Bidding on competitor’s brand terms

By SpiderGroup

17 Jan 2016

"PPCTo bid or not to bid…on your competitor’s brand terms. Although sometimes frowned upon, Google says there’s no restriction on bidding on a competitor’s brand name in your PPC campaign. But is it legal, is it safe?

The Marks and Spencer v Interflora case springs to mind, when M&S were taken to court for bidding on “Interflora”, for claims of trademark infringement. The court ruled that the nature of the ads suggested some kind of association between the two companies, which meant M&S lost the case, scaring PPC specialists everywhere.

This has since been appealed by M&S and six years down the line, the PPC war continues. But it doesn’t have to be this complicated. Here is what you need to consider before you bid on *insert brand name here*.

Trademark Infringement

If you’re going to bid on a competitor’s brand term, you have to be careful with your ad copy. To comply with AdWords policy, don’t include your competitor’s trademark or branding in your ad.

"business"Create rivalry

As is clear from the prolonged M&S and Interflora debacle, bidding on your competitor’s brand terms may create unwanted rivalry. It’s possible that your competitor might then start bidding on your own brand terms and start some kind of intense bidding war.

But it’s not just the bidding rivalry you should be worried about – if you are competing with a shop in the same high street as you, then you might have to prepare for personal confrontation. If your businesses are national then this is likely to be less of a problem – unless you are M&S, of course.

Low CTR, high CPC

Because a customer might have that one specific brand in mind when searching for it, your own ad will have a lower click through rate. It will also be pricey for clicks as you will not have the brand term in your landing pages or ad copy, resulting in a lower quality score. But don’t let this put you off.

Less competition

Fewer companies will be bidding on brand terms compared to generic phrases, so there will be less competition to reach the infamous top of the search results.

"PPCOpportunity to poach customers

It’s more than likely that you will offer the same products or services than your direct competitor. So bidding on their brand terms can grant you a last ditch attempt to steal their traffic. By including your own USPs, you might be able to persuade a customer to click on your ad instead.

If you are a new company trying to break into a heavily saturated industry, then your customers might be more likely to Google your competitor’s brand names rather than the actual name of your product. Think of big brand names that have become interchangeable with their product like Hoover, Fairy Liquid or Coca Cola and you can see how it would be a huge disadvantage to only bid on the product name.

Healthy competition

If a competitor is bidding on your brand terms, then why not bid on theirs? Some healthy competition never hurt anyone.

Do think before you go in guns blazing, bidding on brand terms left, right and centre. And be warned that you may face some backlash, but bidding on competitor’s terms can be profitable and help you attract additional customers.

If you’re still a bit unsure on the best approach, why not get in touch with SpiderGroup? We are a digital marketing agency in Bristol, with PPC specialists at hand. For more information, call us on 0117 933 0570 or fill in our contact form.

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