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Stealing other people’s treasure: competitor bidding strategies for PPC

by Alise Arente
20th Jan 2017 - 8 min read

All companies dream of winning their competitors’ business. In Paid Search, there are many ways to make sure you appear alongside your biggest rivals on search engine results pages (SERP). Besides, unlike with Organic search where it takes months to make you rank in top positions against market giants and very generic keywords, Paid Search can make this happen instantly. So, here are some methods and strategies to highlight potential opportunities.

Keyword bidding

The most basic and straight-forward method of competitor bidding strategy would be bidding on competitor terms via search campaigns. This involves creating a keyword list, preferably in a separate campaign, containing potential search queries used to look up competitor’s products and services.

Choosing your opponents

Unless you have a big budget, assessing which companies to bid on is very important as you clearly won’t be able to take on everyone (and really, there is no need).  For example, a neighbourhood bakery might not justify bidding on ‘Greggs’ brand terms, even if the pricing and quality was better. Instead, the competition for this company is more likely to be other local bakeries, cafés and outlets offering similar products. Therefore, choosing a competitor who you feel you have a competitive advantage over, is a good start to your strategy.

Pros

Brand awareness

One advantage of this tactic is brand awareness. In time, your company should start to take competitors’ market share, growing your own. Having your company’s name appear next to your rivals’ is a great way of making other’s aware that, a) you exist and b) that you have a similar offering (possibly even better) to their original search.

Creating compelling ad copy is key in order to convince the searcher to click on your ad. Create generic ad copy – don’t mention your own brand. This is so you’re not misleading the searcher about who you are. If your website is good enough, after clicking on the ‘wrong’ ad, they may be tempted to continue with you rather than going back to your competitor. You could create a clever message and ‘play’ with user’s search query. The best real-life example for this is the Samsung’s S6 campaign which was launched around the time of Apple’s brand new iPhone 6S. Samsung made sure their ads appeared for ‘iphone 6s’ searches. Samsung’s ad read “Awkward You Obviously Mean S6 – Samsung.com”. As well as traffic, the campaign created a lot of buzz and won countless awards.

Cheaper CPCs

In most cases, bidding on branded keywords is usually cheaper than on generic terms as there is less competition in bid auctions. So in theory, bidding on a competitor’s brand terms should not result in spending loads per click. Nevertheless, there is something called ‘Quality Score’ which, unfortunately, would be low for competitor terms, thus pushing CPCs higher up (read more on this in the ‘Cons’ section of this article).

Tip: Carefully choose competitor terms you put in the keyword list. Bid on the services/products that you have in common with your competition as well as their brand terms. This will result in longer-tail keywords and, consequently, a higher Quality Score. For example, if you’re a national health insurance provider, it would be a waste of money to bid on something like [health insurance competitorbrand] simply because they might have been looking for an ‘international’ rather than ‘national’ health insurance. So if volume is needed, it can could work well but to trigger more relevant searches and to feed the Quality score, you would be better with adding [international health insurance competitorbrand] as a keyword. Therefore, remember to focus only on the services/products you do offer or think carefully about the negative keywords.

Cons

Lower Quality Score and Higher Bounce Rate

Having other company brand keywords in your account is not going to help the Quality Score. In fact, the poor QS from your competitor’s campaign could also affect your account’s QS. Moreover, the bounce rate is very likely to be higher than normal. Many searchers will immediately exit if they see they’re not on the primary search brand’s site.

While this might raise concerns, don’t worry too much. Test different keyword combinations and messaging in the ads as they might prove the above wrong. For instance, inserting the keyword ‘cancel’ and the competitor’s brand term can apparently work very well as you’d be triggering the searches of people willing to move away from your competitor.

Starting a bid war

Another important drawback to competitor bidding is that it might result in a bidding war between companies. You probably won’t want to get into a war with the giants in your industry, so choose carefully who to challenge. If others start bidding on your brand name then the CPCs for your own brand campaign (which always tended to be so low and efficient) would suddenly start rising and increase your cost-per-acquisition (CPA).

Customer Match

What is a customer match?

Another way of approaching competitor bidding is through Customer Match which is another Adword’s advertising tool using email database. This doesn’t suit everyone as you need an existing customer database with at least 1,000 emails collected by your company. This is a completely different strategy to the traditional keywords bidding explained above:while the keyword bidding is more about increasing brand awareness and acquiring new customers, the Customer Match approach is more about focusing on the existing customer base and customer retention.

How it works

Capture your current and previous customers at the very moment they are searching for your competitors’ brand and convince them to stay with you by using ‘clever’ messaging and (possibly) incentives. For example, let’s say you’re a Health & Safety course provider. Your customer has registered and done a course with you, but after a year he/she decides to renew it or do another course, however, he/she has heard good things about another, similar company so they decide to search for it. Alongside the competitor’s ad, the person would also see your ad saying something like “Why Switch? Stay With Us and Get 10% Off!”. Personally, this would make me stay, if I was happy about their services.

The set up

The way this would work is if you have created a search campaign with your competitor keywords, you’d make a copy of this and then apply the email lists to this campaign(s) via Audiences. The reason why it is important to duplicate the existing competitor campaign is so that you can create a tailored messaging for these people and manage budgets more effectively. So quite an easy set-up, while the impact can be significant!

Gmail Ads

There’s a feel about Gmail ads that they are a little underestimated. However, if the right approach is taken, they can prove to be worth the money. When thinking about taking on a competition using Gmail ads, there is one particular method which could do just that.

As you might know, you can bid on keywords when doing Gmail ads. This again includes other company brand names and URLs, which poses a great opportunity for a competitor bidding. As such, combining your competitor’s brand name with a keyword like ‘quote’, ‘cancellation’ or similar, you can target people at the moment of their decision making. Clearly, the email subject line is very, very important as we’re all aware of the amount of junk emails we receive daily, so make it relevant, clever and intriguing!

Generally speaking, this approach of competitor bidding is much sneakier as ads are sent to an individual’s inbox directly, thus not visible to your competition. However, this also puts yourself in a blind position as it is possible someone’s doing this already to your brand. But as said earlier, test this out as remember that you’ll only pay for the ad when the person opens the email (the magic of PPC..).

Conclusion

Hopefully, this article has given you some ideas on how to expand reach and how to tackle competition in Paid Search. It might not work for everyone and you need to be strategic when ‘taking on’ other companies because it’s easy to end up wasting marketing budget. And don’t forget that competitor bidding strategies are usually more for mature campaigns, so make sure your own house is in order before you start raiding others’.

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