Competitor Bidding: The High-Risk Strategy That's Draining Your Budget

In this eye-opening episode of "Clicks & Clarity with Claire," host Claire Jarrett tackles the controversial topic of competitor bidding in Google Ads. Drawing from her extensive experience in auditing and optimizing campaigns, Claire reveals why this seemingly clever strategy often backfires, draining budgets and yielding poor results .

Claire breaks down the risks associated with aggressive competitor bidding, including inflated costs per click, low Quality Scores, potential legal issues, and wasted ad spend . She shares real-world examples of campaigns gone wrong and provides actionable alternatives to improve ad performance without resorting to risky bidding tactics .

Listeners will learn smarter approaches to Google Ads, focusing on refining keyword strategies, improving Quality Scores, and analyzing competitor tactics effectively . Claire emphasizes the importance of highlighting unique selling propositions and optimizing campaign structures for better results .

This episode is a must-listen for businesses struggling to compete in Google Ads or those considering competitor bidding as a strategy. Claire's insights will help advertisers make informed decisions, avoid costly mistakes, and develop more effective, budget-friendly Google Ads campaigns

https://www.clairejarrett.com/

Connect with me on LinkedIn

Transcript

Welcome to "Clicks & Clarity with Claire." I'm Claire Jarrett, and today we're diving into a controversial topic: "Competitor Bidding: The High-Risk Strategy That's Draining Your Budget."

Let's start with a scenario I've seen far too often. A client comes to me, frustrated that their Google Ads budget is disappearing with little to show for it. Upon investigation, I discover they've been aggressively bidding on competitor names, thinking it's a clever way to steal traffic. But here's the truth: while competitor bidding can work in specific situations, it's often a budget-draining mistake .

First, let's address why competitor bidding is tempting. It seems logical - if someone's searching for your competitor, why not try to intercept that traffic? In some cases, this strategy can be effective. I've had clients successfully use it to divert potential customers and gain new business . However, and this is a big "however," it's a high-risk strategy that often backfires.

Here's why:

High Cost Per Click: When you bid on a competitor's name, you're entering a bidding war. Your competitor will likely bid aggressively on their own name, driving up the cost per click. This means you're often paying premium prices for clicks that may not convert .

Low Quality Score: Google's Quality Score system looks at the relevance of your ad to the search query. When you're bidding on a competitor's name, your ad and landing page are inherently less relevant, leading to a lower Quality Score. This means higher costs and lower ad positions .

Legal Risks: Depending on your industry and location, bidding on trademarked terms can lead to legal issues. I've seen cases where businesses faced cease and desist letters or even lawsuits for aggressive competitor bidding .

Wasted Budget: Often, people searching for a specific competitor are already far down the decision-making funnel. They're less likely to be swayed by your ad, leading to high bounce rates and wasted clicks .

Retaliation: Remember, if you're bidding on your competitors' names, they might start bidding on yours. This can lead to a costly bidding war that benefits no one except Google .

So, what should you do instead? Focus on your strengths and your ideal customer. Here's a smarter approach:

Refine Your Keyword Strategy: Instead of targeting competitor names, focus on high-intent keywords related to your products or services. These are more likely to attract customers who are ready to buy .

Improve Your Quality Score: Work on creating highly relevant ads and landing pages. A higher Quality Score means lower costs and better ad positions .

Analyze Competitor Strategies: Use tools to research what keywords and ad copy are working for your competitors. Then, adapt and improve upon these strategies for your own campaigns .

Focus on Your Unique Selling Proposition: Instead of trying to intercept competitor traffic, focus on what makes your business unique. Highlight this in your ads and landing pages .

Use Remarketing: This allows you to target people who have already shown interest in your products or services, often resulting in higher conversion rates at a lower cost .

Optimize Your Campaign Structure: Ensure you have well-organized campaigns with tightly themed ad groups. This improves relevance and can lower your costs while improving performance .

Remember, successful Google Ads campaigns are about attracting the right audience, not just any audience. Competitor bidding might seem like a shortcut, but it's often a costly detour.

Here's a real-world example: I once audited an account where the previous agency was running ads for competitors, effectively sending traffic to them and draining the budget . By refocusing the strategy on high-intent keywords, adding negative keywords, and improving the campaign structure, we were able to dramatically improve results without increasing the budget.

In conclusion, while competitor bidding can work in specific, well-thought-out scenarios, it's generally a high-risk strategy that can drain your budget quickly. Instead, focus on building a strong, relevant campaign that speaks directly to your ideal customer. It's about working smarter, not just bidding harder.

That's all for today's episode of "Clicks & Clarity with Claire." Remember, in the world of Google Ads, strategy trumps aggression every time. Until next time, this is Claire Jarrett reminding you to bid wisely and prosper!