Bidding on Competitors: Shady Tactic or Smart Move?

For as long as I can remember, the question of whether we should bid on competitor brand names in paid search has been a hot topic; however, a few weeks ago, Jyll Saskin Gales began a discussion around the ethics of bidding on competitor brand names which got me thinking.

Some consider bidding on a competitor's brand name a sneaky, underhanded tactic, while others consider it fair game in the competitive world of paid advertising. After all, it's a legal and permitted practice within Google's policies.

Personally/Professionally, I don't view it as inherently unethical. As Amalia Fowler mentioned, as long as you're not actively impersonating the competitor in your ads or engaging in trademark infringement, it's a permissible (and often very effective) strategy. However, there's no denying its potential downsides – those higher CPCs and the threat of bidding wars can get ugly and drain your budget quickly!

Why Consider Competitor Bidding?

Poach Potential Customers: By bidding on competitor brand names, you can target users who are already interested in your competitor's products or services and present your brand as a viable alternative. This can help capture demand and potentially steal market share.

Increase Brand Visibility: Even if users don't click on your ad, seeing your brand's name next to your competitor's reinforces awareness and can help establish your brand as a competitor in the same space.

Gain Competitor Insights: Navah Hopkins brilliantly demonstrated with her Dynamic Search Ads trick that bidding on competitor terms can provide valuable insights into the keywords and search queries associated with their brand, which you can then use to fuel and optimize your campaigns.

Defend Your Brand: If competitors are already bidding on your brand name, you may want to consider launching a defensive campaign to ensure your brand maintains visibility and doesn't lose out on potential traffic and conversions.

Before You Dive In: Potential Drawbacks

It Can Get Expensive: Be prepared for higher-than-average CPCs when bidding on competitor brand names. You'll likely enter a bidding war with your competitors and other brands vying for that valuable traffic.

Retaliation is Likely: If you bid on their keywords, your competitors will probably retaliate by bidding on your brand name as well, driving up your costs and creating a potentially never-ending cycle of escalating bids.

Assess Your Goals: Before embarking on a competitor bidding strategy, carefully evaluate whether those resources would be better spent on strengthening your own branded campaigns, exploring different channels, or investing in other areas of your marketing efforts.

Brand Reputation Risks: While not inherently unethical, bidding on competitor names could be perceived as aggressive or deceptive by some users, potentially damaging your brand's reputation if not executed carefully.

The Bottom Line

Bidding on competitor names in Google Ads can be a risky but rewarding game. If you decide to play, be strategic, monitor results closely, and always keep your brand's reputation in mind. Consider testing it on a limited scale first, and be prepared to adapt your approach based on the results and any competitive reactions.

It's your turn! I'm curious — where do you stand on the ethics of competitor bidding? Have you tried it? What were your experiences and results? Share your thoughts and insights in the comments below!