Despite having two parents who passed the BAR, I am and have remained thankfully ignorant of almost every legal issue imaginable – up to and including the recent lawsuit against an online realtor for trademark infringement on Google. So I’m not going to comment on the legal merits of the case or speculate on it’s probably outcome.
What is of interest to me, however, is the whole issue of Search Engine Marketers and their use of competitor names and brands to reach customers. From a purely practical perspective, there are a number of ways to think about targeting competitors – most of which we’ve seen tried by one company or another.
The genesis of the whole concept is simple enough. The key to good Pay Per Click (PPC) campaigns is finding search terms that, when entered by a searcher, indicate a high-level of interest in buying some company’s product. The higher the level of interest by searchers and the cheaper the search term, the more effective a PPC campaign will be.
Now it is a matter of common sense (and it seems to be borne out in our research) that a searcher who is looking at your closest competitors is likely to be a fairly highly-qualified prospect for you as well.
As a bonus, since competitor company names and brands are often lightly trafficked in Google auctions, these search terms are often much less bid-up than the common non-branded terms in an industry.
So there you have it – high-qualification and inexpensive bid prices – a great combination for a PPC buyer. But before you run out and start buying a bunch of competitor brand-names, there is more to the story you need to know (and not just the legal risks).
Probably the biggest change to buyers who were building campaigns around this concept came when Google introduced Minimum Bid Pricing. In effect, Google closed the auction in cases where click-thru rates are low – and established a kind of reserve on advertising spaces. There is probably no place this has a more dramatic impact than on campaigns built around targeting competitors.
The reason is simple. Even though searchers looking for close competitors are highly-qualified, they are also highly likely to click on the competitor they searched for – not your ad. That usually means that while qualification rates are high (the clicks you do get are good prospects) – click through rates are very low.
Very low click through rates mean Google Minimum Bids. And so search terms that might once have yielded you second or third position for a nickel now cost a buck-fifty or more for the same exposure. That – obviously – makes buying those search terms much less attractive than it might otherwise have been. In fact, meeting Google Minimum Bids frequently makes buying a Search Term uneconomic.
There are other strategies we see being deployed to “target” competitors that avoid this problem – and have the added advantage of carrying no legal risk.
The first, and most common, is broad match. When you buy a “broad” match, you are bidding into a Search Term regardless of the other words contained in the search. So if you buy “hotels” on broad match, you are effectively buying “Hilton hotels” as well. And if you buy “suites” on broad match, you are buying “Embassy Suites.”
Broad match is more interesting in some cases than others. It has the advantage of being completely safe from a legal standpoint. It’s simple to implement. It even works on Yahoo. In some cases it can provide good competitive targeting – in many others it won’t. The biggest drawbacks to Broad Match have nothing to do with competitive targeting – broad match frequently results in poorer qualification through inapplicable or marginally applicable combinations; it usually forces you to pay a higher price to get similar position compared to an “exact” match; and it makes it impossible to tune your creative at any lower level.
In short, while Broad match does provide a way of targeting competitors it has so many other implications that it needs to be considered on its own merits – with competitive targeting being a minor side-issue in most cases.
A less common strategy is to use content-match to target competitor brands – by creating a separate bid for content match – it’s possible to make a basket of words that do a pretty good job targeting content that mentions your competitors.
This strategy has several advantages. Unlike buying competitor brands, it raises no particular red flags – it’s unobtrusive. Depending on your industry, it can also be a very effective way to get good content matching – and it can do so in a potentially cost-effective manner. On the other hand, like all content-matching, it is vulnerable to inappropriate matching. Until recently, the lack of complete separation between content and search meant that the strategy sometimes required exposure on the search side - but at least on Google it is now possible to manage Content with pretty much complete independence. We've had quite good luck with this strategy - but for many SEM Programs it may not provide much scalability – making it at best an incremental improvement strategy.
All in all, targeting competitors isn’t generally going to be the linchpin of a SEM PPC strategy. Direct buys are often unattractive unless you can generate a pretty good click-thru rate (which is hard). Alternative methods have either significant drawbacks or lack of scalability or both. This means that when you think about trying this approach, your expectations should be limited. Like many SEM strategies, the returns are more likely to incremental than revolutionary – a fact which ought to be considered when weighing the potential legal risks.