Should You Bid on Your Competitor’s Brand Name?

A conversation I have with nearly every business that I work with is around competitive bidding. Should we do it? Should we not do it? What are the benefits? What are the drawbacks? And invariably in that conversation, I end up frustrating everybody that I work with. Because as we all know, in PPC, “it depends” is a very common answer. But in this scenario, I actually have a worse answer. My answer is, “what do you think?” Because when it comes down to it, I’m a firm believer that businesses should decide for themselves if competitor bidding makes sense for them. So my side of those conversations always focuses around talking through some of the main points of competitor bidding. Then I give some of the pros and the cons and talk through some best practices around competitor bidding and I leave it up to the business to decide because there really are some ramifications that can impact not just the PPC space, but also their entire business as a whole. 

So today, I want to run through what my side of that conversation looks like. I want to give you a couple quick examples of competitor bidding just for those of you who aren’t familiar, then I’m going to talk through the pros and cons and give you some best practices to decide if competitor bidding is right for you. 

I want to start by showing you an example of what competitive bidding looks like and I’m going to use a couple of brands that most of you are probably familiar with. Right now, I’ve googled Instapage, the landing page software. You’ll see that Unbounce, the other landing page software, actually shows up first in the search results with Instapage. Down below this is effectively what competitor bidding is: you bid on your competitor’s brand name to get your brand name in front of those users, rather than having their ad show up. 

First, as you can tell, this is pretty valuable real estate. You can already tell that somebody is looking for landing page software, even if they already have a brand name picked out. So you’re probably targeting the right user. And Unbounce is probably getting in front of the right type of people because they’re already searching for Instapage. 

But as I mentioned in the intro, there are going to be some pros and cons to this strategy. So let’s go ahead and talk through those. We’re going to start with the pros. The first one I already talked about a little bit in the previous slide: we’re going to get in front of potential customers. In theory, if you’re bidding on a true competitors brand name, meaning that you compete with them for whatever you provide, customers could choose to go with either one of you. If they’re searching for that competitor’s brand name, in theory, they should be able to work with you as well. So this should be the right type of users because they’re searching for your competition. And you could try and steal away those customers. 

Next, you can bid on any variant of your competitors brand name. The example we just showed with Instapage versus Unbounce is an example of bidding on the head term or a short tail keyword because it’s just the brand name that was in there. In a little bit, we’re going to talk about how you can bid on some longer tail keywords as well, because you’re allowed to bid on any version of the brand name that you want. You can bid on any keyword that you want on Google and Microsoft. 

Next you can pay to outrank your competition. Obviously, SEO has a very big impact on where you end up showing up in the search engine results pages. It’s a very important digital marketing strategy, but there’s almost no way for you to overcome your competitors’ ranking for their own name. So PPC allows you to outrank your competition and vie for that top spot like we showed in the previous example. 

Lastly, one of the benefits of competitive bidding is that the cost per click is usually lower on your competitor’s brand name than it would be on a non-brand, generic type of keyword search. If we just search for landing page software, the CPC that results from that search are most likely going to be higher than they would be if we were bidding on either Instapage or Unbounce. So sometimes this can be a way to get slightly cheaper traffic to come to your website who are, in theory, just as qualified as those people searching for landing page software. 

But as I mentioned earlier, there is a downside to bidding on your competitor keywords. So now let’s go through the cons of bidding on competitive terms. 

The first one is the biggest reason people typically don’t run competitor campaigns. That’s retaliatory bidding. Effectively, what this means is that if you start bidding on your competitor keywords, they will more than likely notice that you’re doing it and they will start to bid on your brand terms. And that has a couple different effects that most businesses simply don’t want to tolerate. Overall, now that you have more people bidding on your brand term, the cost per click gets more expensive, because there actually is competition. So your brand terms just got more expensive, which almost invariably means that they are less profitable than they were before because that cost per click, that cost per acquisition, went up at the first stage of the buyer funnel. 

Second, most companies like the fact that they can own the search engine results page for their brand and they don’t want to lose that share of voice on the search engine results page. So when other competitors start to bid on your terms, you’re no longer the only person talking about your brand. Now you have to beat out your competitors as well. These are the biggest reasons that most companies do not to run competitor bidding campaigns. 

Another downside is you cannot use the brand name in your ad copy if it is trademarked. We talked about how you can bid on any variant of the keywords. There’s no restriction on what keywords you can bid on. But there’s no way for you to use a brand name in ad copy that is trademarked and you don’t own that trademark. So it makes it hard to stand out from your competitors. If you are trying to call them out specifically, you can’t end up using that language in your ad copy, or else you will get flagged for trademark and your ad simply won’t run. 

