The Do’s and Don’ts of Competitor Bidding

One of the more democratic things about pay-per-click advertising is that advertisers are permitted to target competitor brand names as keywords. Nike could target ‘Adidas’ if they wanted to, and vice versa. This is not to say that you can use their brands in your ad copy wantonly, but it does mean that for ambitious advertisers who want a slice of someone else’s action, adding their competitors’ brand names as a keyword is a real consideration.

Do’s

  • Think carefully about what you are prepared to pay to use this method of growing your business. Calculate the potential lifetime value of attracting customers away from a competitor, and offset that against the likelihood of relatively high CPCs and low conversion rates.
  • Consider whether you are happy to get into a war with a competitor. Their CPCs will be lower than yours for the same keywords due to greater relevance, and they may decide to bid aggressively. It could be a costly waste if your conversion rate is poor
  • Know your market and customers. If your offering is not aligned with, or similar enough to that of your competitors, you may be advertising to people who are unlikely to buy from you.
  • Consider competitor brand keywords if the volume of searches for product or service-related keywords is very low, or when there is one dominant competitor in a niche market where the service or product name has become synonymous with the brand.
  • Be thoughtful about how you use ad copy. What is the competition doing badly that you do well? Be sure to highlight the aspects of your service or product that they may be lacking. While you can’t include their names in your copy, you may be able to get creative and allude to them. “Does Your WiFi Provider Suck? | We Guarantee Better Service”

Don’ts

  • Don’t use your competitor’s name in your ads. Your ads are unlikely to be approved, and if they are, you could be faced with a threat of legal action.
  • Don’t use competitor bidding if your budget is small. Unless your competitor provides a terrible service or product, and is pushing customers away in droves, you are unlikely to make the strategy work as well as when targeting product or service-based keywords. So be smart with prioritising your budget.
  • Don’t assume that you will be able to lure customers away from a competitor. Success will depend on all kinds of elements, from how good your offering is, to how loyal customers are to your adversaries.
  • Don’t neglect to consider what will happen to your reputation if your industry is small, supportive or close-knit. Think about the potential damage when recruiting. Would you prefer to have your competitors as friends?

There are multiple factors that will affect the success of a competitor bidding strategy, so think carefully before diving in, and treat it as a test to begin with.