We’ve all seen it by now. You’re searching for Steve Madden boots or your favorite restaurant, and not only are you given choices in the main search results — you also get several ads that are associated with what you’re looking for.
Many times those ads directly relate to your search, but every now and then, you may notice an ad that doesn’t match up.
Is this an accident or a competitor’s strategic advertising ploy? It could be either, but search advertisers often bid on their competitor’s names in hopes that someone will click on their ad instead. They also look at this as a way drive brand recognition since people may start to associate their search with the competitor’s name.
Great idea, right? Well, actually no.
For starters, most people who search for something want to get results for that exact brand or product. They usually won’t click on a link for something different.
As a result, your search campaign will have a very low click through rate and Google (or other search engines) will flag your ad as being irrelevant to the terms you’re buying. Upon this realization, the search engine will require that you bid more and more on these terms.
In addition to lower click through rates and higher costs, keep a couple of other things in mind as well.
If you start bidding on a competitor’s keywords, who’s to say that they won’t start buying yours? At that point, both advertisers would essentially be wasting money to run ads that cancel each other out.
Finally, there are potential trademark issues. For example, you can currently legally bid on a competitor’s brand term, but in most cases you can’t include a competitor’s name in your ad text. To further complicate the matter, these rules vary from country to country. So, if you’re an advertiser in the U.S. and you’re conducting a search campaign targeting Europe, you need to study these rules very carefully.
Although it can seem like a savvy strategy at first, bidding on your competitor’s brand could be far more damaging than beneficial in the long run.