your competitor’s offerings potentially converts to an audience for you, essentially turning a competitive scenario into a win-win situation for your brand.

2. Cheaper Bids, Higher Intent

Bidding on brand names can be an economical strategy due to less competition, offering numerous clicks and impressions at a lower cost. But can these clicks morph into actual sales? That’s where targeting high-intent keywords steps in.

Prospects searching for your competitors are likely in the consideration phase, actively seeking similar products, and are thus more convertible than those using generic keywords. If done correctly, it’s a balancing act between cost per acquisition and customer conversion.

Tips When Bidding On Others’ Brands

Executing a productive competitor bidding strategy requires certain considerations. To guide you, here are some critical points to remember:

Don’t assume it works for everyone. Venturing into competitor bidding early or without a robust strategy may not always work in your favor. It’s important to balance this strategy appropriately with your budget and cost-per-acquisition expectations.

Be prudent in choosing competitors. Not all competitors are a suitable target. A wrong choice can lead to fruitless efforts and potential backlash. Identify legitimate competitors using tools like Google Ads‘ Search Terms, Auction Insights Reports, and Google Trends.

● Mind your mobile bid. Mobile users often search with different intentions, like looking up store locations instead of comparing products. Aggressively bidding on competitors’ brands on mobile platforms may backfire due to this unique user behavior.

● Respect the ad copy and consumer perception. While competitor bidding allows you to use others’ brand names as keywords, avoid incorporating these in your ad copy to elude potential issues. Keep an eye on consumer perception to ensure your strategy doesn’t appear desperate or disrespectful.

Common Risks

When engaging in competitor brand bidding, there are certain risks to be aware of.

Customer loyalty, the cornerstone of sound marketing, often dictates the success of small and medium enterprises. Capturing attention via competitor brand bidding might lead to conversions but not necessarily loyal customers.

Entering the fray of competitor brand bidding could also ignite a counterproductive bidding war, raising costs for both you and your competitor. If users click on their ads rather than yours, your quality score may decrease due to lower click-through rates (CTR).

Prolonging this might make everything a pricey venture, possibly requiring budget reallocations or the exploration of more affordable alternatives to target competitor audiences.

What You Should Do When Competitors Bid on Your Brand

As mentioned before, it’s always open season for different brands to bid against others when it comes to brand name bidding. Don’t worry; there are a few things you can do.

Primarily, harness your brand by bidding on your brand keywords. It safeguards your brand from opportunistic competitors trying to steal clicks and helps control your messaging, allowing for diverse ad testing such as A/B tests. Meanwhile, tools like Google Ads’ Target Impression Share can ensure your ads’ visibility and manage bids automatically.

If competitors misuse your trademarked brand in their ad copy, initiate a dialogue to rectify this. If that fails, proceeding with a trademark complaint can substantially reduce such infringements while ensuring fair competition.

Final Thoughts

Your decision to utilize competitor bidding in your PPC strategy entails thoughtful deliberation. The potential advantages of broader visibility, increased click-through rates, and the possible acquisition of new customers must be carefully weighed against potential pitfalls like bidding wars, decreased customer loyalty, and escalating costs.

The ultimate mantra in digital marketing remains the same: to optimally blend varied strategies that best align with your company’s unique objectives and industry dynamics.

At Digital Sprout, we specialize in crafting effective PPC strategies that can elevate your brand’s online presence and drive tangible results. From identifying the right competitors to bid on to managing bids and ad copy, we ensure that your PPC campaigns are optimized for success.

Our team of experts understands the intricacies of competitor brand bidding and can guide you through the process with precision and prudence. Whether you’re looking to increase brand visibility, target high-intent keywords, or safeguard your brand from opportunistic competitors, we have the expertise to help you achieve your goals. Get in touch with us today and unlock the full potential of your PPC strategy.

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Frequently Asked Questions – Competitor Brand Bidding

Is it legal to bid on a competitor’s brand name in PPC campaigns?

Yes, it is legal to bid on a competitor’s brand name in PPC campaigns, as long as you are using the brand name as a keyword and not using it deceptively or in your ad copy. Google imposes restrictions if the trademark is used misleadingly or causes confusion.

What are the key advantages of competitor brand bidding?

Competitor brand bidding can offer several advantages, including increased brand visibility, reaching a new audience interested in similar products or services, cheaper bids due to less competition, and targeting high-intent keywords for potentially higher conversion rates.

How do I choose the right competitors to bid on in my PPC campaigns?

Selecting the appropriate competitors to bid on requires careful consideration. Use tools like Google Ads’ Search Terms, Auction Insights Reports, and Google Trends to identify legitimate competitors with similar products or services. Avoid targeting competitors that are not relevant or could lead to fruitless efforts.

Are there any risks involved in competitor brand bidding?

Yes, there are risks, such as engaging in a bidding war that increases costs for both you and your competitor, potentially lower quality scores due to reduced click-through rates if users click on your competitor’s ads, and decreased customer loyalty if your strategy appears overly aggressive.

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