Competitor Bidding is bidding on another company’s branded terms within your business related keywords. This practice can seem risky and does have downsides however it can also have great rewards.

During the current uncertain climate we have seen big name brands decrease their bidding on branded terms and overall PPC spend. For example, Amazon have decreased their budgets within Google which can be seen in the graph below (Figure 1).

Figure 1 – Source: https://tinuiti.com/blog/marketing-news-covid-19/amazon-reduces-google-shopping-and-text-ad-advertising-prioritizes-essential-products/

This has also been the case across different retail sectors where the CPCs have been reducing as can be seen in the figure (2) below.

Figure 2 – Source: Tinuiti.com

If the CPCs in your accounts decrease as a direct result of less competition it could be a good time to start increasing your search terms and adding in competitor terms to capitalise. The new customers you gain could be a long term benefit if they return to your website through your branded search terms, resulting in lower CPCs and higher ROAS.

Is competitor bidding beneficial for your business?

Benefits

  • Increase in traffic from bidding on these competitor terms
    • This can have an improvement on your overall impression share and increase your visibility in the auction insights report. In the long term, these can then have benefits for your account by generating more sales & leads.
  • Boost presence
    • Greater presence in the SERPS. Adding your competitor search terms to your keywords makes you visible to relevant customers who may not have heard/searched you before but have now been exposed to your business by you showing for their intended brand. In the current market orders/leads are critical. This can help in the long and short term.
  • More Google Shopping slots
    • Allowing your shopping ads to be visible for competitor terms will allow you to take up more slots within the shopping positions. Try the strategy search query filtering in your shopping campaigns and see how the competitor terms perform versus your branded or generic terms.

Negatives

  • Cost
    • Do you have enough budget to compete? If your competitor is highly established and always seems to be visible in the SERPS, you may need to question if you have the budget and right intent to go after them. If you begin to compete with them, they could begin to bid on your brand terms 10x higher meaning you end paying more to be visible.
  • Return
    • Branded search terms can be less expensive but if competitors begin to bid on your branded search terms, these can inflate the CPCs and consequently affect your ROAS. If you are a company that are quite reliant on your branded terms and have a limited budget, I would not recommend this as you could begin to lose all of your hard work from the branded terms and sales/ROAS from these will begin to decrease. Think of your KPIs.
  • Quality score
    • It is unlikely that the competitors’ brand name is featured on your landing page or ad copy so your quality score for that keyword is going to be particularly low and could stem from having a poor CTR. Having a poor quality score can inflate your bids so you will need to weigh up if you are gaining a good enough amount of traffic vs the return you are seeing in either ROAS or CPA.

Tips on bidding on competitor terms

  • Have a strong headline in your ad. What is your key USP (unique selling point) for your brand? What do you want to be known for? Do you have a strong offer?  Make sure the copy stands out. This will instantly make the customer who sees your ad understand what you can offer versus their intended brand.
  • Avoid Search campaigns if possible and target competitor names through shopping campaigns only. These usually have a cheaper CPC and are less obvious that you are intentionally going after your competitors. You are also able to take up more slots with the shopping space which in turn will increase your impression share.
  • Avoid using phrase match or broad match. You don’t want to show for all terms relating to your competitors nor do you want to spend a lot. By bidding on exact keywords you can lower the costs and have more control over what you show for. The exact terms can be a mixture of searches relating to their website, products (priorities to you), branded & misspells. See which convert for you better and target those ones, not all terms.

Summary

Always think strategically when competitor bidding and don’t think that this approach needs to be frequent. Only bid on your key promotional dates and plan accordingly to ensure that you own the SERPS. If you are a retailer think of big public holidays like Black Friday & Christmas. 

Review your budget and only look to compete with your competitors if you are confident you can do so, and avoid a bidding war where you are both then just paying for branded terms to be visible, rather than gaining a return.

Finally, utilise shopping campaigns where possible rather than search campaigns. These usually have a low CPC and may be less obvious to your customer you are a direct competitor. 

Used correctly and at the right time, competitive bidding can be an effective tool when used with purpose.


Claire Henley

PPC Executive

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