We often get asked if it is possible and/or recommended to bid on competitor company and brand names in an SEM campaign. Here are some pros and cons to consider:
- Google does not permit the use of registered trademarks in ad copy unless you are the trademark owner or an authorized reseller. This does not stop you from bidding on competitors’ company and brand names as keywords, but it does mean you can’t use those terms in the ad copy itself.
- Just because you can bid on terms that are the intellectual property of others doesn’t mean it’s a good idea to do so. Even though your keyword bids will be approved in the AdWords system (as long as the protected terms are not in the ad copy), this does not stop your competitors from suing you directly for using their protected terminology as a component in your marketing campaign. Lawsuits of this type have had varying degrees of success, but even the most baseless of lawsuits can be costly to defend yourself in, so this is a strong point to consider.
- Even if your competitors don’t sue you for bidding on their company and brand names, doing so may start a bidding war. THEY may start bidding on YOUR name and brand terms when they might not have thought to do so before.
- And even if you can manage to avoid lawsuits and bidding wars, bidding on competitor terms that cannot be used in ad copy nearly guarantees a low quality score, which means you will pay more on a per-click basis than other bidders for that keyword that have permission to use the terms in their ad copy. And users searching for competitor terms are usually pretty set on using those competitors and not your brand, so you could also suffer from a high bounce rate on these pricey clicks. There are probably way more cost-effective keywords that your money could be put towards instead.
- Therefore, we typically don’t recommend this approach to SEM. We have seen some unique cases where it works well, but for most advertisers, this is not a cost-effective or highly converting approach, and it is certainly a risky one.