Is Bidding on Competitor Terms Still a Valid Strategy in 2019?

2008: the year Obama was first elected, Heath Ledger died, and the Lehman Brothers filed for bankruptcy. It was also the year Google allowed advertisers to bid on their competitor keywords for the first time.

A decade on, you don’t need me to tell you how dramatically the Paid Search landscape has changed (you’re not the only one with automation blog post-fatigue).

So, given in-market audiences, detailed demographics, target CPA, and the increasingly large amount of data points available – is bidding on competitor terms still a valid strategy?

Maybe. Sorry, hopefully you weren’t expecting a definitive answer.

Let’s break this down the old-fashioned way: in a good old pros and cons list, so you can determine whether competitor bidding is the right strategy for you.

Pros

1. Increased Share of Voice in your Market

If one of your main objectives is to either defend or grow your share of voice, appearing on searches for your competitors could be crucial – particularly if you occupy the same price point.

Whilst your CPCs will be higher than for Generics (terms that don’t contain your brand name or the name of your competitors), that ought to reduce the amount of competition you’ll be facing.

2. Appearing in front of Potential Customers further down the Funnel than Generics

Clearly, a lot of work has been put into automated bid strategies from Google under the guise of attracting the most conversion-likely individuals.

But what says “catch me, I’m a converter” more than a brand search? Nothing. And it doesn’t always have to be your brand.

We’ve seen very strong CPAs on competitor campaigns across verticals, despite their expensive CPCs, so it very well might be an investment that’s worth making for you.

3. More Data on their Customers

Data. We bloody love data. And if you bid on your competitor’s terms, that means you get a load more of it.

You will be able to estimate the volume of searches for their brand, see who else is bidding, and analyze the demographics of people searching. That could give you some crucial insight into yours, and their, USPs.

Cons

1. Bidding on Competitors is Expensive

I’ve alluded to it a few times, but competitor bidding is expensive. It just is.

Given that you cannot use other organizations’ trademarks in your ads without their consent, your ads are going to be “irrelevant” (in Google Ads’ terms) to the search. Same with your landing page.

That will push up your CPCs and you’re likely to pay at least 10x what your competitor does for the same search.

Bear in mind also, if you put out engaging ad copy (which I hope you would), your CTR shouldn’t be low either. That will compound the cost.  

2. Your Competitors will know – And you may Pay the Price for that

As soon as you start bidding on someone else’s brand, they are going to find out.

That might be through you appearing in their auction insights data, or just through their marketing team seeing your ads.

If they are bidding on their brand terms, they are not likely to notice their CPCs inflating, so if vengeful business if your thing, you’re out of luck here.

That’s because they have a massive advantage in terms of ad and landing page relevance (as you would for your own terms – if you’re not paying next to nothing for your Brand keywords, speak to your agency, now).

So, a new competitor appearing is unlikely to inflate their CPCs very much. But what it will do is irritate them (in mild terms). And they may wage war, especially if their resources are equal or greater to yours.

And if they do that, it may very well attract your customers and drain the revenue you’ve earned from that extra competitor bidding cost.

 

So what should you do? If you have the budget, test. Always, always test.

Start a low level, maybe just one Brand Exact keyword, aiming for 20% top impression share, and see what leads you drive.

From there, as you should with every decision in Paid Search, formulate your strategy around the results.

Oh, and remember to monitor your own brand auction insights in case of unwanted invasions.

Amy Hawkins
About Amy Hawkins

Amy joined Clicteq in March 2019 as a Paid Search Account Manager. She has a wealth of experience in managing enterprise retail and lead generation paid search accounts including BMW, Hive, Secret Escapes and iRobot.

Leave a Reply

Your email address will not be published. Required fields are marked *