Determining whether to bid on branded and competitor keywords in PPC entails factors like enhancing your brand visibility and capturing traffic from competitors. In this digital marketing blog article we examines scenarios supporting and opposing the use of these strategies.
There are four types of brand and competitor keywords, which include:
- Your business brand.
- Your competitor’s business brand.
- Third-party brands that you sell.
- Third-party brands that you do not sell but directly compete with the brands that you do.
To illustrate this in a real-world context:
- Your business brand: Space NK
- Competitor business brand: Sephora
- Third-party brands that are stocked: Aveda, Cowshed, and Elemis
- Third-party brands that are not stocked but compete directly with the brands that you do: bareMinerals, Chanel, Bobbi Brown
This article will specifically explore the aspect of bidding on business brands.
What are the benefits and drawbacks of bidding on brand terms?
Participating in paid search advertising for brand terms presents both advantages and disadvantages:
Benefits:
- Safeguard your brand position and secure the top search result (Position 1).
- Prevent the loss of branded traffic to competitors.
- Enhance trust by maintaining a presence in both paid and organic search results, allowing you to dominate the search landscape.
- Branded ads often exhibit stronger conversion rates, contributing to improved account performance data and assisting in guiding potential customers towards making a purchase.
- Gain more control over the positioning of your brand ad, allowing customization of messaging—a contrast to the limited control offered by organic listings.
- Facilitate convenience for customers actively seeking your brand.
- Choose specific landing pages on your website, providing strategic control—e.g., directing cart abandoners straight to the cart within a designated time frame.
- Enjoy a potentially lower cost per click (CPC), enabling increased website traffic within your budget constraints.
Drawbacks:
- Paying for traffic that is already searching for your brand can be frustrating, as it might seem unnecessary when the audience is already aware of your brand.
- Limited support for new customer acquisition, as the targeted users are already familiar with your brand.
Exploring the advantages and disadvantages of bidding on competitor terms in paid search advertising reveals a dual set of considerations.
Benefits:
Enhance Brand Visibility and Awareness: Even if a user doesn’t click, bidding on competitor terms plants your brand in their minds, contributing to increased visibility and awareness.
Hijack Traffic and Sales: Gain the opportunity to divert traffic and sales from your competitors through strategic bidding.
Drawbacks:
- Increased CPC: Bidding on competitor terms can elevate the cost per click (CPC) due to heightened competition for those specific terms.
- Lower Quality Scores: Expect lower quality scores as ad relevance diminishes, leading to elevated CPCs and reduced ad delivery effectiveness.
- Decreased Click-Through Rates: Bidding on competitor terms may result in lower click-through rates, impacting the overall performance of your advertising efforts.
- Reduced Conversion Rates: Experience lower conversion rates, potentially affecting the efficiency of turning clicks into actual conversions.
- Retaliatory Bidding: Bidding on competitor terms may prompt retaliatory actions, leading competitors to bid on your brand terms in response.
Determining the appropriate timing for bidding on brand and competitor terms within your paid search strategy is contingent upon your specific business objectives, competitive landscape, and overarching marketing approach. Here are some considerations:
Competitor Bidding on Your Brand:
If competitors start bidding on your brand terms and relying solely on your organic listing becomes insufficient, launching your brand ads becomes crucial. This safeguards your brand position and prevents potential loss of brand traffic to competitors.
Branding Activity in Other Channels:
When a significant budget has been allocated to brand awareness activities in other channels, it’s essential to capitalize on the resultant increase in brand searches. Launching brand ads ensures that you leverage the momentum generated by these efforts.
Targeting Specific Audience Sets:
Utilizing branded and competitor terms alongside remarketing audiences enables you to tailor your ad message and landing pages. This customization enhances the probability of generating clicks and conversions by reaching specific audience segments effectively.
Generic Brand Name:
If your brand name carries multiple meanings or is shared with other brands in different industries, ranking organically may pose challenges. Bidding on your brand terms becomes a strategic move to counter this and secure a more prominent and frequent presence. While it may not completely resolve shared brand name issues in a competitive bidding scenario, it provides a better opportunity for visibility.
Instances may arise where bidding on brand and competitor terms may not be warranted or advisable. Here are situations in which you might opt against bidding on these terms:
No Competition for Your Brand:
If there’s no competing bid for your brand, and you already maintain the top organic position, allocating your budget elsewhere might be a more strategic move. Tools like Auction Insights and Ad Preview and Diagnosis can help assess competitor bidding activity by using our Enterprise SEO Experts services
Mutual Agreements with Competitors:
Friendly relations with competitors may lead to agreements not to bid on each other’s brand names, making bidding unnecessary.
Lack of Unique, Competitive, or Compelling Offer:
If your offer lacks uniqueness, competitiveness, or compelling features, attempting to draw clicks away from the competition when users are actively searching for them may prove challenging.
Poor Conversion Rate:
If your brand, organic, or direct traffic has a poor conversion rate, focusing on improving this metric before venturing into bidding on competitor terms may be a more prudent strategy.
When deciding to bid, it’s crucial to consider the following:
- Avoid Overpaying for Traffic: Test various bidding strategies, with Maximize Clicks often proving effective, though results may vary depending on the brand.
- Integrate Negative Keywords: Prevent paying for irrelevant traffic by adding negative keywords, such as terms related to complaints or job searches.
- Strategic Targeting of Competitor Keywords: Selectively target competitor keywords, focusing on areas like reviews or alternatives that potential customers may be searching for.
- Use Audience Observations: Monitor site traffic and customer behaviour, particularly when bidding on competitors, to refine your approach.
- Adjust Regular Settings, Including Ad Schedules: Consider and adjust standard settings, such as ad schedules, to optimize the performance of your bidding strategy.
Reviewing competitors’ activity, aligning with business objectives, and assessing your brand’s position are essential steps in determining whether bidding on brand and competitor keywords aligns with your paid search strategy. Additionally, beyond the search network, explore how your ads appear in shopping ads and leverage competitors to build custom segments.
Would you like to read more about “When Should I Use Branded and Competitor Keywords in PPC” related articles? If so, we invite you to take a look at our other tech topics before you leave!
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