Competitive Keyword Bidding - Vine Street Digital

Competitive Keyword Bidding: The Pros And Cons

Competitive Keyword Bidding: The Pros And Cons

So you’ve Googled your business name and you notice the top result is your direct competitor! Or maybe they just come up for Every. Single. Search. It’s frustrating to say the least and it’s no secret that companies go out of their way to either find out what the keywords the competition is showing for, or even bid against rival brand names. So, is competitive keyword bidding something you should be doing? Well there are pros and cons to these strategies:



By bidding on your competitor’s keywords/brand, you are targeting your company’s market and promoting brand awareness.
The idea here is that you are trying to reach potential customers who are looking for a similar product or service. By appealing to the broadest possible market, you can hope to grab a lot of reach. Maybe it’s the introduction of a new product or maybe it’s even an accidental click that leads to that next sale.

Presenting a USP that your competitor might not have.
You might have more to offer to the potential customer than your competition. If your ad points out extra benefits, sales, mid-season clearances, free delivery, buy one get one free, spend over $100 and we’ll keep $100, and so on, then you could be earning extra conversions – taking an extra one away from the competition.

Bidding on a competitor’s brand name is often less competitive.
Brand names are usually less competitive than other generic keywords. This means the bids are usually lower and can give you an advantage if you can outbid them.

Can’t beat ‘em? Join ‘em.
It’s a dog-eat-dog world and your competitors will almost certainly be trying to steal your traffic. It does make sense to try and use their tactics to try and win over their prospective customers.



No Competition Analysis Is Perfect.
Nobody really knows what Google is thinking. Google’s algorithm is changed around 500 times per year so it’s hard to quantify a totally 100% accurate analysis.

Legal Liability.
It’s rare to receive a cease and desist notice but you should always consider the liability of using competitors search terms and ads. Some may be protected and getting into a negative relationship with a competitor might end badly for both sides. Especially if your ads are downright plagiarism.

Bidding War.
Your bids may drive more searches to your landing page, but if your competitor realises this then you could be in for an all-out war. They may start bidding on your branded terms to drive up the cost, leaving you with little results when customers are searching your own business!

Low Click Through Rate (CTR).
The exact details of Google’s Quality Score system may be a closely guarded secret by the company, but we know that a low CTR definitely means a low score. Your ad position may be higher, but if your CTR is lower, at the end of the day you are paying more for CPC (Cost Per Click).

Small Fish Big Pond.
Again, on the topic of quality score – if you are bidding on your competitor’s search terms, then your relevancy is likely to go down as your landing page usually won’t (and shouldn’t) have your competitors brand in it. A low CTR is likely to push up the price of your CPC and if you are working with a small budget you might find it has been reached prematurely.


But Who Are Your Competitors?

It is up to you to decide who you go up against. Keep in mind though; there’s no point in going up against a competitor you have no advantage over. If you don’t have a USP (Unique Selling Proposition) or differentiation, then you may as well just be throwing money into a bottomless pit. It goes without saying as well: don’t try and compete with everyone. Just as Apple has its Microsoft or Coke has its Pepsi, you need to find those few competitors out there who are the most threat to your business. It might be a good idea to do a proper analysis of the market before deciding your rivals.


Is It A Good Strategy For You?

Competitive keyword bidding is not for everyone. It all comes down to you, your budget, what you want your brand to represent and other marketing metrics.

If you have a small budget, consider the risks of bidding on your competitor’s keywords and brand names. The low-quality score of these keywords will push your CPC higher, and it should be considered that some customers may accidentally click on your ad, leading to little conversions.

However, if you do have a higher budget and can negate the penalties for being less relevant, then it could be a viable strategy to help win some of the traffic your competition is taking off you. At the end of the day it is a costlier strategy and you must be prepared to lose some profitability on keywords.

Your overall goal should be to try and grab some extra customers without stepping on your competitors toes too much. It can be hard determining whether to be more aggressive in your PPC approach, that’s why it’s worth taking the time to sit down and really think about it.

Want more specific detail or advice? Get in touch with us and we can help you to get on the right track with a strategy that’s tailored to you.

Written By Oliver Clark