The competitive nature of pay per click advertising opens one potentially lucrative avenue to advertisers: bidding on your competitors’ keywords. Is it worth doing? Let’s explore the options.

You will commonly see advertisers bidding on competitor’s keywords. In the example above, we can see four advertisements for a search for the well-known drains clearing company Dyno Rod. The first ad is Dyno Rod itself, using advertising to protect its brand position.

The adverts in positions 2, 3, and 4 are competitors, leveraging Dyno Rod’s dominant market position to raise their own brand awareness, and potentially encourage searchers to click on their own website instead of going to the Dyno Rod website.

And of course, this competitive marketing technique is also prevalent in the legal sector. Below you can see an example of advertisers capturing search traffic for the brand name Irwin Mitchell:

In this example you will see the competitor is very effectively leveraging the options on Google AdWords called “extensions” to include their local phone number, and their review stars.

And you can see another example here for the brand Slater and Gordon:

There are three main reasons for bidding on your competitors’ brands and keywords, known as ”brand bidding”:

• Cheap traffic. Brand name keywords (with the exception of a few) are relatively cheap clicks compared to generic keywords in AdWords.
• High quality traffic. Although you will not receive lots of the traffic for these searches, the traffic you do attract will be very well qualified. The majority of the clicks you receive will mainly be people looking for legal services, and the traffic has high intention and is likely to convert.
• Brand exposure. If people are searching for a competitor offering similar legal services, then you can raise awareness of your own firm. By advertising on these keywords you can start to make these potential customers aware of your brand name and what you can offer.

Is it legal?

Is it legal to bid on your competitors’ keywords and brands? In a word, yes.

Google has a quite simple set of search advertising guidelines that cover issues including trademarks, and it is the protection offered by trademarks that is key to this discussion.

Google respects the protection offered by a trademark, but in general this does not extend to the selection of the keywords you are bidding for. So, in the above example, the two advertisers are acting legally in bidding for the phrase Dyno Rod provided:

• that trademarked text is not included in advert copy; and
• that the advertising copy does not confuse the user as to the origin of the goods or services.

Google rese rves the right to investigate using trademark terms, for example in the adverts’ Display URLs. And it does have a catch-all clause for buyer beware:

“Google is not in a position to make recommendations regarding the use of terms corresponding to trademarks. If you have further questions, we encourage you to contact your legal counsel and consult the AdWords Terms and Conditions.”

How to use competitor names

Now, let’s get down to the practicalities of bidding on your competitors’ brands and key phrases.

Always include an offer or USP in the ad copy

This is good practice for any AdWords ads but it is made even important when targeting competitor’s keywords. The potential customer is searching specifically for a competitor of yours. This indicates that they are already aware of that company and it will take something unique and eye catching to draw them away from the brand they already know exists. This will obviously not work with all customers but you can expect some relatively cheap traffic to your site.

Always bid low

The aim of this campaign is not to sit number one in the Google results page. Ideally you would like to position yourself just below your competitor (assuming they are bidding on that keyword). This ensures that you do not receive too much traffic to the site and your quality score is hit as a result of a high bounce rate. If your ad sits lower you will receive clicks from people that are mostly looking for an alternative company to the one they searched for.

Don’t include the competitor name in your ad

Not only is this bad practice and misleading to visitors it is actually against Google’s trademark policy. It is easy to avoid doing this when creating your ad copy. However, you must be careful when it comes to using dynamic keyword insertion (which allows you to customise an ad to a searcher’s search query). It is strongly recommended that you do not use it as it will more than likely lead to a competitor keyword appearing in your ad thus violating Google’s terms.

Don’t start a bidding war

Starting a bidding war will only result in one loser and that is you. Some theorise that bidding a greater amount will force competitors to pay more to advertise on their own brand keywords. Whilst this is to an extent true, the repercussions to your campaign far outway any damage you might be doing to your competitors. It is most likely that your competitors’ quality score for these keywords is 10 (if not, then very high) so you will always lose out when it comes to trying to achieve like-for-like clicks with them. It is also likely that a proportion of the traffic from these keywords will not be interested in your company at all; they will simply be looking for specific information based on that brand. By attracting this traffic you will lower your quality score and drive up your cost per click.

Finally it is important to understand that although Google do not state that you can’t bid on competitor keywords it is very important that you are not seen to be misleading visitors.

Susan Hallam is Managing Director of Hallam Internet Limited, a full service digital marketing agency providing search engine optimisation services, digital strategy development, social media campaigns and paid advertising services. Email susan.hallam@hallaminternet.com. Twitter @susanhallam.