What To Do When A Competitor Targets Your Branded Keyword

Imagine this scenario: you pull up your favorite search engine and type in your company name, but instead of your company being the first hit you see the name of a competitor.

How did this happen? What do you do? Is this even legal?

All these questions and more will race through your head, which is why it’s important for you to understand what to do when a competitor targets your branded keyword. 

Search engine results page (SERP) ranking matters, as over 25% of people click the first Google search result. Results especially matter when it comes to searches involving your branded keyword, because your company name is one of your most prized assets. 

To ensure that you know what to do when a competitor mentions your company in its marketing, you’ll need to comprehend:

• What bidding on branded keywords is
• What to do if a competitor bids on your branded keyword
• Whether bidding on a competitor’s keyword is a good idea

Let the bidding commence.

What You Need To Know About Bidding On Competitor Keywords

It’s scary to think that other companies can profit off of your company’s name. In reality, the practice is more common and less nefarious than it sounds, but that doesn’t mean you should just sit back and let it happen. 

The more you understand the practice, the better positioned you’ll be to respond if you detect someone is targeting your branded keywords.

What is Bidding on Branded Keywords?

A bid represents how much money your company is willing to spend on one click for a given ad. 

PPC (pay per click) ad campaigns will feature many ads that use different combinations of keywords, all of which combine to make up your total campaign budget. Bids can be made manually or set up using automated marketing strategies.

Common automated bidding strategies include:

• Target return on ad spend (ROAS)
• Target cost-per-acquisition (CPA)
• Target search page location
• Target outranking share

Different strategies focus on different outcomes, but when it comes to bidding on your branded keywords or a competitor’s keywords, the goal is usually to influence target page location or outranking share. 

A branded keyword is a keyword used in a search that contains a company’s name. 

“Nike shoes,” “McDonald’s in New York,” and “Ford truck” are all examples of branded keywords, because they contain the name of the company in the keyword chain. Meanwhile, “running shoes,” “fast food in New York,” and “pickup truck,” are non-branded keywords, because they don’t mention a specific company.

Therefore, bidding on a competitor’s branded keywords involves placing bids and creating ads that will allow your company to appear when a customer searches for a competitor. 

There are many reasons why a company might bid on a competitor’s branded keywords, including:

• To steal traffic from a competitor
• To target a specific audience
• As retaliation for a company bidding on a competitor’s keyword

It’s a simple enough practice, but is it legal? 

Is Bidding On Competitor Keywords Legal?

Contrary to what most people may think, bidding on a competitor’s branded keywords is completely legal, but there are restrictions on its practice.

Google’s policies on trademarks and advertising clearly lay out that bidding on competitor’s keywords is acceptable, so long as:

1. Ad text does not include a competitor’s trademarked terms
2. Display URLS do not contain trademarked terms
3. Ads do not try to mislead users about a product’s origin

If your brand or company name is not protected by a trademark, then you leave yourself open to a competitor mentioning your company in their advertising as they see fit.

Additionally, there are exceptions to trademark rules and loopholes governing branded terms. Resellers, authorized advertisers, and information-based sites are allowed to use trademarked terms as long as they only use approved keywords or do not try to compete directly with the competitor who owns the keyword. 

While bidding on a competitor’s keywords is legal, that doesn’t necessarily mean it’s a good idea. To answer that question, you’ll first have to run through the available scenarios.

What To Do When A Competitor Is Using Your Company’s Name As A Keyword

Now that you know what bidding on a competitor’s keyword is, the pros and cons, and how to determine if it’s a good idea, it’s time to talk strategy.

Overall, there are three options available to you if you find out a competitor is using your company’s name as a keyword:

1. Bid on your own brand
2. Bid on a competitor’s brand
3. Seek protections for your brand

Deciding which option is best for your company is critical for determining how you will navigate this tricky situation.

1. Bid on Your Own Brand

When many companies find out that a competitor is bidding on their keyword their first thought is likely going to be to bid on their own brand. This is a natural response and there is also a good justification for this course of action.

The pros of bidding on your own brand include:

• Lower CPC compared to ads with non-branded keywords
• Higher CTR 
• Greater control over messaging
• Prevent competitors from capitalizing on your brand

Companies that do not leverage branded ads received around 60% of clicks on top organic listings. Meanwhile, companies that position branded ads at the top of listings received 91% of clicks on ads with branded keywords. This incremental increase in overall click activity can lead to higher traffic and increased conversions. 

