Flight log / Transmission 052

Bidding on competitor keywords: when it pays and when it burns cash

Bidding on a rival's name is the Street Fighter II versus screen of paid search: you pick the fight, they see it coming. Google's trademark policy says it will not restrict trademarks used as keywords, so the real question is whether you can afford the match.

Somebody types a competitor's name into Google. They're shopping, they know the category, and they're one click from a sales conversation. It's easy to see why bidding on that search is tempting. It's also easy to spend a quarter's budget proving that most of those people wanted the company they typed.

This post is about bidding on your competitors' names. If you're deciding whether to defend your own, that's brand bidding, and it's a different decision with different math.

Is it legal to bid on competitor keywords in Google Ads?

Google allows it. Its Trademarks policy lists trademarks used as keywords among the uses that Google Ads and Display & Video 360 "will not restrict." What Google does restrict, after a complaint from the trademark owner, is using the trademark in ad text in certain ways, such as an ad from a direct competitor or one that uses the mark in a confusing, deceptive or misleading way.

Google's policy is not the same thing as trademark law, which varies by country and by how you use the name. Google says it abides by local trademark laws, and complaints are limited to the countries and industries where the owner has shown trademark rights. If you're unsure about a specific use, that's a question for your counsel, not your ad platform.

Two details from the policy matter in practice. Complaint-based restrictions generally apply on an ongoing basis to any ads using the same second-level domain in the final URL, so one complaint can follow your whole site. And since July 24, 2023, Search Engine Roundtable reports, Google processes trademark complaints only against specific advertisers or ads, not as industry-wide blocks.

Why do competitor keywords cost so much?

Because the auction can tell you're not who the searcher asked for. Google's Quality Score is built from expected click-through rate, ad relevance and landing page experience. On a competitor's name, your ad can't use their trademark in the text if they complain, your page isn't about them, and most searchers click the brand they typed. All three components tend to come in below average.

Google charges you what's needed to beat the Ad Rank of the advertiser below you, and higher quality ads can lead to lower prices. The reverse holds too. Lower relevance means paying more for the same position. Meanwhile the competitor often bids on its own name with near-perfect relevance. Here's how that plays out in an illustrative account.

In this hypothetical B2B software account, brand terms produce leads at $18, category terms at $240, and competitor terms at $700 when the clicks land on the homepage. Sending the same competitor clicks to a dedicated comparison page drops that to $415. Still the most expensive line in the account, but now within reach of a target a sales team might accept for a buyer who's already shopping.

When does bidding on competitor keywords pay off?

When the searcher has a reason to look at you, and you can say it in 30 characters. The pattern that shows up in most B2B accounts is that competitor campaigns work in a few specific situations:

• You win on something concrete. Price, a missing feature, contract terms, a migration path. "Also worth a look" isn't a reason.
• The competitor has a known pain. A price increase, an end-of-life product, a sunset plan tier. Searchers in that moment are open to alternatives.
• The competitor is bigger than you. Their brand searches have volume, and even a small share of switchers can matter to a small company.
• You have a page built for them. A comparison or switching page that answers "why change?" honestly.
• You set a CPL ceiling up front. Decide what a lead from this campaign is worth before it spends, and cap the campaign budget so it can't crowd out category terms.

And it burns cash when you bid on every competitor in the category with one generic ad, send clicks to the homepage, or run it in a market where buyers are loyal and contracts are long.

How do you write competitor ads without breaking Google's trademark policy?

Write about the searcher's problem, not the competitor's name. Ads that lead with your differentiator ("Flat pricing, no per-seat fees") work without a trademark and say why to click. A few practical rules:

• Watch keyword insertion. Google's keyword insertion shows the keyword in your ad, not the search term. In a competitor ad group, that means it can paste the competitor's name into your headline. Turn it off in those ad groups.
• Keep competitor terms in their own campaign. Separate budgets, separate ads, separate reporting. Mixing them into category ad groups hides the cost.
• Be specific and fair. Claims you can't support on the landing page are a problem for the ad, the page and your reputation.
• Check your ad's final URL. Because complaint restrictions follow the domain, a mistake in one ad can affect others on the same site.

What landing page should competitor clicks go to?

A page that acknowledges what they searched for. Someone who typed a competitor's name and landed on your generic homepage has to do all the work of figuring out why you're there. In a hypothetical competitor campaign, here's how conversion rate might change by landing page.

In this illustrative case, the homepage converts competitor clicks at 1.6%, a generic demo page at 2.1%, a comparison page at 2.7%, and a switching guide with a migration offer at 3.0%. The difference is message match: the page picks up the conversation the search started. The message match guide covers how to keep that chain intact from query to form.

What a good comparison page usually includes: a plain statement of who each product is best for, a side-by-side on the 4 or 5 things buyers actually compare, proof from customers who switched, and a low-friction next step. Be careful with the competitor's name on the page itself; how you describe them is a legal question as much as a copy one.

The time series tells the same story more clearly. Here's the hypothetical campaign's weekly cost per lead, before and after the comparison page went live.

In this illustrative 12 weeks, competitor-term CPL hovers around $700 for 6 weeks, drops to $560 the week the comparison page launches, and settles near $415. Category terms stay flat around $240 the whole time, which is what tells you the change came from the page and not the account.

What happens when competitors bid on your name back?

Often, they will. Starting a competitor campaign is visible: your rival can see you in their auction insights report the same way you can see them. Expect a response on your brand terms, and decide in advance whether you'll defend. Brand clicks are usually cheap, so a modest brand campaign is the normal answer.

Some categories settle into an unspoken truce where nobody bids on anyone's name. Others run hot for years. Neither is a policy question; it's a cost question, and it's worth checking every quarter whether the competitor campaign still clears its CPL ceiling after the counterattack raised your brand CPCs.

Where competitor keyword advice breaks down

• Low search volume. If a competitor's name gets a few dozen searches a month, the campaign won't produce enough data to judge in a quarter.
• Match types leak. Broad match on a competitor's name can drift into their support, login and careers searches. Read the search term report weekly and add negatives such as login and support.
• Lead quality differs. Competitor-term leads are sometimes researchers building a vendor shortlist or existing customers of the competitor fishing for a discount. Judge on qualified pipeline, not form fills.
• Policy isn't law. Google not restricting a keyword doesn't decide whether a specific use is lawful where you operate.

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