It’s a bit of a shock when you search for your brand name on Google and you find the ad of a competitor appearing at the top of the page. It can cause a lot of stress, panic and leave you asking a lot of questions. Is this allowed? Can I do the same to them? What can I do to prevent it? In this blog post, we’re going to provide you with some answers to these questions to leave you feeling well equipped to deal with these situations.
The first point we want to discuss is whether this type of activity is allowed. The answer is yes, competitor bidding is allowed. We refer to this as competitor bidding as essentially you are bidding on a competitor’s brand name. There is nothing stopping competitors from setting up keywords to target users who search for your brand. This plays a part in the strategy of many PPC accounts, although there’s pros and cons of doing it (which we’ll discuss throughout).
One main restriction is that if your brand name is trademarked, the competitor will not be able to use your brand name in their ads. These ads are likely to get disapproved and you can submit a complaint to Google to prevent this happening again.
Can you do the same to them, by bidding on their brand name? In short, yes you can. But it is not recommended. You’ll get into a bidding war and will end up spending lots of your budget on these terms. Competitor keywords tend to perform very poorly. The reason being is that the costs associated with this activity are usually very high. Google uses a metric called quality score to determine which ads are relevant to the user’s search. If a user is searching for your brand, but an ad appears for a competitor brand, the relevance of that ad will be low and user journey very poor. Therefore, in order to win the click, we would need to pay a lot more for it. Partner this with very low conversion rates and it’s difficult to make a case to partake in competitor bidding.
Of course, this may form a part of your strategy and if your goals are more about gaining market share from your competition and not necessarily sales/revenue based goals, then competitor bidding may be a good idea. Also, if you have a competitive advantage over your main rivals, you may choose to bid on those brands to raise awareness of your brand and alert users why your brand is much better than theirs!
The final part of this post is to look at our options when we find a competitor bidding on our brand.
The first option is one we’ve already discussed: doing the same to the competitor by bidding on their brand name. As we said, this is an expensive option and let’s face it, is a little bit petty. We won’t get the results that we want from doing this as competitor keywords have very high CPCs and very low conversion rates.
The second option is to ensure you are bidding on your own brand name. This is a much better option. If a competitor is bidding on your brand name it’s likely that your organic listing will be pushed down the results page and perhaps below the fold on a mobile device. A simple, but effective technique is to ensure you are bidding on your own brand name to maintain top positions. Earlier, we mentioned quality score and this plays an important role in this type of activity. The relevance of your brand ad appearing for you brand name when searched is very high, therefore you’ll be rewarded with a high quality score (nearly always 9 or 10 out of 10). The quality score of your competitor’s ad appearing for your brand name will be very low (nearly always lower than 4 out of 10). Therefore, it’ll be much easier and much more likely for your ad to appear in the top positions, bumping your competitor down the page or even below the fold.
The third option is to increase your bids on your brand keywords. By this stage, you will already have your brand campaign running or have set it up as recommended in option 2. Perhaps your competitor’s ad is still outranking your brand ad, even though you have a 10/10 quality score. If this is the case, we need to get a bit aggressive with our bidding. We’re going to introduce the concept of ad rank which determines where on the results page your ad will appear. It takes into account the quality score and your bid and decides in which position your ad will show. As we’ve discussed, our quality score will be much higher than our competitor’s as our relevance is higher. If they are still appearing above us, it’s likely that their bids have been set very high to try to outrank us. In order to overcome this, we need to make it even more expensive for our competitors to appear, eventually causing them to concede defeat and stop bidding on our terms. This strategy is likely to result in an increase in our own CPCs for a while, but as soon as we see our competitors drop off, we can reduce our bids back down (until the next time it happens).
In summary, competitor bidding is something that will continue to happen and is likely to happen to your brand at some point. If you already bid on your brand on Google Ads, it’s easy to see which (if any) competitors are bidding on these terms by using the auction insights report. If not, it’s important to run regular spot checks on Google to ensure you have the visibility you need on your brand name.
We strongly recommend setting up a brand campaign to make sure your ads appear at the very top of the page and to protect against any potential competitor activity. If competitors continue to outrank you in the top positions, don’t be afraid to get aggressive with your bids. You’ll have the higher quality score and can therefore dictate what your competitors must pay for a click on their ad.