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PPC Strategy: Is it Risky to Bid on a Competitor’s Brands?

When it comes to pay-per-click advertising, should you bid on keywords relating to a competitor’s brands and products? There isn’t an easy answer to this popular question. In fact, there are two distinct schools of thought on this matter.

Why it’s Worth Considering to Bid on Competitor Brands

Many advertisers think that bidding on competitor keywords is a no-brainer. After all, the goal of PPC advertising is to identify likely buyers who are interested in buying your products or services. If they are searching for a competitor’s products or brand names, you already know that they are in the market, and might be able to win a sale if you have something similar (or even better) to offer.

In addition, specific brand and product names don’t always get a lot of traffic, meaning that bid prices for those keywords may be low. So there’s a chance you could pay less and find really good prospects for what you have to offer.

Another common reason some advertisers bid on competitors keywords is that the competitor is bidding on your brand terms. This is a motivator in itself to find a way to combat the lost traffic and clicks that your competitor is slicing out of your pie. Instead of bidding on their terms, you may consider using some of AdWords advanced features (like Target outranking share) to ensure you are more likely to place in top positions ahead of competitors for your own words.

The Risk in Bidding on Competitor Keywords

Even with those advantages, there are a handful of compelling reasons to avoid bidding on competitor keywords.

The first is obvious: if someone is searching for a product or service that your competitor offers, there’s a good chance they value that company’s products or services more than yours. In other words, you might be wasting your money because they don’t have any intention of buying from you. Even if you think what you have to offer is superior, the searcher might not.

Secondly, you probably won’t have many of your competitors branding keywords on your own pages, meaning that Google and the other search engines aren’t going to consider your search results relevant. That, in combination with the low click-through and conversion rates that come from advertising to a group that’s looking for something else, means your quality scores are going to suffer. So you’ll almost undoubtedly end up paying more for the clicks and getting less for them.

And finally, when you start bidding on competitor keywords, you increase the odds that they’ll start doing the same. That can drive up PPC prices all around, and could end up with you losing more customers than you were able to gain.

The Bottom Line on Competitor Keywords

Knowing the risks and opportunities involved, it’s fair to say that bidding on competitor keywords probably isn’t a winning strategy for most businesses. At best, it might be something you want to try once or sparingly, to see if you can achieve a positive ROI with the strategy. If you do though, be sure to keep a close eye on your campaigns and quality scores… Not to mention your competitors.

Consider bidding on long-tail branded terms before the more competitive ones. And, be careful not to use any keyword insertion in the text ads… that could end up with your ad accidently displaying your competition’s name.

For the best PPC consultation and advice in Maryland, contact the G3 Group team today.

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