The same is true in reverse. By not bidding on your own keywords, companies risk losing incremental clicks to competitors who position ads targeting branded keywords alongside organic listings. 

In a sense, bidding on your own brand is a classic case of the best defense is a good offense. 

2. Bid on a Competitor’s Brand

Bidding on a competitor’s brand carries many of the same benefits as bidding on your own brand. The differences lie in the execution and the risks involved. 

When bidding on your own branded keywords, the only risk your company incurs is to your bottom line. You may end up wasting money on ads that don’t generate increased visibility or traffic and would have been better served by spending your campaign budget on non-branded ads to increase visibility for your organic listings. 

If you are going to target a competitor’s keywords, pick your opponents wisely. Direct your bids towards companies that offer similar services to you and that are a similar size or in the same market. 

In the above example, Samsung places a bid on iPhone’s branded keywords to snag the top listing with a branded ad on Google. This strategy is risky, as Samsung opens itself up to retaliation from Apple, but the risk may be worth the payout. Especially when you stop and consider that the first listed average CTR for branded keywords is 43.26%.

When it comes to bidding on competitor keywords, it pays to be first. Just make sure you don’t start a fight you have no chance of winning by picking on a company with deeper pockets - and better lawyers - than you. 

3. Seek Protections for Your Brand

If your brand isn’t protected by a trademark, you leave yourself open to competitors mentioning your company name in their ads. 

Protecting your company by trademarking your brands is one of the simplest steps you can take to stop your competitors from stealing customers out from underneath you. You can start the process by visiting the United States Patent and Trademark Office and applying for a trademark. 

However, just because your brand is trademarked doesn’t mean that your job is over. Make a point to regularly check search results to see if competitors are targeting your keywords. If they are, review their ad copy to see if they’re breaking the search engine’s code of conduct. That way you can report the ad and have it removed. 

Also, if you are on good terms with a competitor that is targeting your keywords, don’t hesitate to reach out and ask them to stop. Make it clear that you are willing to counter bid on their keywords as well as your own. This may dissuade them from targeting your brand while also guaranteeing you don’t get involved in a reckless bidding war. 

After all, why invite a war when diplomacy will work just as well?

Is Bidding On Competitor Keywords A Good Idea?

There are several benefits to bidding on a competitor’s branded keywords, but there are also a number of cons to consider. 

Before you decide whether or not to bid on a competitor’s keyword or your own, stop to consider:

• The cost of branded vs. non-branded bids
• Whether bids will improve your brand’s visibility
• If using branded keywords will increase conversions
• The competitive landscape

Generally speaking, branded keywords cost less than non-branded keywords. Branded keywords are not used less often than non-branded keywords, so they frequently require lower bids. The lack of competition in the bidding of branded keywords means that your ad dollars go further, which means you can place more PPC ads for less money.

Additionally, organic SERP clickthrough rates are higher for branded keywords than non-branded keywords. The combination of low cost, high conversion potential makes branded keywords extremely appealing.

However, there are downsides to bidding on branded keywords. Most noticeably, non-branded keywords generate more visibility, as they contain more frequently searched phrases. Branded keywords generate narrower search results, which means your ads that contain these keywords will be viewed less often.

The other downside to targeting a competitor’s keyword is that the competitor may retaliate and target your branded keywords. Over time, this tit-for-tat mentality can escalate into a bidding war that costs far more than originally anticipated and could even get you into a legal dispute.

Avoiding a bidding war or retaliatory action should be at the forefront of your mind when placing a bid on a competitor’s keyword. Such consequences are almost always not worth the hassle or the cost to improve your search results by a few ranks. 

Should You Be Concerned When A Competitor Targets Your Keyword?

Today, you’ve learned:

• What bidding on branded keywords is
• What to do if a competitor bids on your branded keyword
• Whether bidding on a competitor’s keyword is a good idea

Digital marketing presents multiple opportunities for growth if you know where to look. It’s not the end of the world if a competitor targets your keyword, but you do need to know how to respond to the situation. 

Whether you bid on your own brand, target your competitor’s keywords, or protect your brand through other routes will depend on the analysis you do that weighs the costs and benefits of each action. 

Ultimately, the choice of how you wish to proceed is up to you. The price of doing nothing is often the most costly solution, so make sure to leverage marketing resources wherever possible to ensure you have the information you need to make an informed decision.