The last downside ends up being very performance based. Typically, competitor campaigns have very low click through rates, very low conversion rates, and very low quality scores. Although in theory, you should be bidding on the right types of people because they’re searching for your competitors, they are actively searching for your competitors. They’ve already chosen a brand that they want to work with and they’re trying to get in touch with that brand. So winning them away is very difficult. We typically see click through rates very low on competitor keywords. Same with conversion rates and quality scores are also very low. We have a video that talks about quality scores and how you can see all the different factors of that. And in that video, I said that quality scores aren’t the end all be all of performance metrics, but it is a gauge of how hard it’s going to be for you to enter that auction and the highest quality scores I’ve pretty much ever seen on competitor keywords are three. Just think about that. It’s not necessarily the dagger in the heart for whether you should decide to do it or not, but it is going to be an uphill battle bidding on these competitor terms. 

If you do decide to run competitor campaigns, there are some best practices that you can utilize to make sure that you get the most out of it. And these are the things that I tell the businesses I work with. If they decide to go down this path, we need to make sure that we have these things in line so that we’re going to see the best possible performance that we can get out of that. 

The first is to choose your keywords wisely. This is what I was talking about earlier when we can use longer tail keywords to bid on competitor terms and maybe be a little bit more strategic. The first example I showed you was Unbounce bidding on Instapage’s head term. It was just their brand name, but you don’t always have to do that.

Let’s take a second example. Salesforce is a very big brand name and here you can see that they are the only ad that shows up on their brand name. I scrolled to the bottom of the page for this results page. There are no other ads here. This could be the influence of Google just saying that Salesforce is the most relevant but on top of this. Think about how successful Salesforce has been and how many people that you know use Salesforce. Odds are Salesforce is not going to tolerate other brands bidding on their keywords. They’re simply not going to do it. They’re always going to outbid you. It’s going to be hard for you to win their customers away. And it’s going to be really hard to win away any share of voice from Salesforce. 

But that doesn’t mean that you can’t be more strategic. Think about people who are searching for Salesforce customer service or Salesforce replacement. There are going to be people who already know Salesforce, but they either are not happy because they need support, or they want to replace it or they’re trying to make a change. These are some longer tail replacements that you can use to get in front of people searching for Salesforce but who may not be happy with Salesforce and are trying to move away from it. Still includes the brand name, but you also won’t be causing nearly as much problem for Salesforce and they likely won’t retaliate and bid on your keywords. 

As you can see here, Salesforce isn’t showing up in any of these ad results, which probably makes sense for them. But it also means that you’re probably going to fly a little further under the radar if you bid on some of these longer tail keywords instead of the head term. 

The next thing I always encourage people is to have dedicated landing pages. If you’re going to bid on a competitor’s brand name, you need to talk about that competitor on your landing page. You need to show why you are different, why you are better and be very confrontational in these landing pages because you are actively trying to win away somebody who was already going to work with that other brand. So you have to show how you’re going to beat that other competitor’s experience. 

Going back to the first example that we used with Unbounce and Instapage, this is the Unbounce landing page that you would go to if you were to have clicked on the ad like I did. You can see here it has a very direct call out to Instapage right at the top of the landing page. Although this might not be the entire story when it comes down to how these two compete, they are directly addressing it and that’s going to help them win over people who originally want to work with Instapage. 

My last suggestion is to only compete where you can make sure that you are calling out your competitor and how you beat them. But don’t always call out the things where you can’t beat them. I’m going to continue with the Instapage and Unbounce example because further down that landing page, you would see this chart that shows Unbounce is a bit cheaper per month, it’s got unlimited users versus Instapage having a certain limit, and it has unlimited landing pages again where Instapage has a limit. Now this is by no means the entire comparative experience of how Unbounce can support you and Instapage can support you. I have seen many instances where Instapage was the right option to go with for certain business and other ones where Unbounce was, but you’ll notice here, they’re only calling out the areas where they can compete. This paints a very rosy picture of Unbounce compared to Instapage. And it would be a very compelling set of information to look at if you were trying to decide which landing page software to go with. So again, I don’t want this entire video to be about Unbounce versus Instapage. We think they’re both wonderful and we actively use both of them for different businesses for different reasons. But again, you can see here that Unbounce is doing a pretty compelling job saying that they are a better option than Instapage to support you. 

Once I’ve laid out all of these different things to the businesses that I work with, again, I leave it up to them whether they want to do competitor bidding, or their longer tail keywords we can go after to fly a little bit under the radar. Is their brand performance profitable enough that we could weather an increase in costs? Are they actually a better solution than their competitors to a point where we would feel comfortable calling out the differences on a landing page? Similar to how we see in this example, that’s all up to them. I can’t make that decision for them. 

So hopefully with this overview, you now have a little bit better understanding of the potential pros and ramifications of running a competitor bidding campaign and I help you make a decision for your business or at least help you guide your clients through the same decision process so they can decide if it’s right for them. I know competitor bidding is one of those things that some people really love it other people really hate it, and people have had mixed experiences. So I’d love to hear about your experiences or any other thoughts you have around competitor bidding in the comments below.

Written by Michelle Morgan