Bidding on competitor terms in paid search is a controversial topic. With the right strategy, you can benefit from showing up with your biggest competition. With the wrong strategy, you will simply (and quickly) throw money away.
The following tips can help you win with competitor keyword bidding:
Pick and choose your competition. When it comes to PPC, don’t pick companies you have no advantages over, pick competitors that you have at least one thing that you do better than them. If it’s better prices or services, do not pick something that completely towers over you. That’s just throwing your money away. Also don’t pick all of your competitors to bid against. Start off with only a few companies to bid on so you do not destroy your budget and waste your time.
Make sure you differentiate. If your competitor is the cheapest, perhaps you are the fastest. If they are the most experienced, maybe you are award winning. Stand out from your competitor or don’t compete against them.
Sometimes your competitor will be selling the same thing you are trying to sell with a slight difference. In a case like this it would be OK to bid on their brand terms as long as you’re within the trademark guidelines. In other cases, the company may only be competing with you in one area. For example, if you are competing with Target, don’t bid on the word “Target.” That’s just wasting money but instead narrow the search to “Target lamp fixtures.” Make sure you only bid in areas where you directly compete.
Even though you are bidding against them, do not try and take them over. Trying to destroy them will probably aggravate them more than if you’re just trying to stay below them. Competitor bidding strategy is about being a differentiated alternative, not the default option. Don’t go too far that they will retaliate and go to the engines about it. Being at the top of the page will also put you at a disadvantage when people are searching specifically for your competition. Use good differentiated ad copy to gain more attention when at a lower place on the page.
Be ready to defend your own brand. Make sure to reinforce your brand efforts and keep an eye on your stats and Auction Insights reports to make sure you’re not being beaten by your competitors.
Following these tips could be a big step bidding against your competitors, but don’t go in blind. Make sure you are in the trademark regulations. It’s not worth getting a little extra traffic, just to have your account shut down because you can’t follow the rules.