There are as many methods of struggling to be the first amongst competitors as there are marketers themselves. When taking Google Adwords to the fight, there are two main approaches for utilising this functionality – target outranking share bidding and the strategic use of showing advertisements on your competition’s phrases. Find out exactly what is meant by each of these tactics and choose the one that suits you best.


Automated bid competition

Target outranking share bidding is a relatively new type of Adwords bid strategy that has been designed to help bidders achieve a specific business goal – to outbid competitive advertising. Utilising this option can be achieved by locating Bid Strategy in the campaign settings of Adwords.



How does the outbidding process work?

Target outranking share bidding is currently only available in campaigns targeting the search network. The system is designed to automatically increase or decrease bid rates so that your ads can outrank your competition’s advertising (from another domain) and subsequently display your ads on their search results pages. Of course, these ads will also be displayed when the competitor’s ad is not showing up. Interestingly and quite usefully, the field where domain names are entered in for the bidding process also contains those domains that have recently participated in the same auctions as your ads. As part of the strategy, you can set the overall goal, i.e. the percentage of auctions that you want to outrank the advertisements from a competitive domain. However, remember that if you want to win all of the auctions, you will need of larger budget. To have constant control over the final rate it is possible to determine a maximum limit, i.e. the highest cost-per-click that the system should set for your keywords using this strategy. Remember to pay attention to the fact that setting the maximum bid limit too low may prevent you from reaching your goal.

This strategy ultimately aims at achieving an appropriate share of auction winnings, however, the final position of your ad depends on the result of the ad auction. The position of your ad is determined by two main factors: competition among advertisers and, more importantly, the quality of the ad itself.result. It should be remembered that target outranking share bidding changes only the rates. It does not allow participation in auctions in which your advertising would not take part.

If you’re using this strategy for the first time, remember that it may take up to a day to update your bids. The data concerning the participation in auction winnings is updated only once a day, just like your bid rates. This helps the auction to achieve adequate bidding participation levels. A main benefit of this strategy is that it can start to take effect even after just one week. This, however, also means that making changes to your bid settings is not recommended.


Using the phrases of the competition

Google adheres to local trademark laws and requires that AdWords ads do not infringe any third-party trademark – more information on their trademark policy can be found on Googles Support pages. However, it should be noted that this advertising policy concerns only the content of advertisements, not the possibility of targeting trademarks themselves. The position of the giant from Mountain View, in this way, remains clear-cut:

Google does not investigate or restrict the use of trademarks as keywords. 

But what does this mean for advertisers? It means that we can use any keyword to display our ads, even those identified as trademarks. You will learn more about this later in this article.

Knowing what this opportunity potentially brings leads to the question – how can we use this trademark keyword advantage in an AdWords campaign? If you properly construct your advertisement and do not mislead anyone, it is entirely possible to ‘pick up’ some of our competition’s movement.

Let’s take an example to illustrate: The owner of the newly opened company Example Ltd, which manufactures shoelaces wants to present themselves to new potential customers. To increase the scope of the ad’s visibility, the company can display its AdWords ad in search results for another company’s name, e.g. Big Laces Ltd. By optimising their ad to appear in search results for a brand with an established market position and consumer awareness, Example Ltd are able to gain recognition for their own brand and become more noticed. Of course, the owner should mislead users by saying that Example Ltd offers the competitor’s goods. What the owner can do, however, is to use this as an opportunity to communicate that Example Ltd also has laces on offer. If this is combined with an additional benefit, such as a discount for new users, the owner will increase the chances of successfully attracting valuable customers to the company website.

The most important thing to bear in mind is to not impersonate a competitor but to instead inform readers that you are a different company the offers similar products. Whilst misleading users in advertising text may increase overall traffic to your site, you will also likely amass a bad association with your a brand, which could even lead to bad press.

So when does an AdWords ad that uses the phrases of your competition become incompatible with Google’s policies and the law? It becomes incompatible when there is a real danger of misleading the user by distorting the distinctive features of yours and your competitor’s branding.
The EU Court of Justice clarifies this issue as follows:

Advertising makes it difficult or impossible for a properly informed and reasonably attentive internet user to know if the goods or services to which the advertisement relates are from the owner of the trademark or company associated with it economically, or, conversely, from a third party.

We must also remember that an ad using the phrase of a competitor will probably have a weaker CTR (click through rate) than the ad itself. Moreover, because the keyword will not appear in either the advertisement or the landing page, you will have a lower quality ad score and probably a much higher cost-per-click than the competitor for the brand’s own keywords. The question then remains: Does it all pay off? Like most business goals, it all depends on the strategy.

It is also worth protecting yourself and running the ad using your own brand phrases because at any moment a competitor could bid for them as well and if they bid before you, they may even gain first place in organic search results. The competitor will effectively display their ad above yours, using your phrases and steal your traffic. Often, entities harmed by the use of their phrases by competing companies use requests to stop such activities, but whether (and when) this gets enforced ultimately depends on the rival. Google itself acknowledges that they receive many such complaints and it may take a long time to limit the display of unwanted ads.

The emphasis in this article cautioning the proper use of competitor Ad campaigns is not unfounded. The groundbreaking trademark dispute between M&S and Interflora from an AdWords campaign ended with a judgment by the EU Court of Justice that explicitly identified the legal use of trademarks in AdWords.

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