Defending Your Brand in Keyword Bidding Wars

– 19th November 2020 –

John-Onion-Managing-Director

 

Defending Your Brand in Keyword Bidding Wars

 

Paid search brand attacks are becoming increasingly commonplace. They can be harmful if left unchecked, and if a bidding war ensues the only real winners are the search engines.

When we’ve needed to let clients know that this has happened, the general principles and subsequent advice is always similar, so I thought I’d lay things out here for the benefit of everyone. Firstly, I’ll run through the factors at play. At the bottom of this article we’ll look at what to do if you think your brand is coming under attack.

 

 

Why is a competitor bidding on your keyword?

 

The aggressor brand is able to circumnavigate (typically) more competitive and expensive, intent-based keywords, and focus on taking traffic and sales away from competitors (the defending brands).

As the user has reached the point of searching for a particular brand, they would usually be in the ‘purchase’ phase, not the ‘research phase’. The closer advertisers can reach consumers at point of purchase, the more likely that user is to convert.

For example, the keyword ‘buy a TV online’ might theoretically cost £5 per click. A competitor’s brand, ‘LG TV’ would likely be considerably less, conceivably 50p. Was LG to bid on ‘Sony TV’ and successfully convert the user, they could be reducing a competitor’s revenue, whilst increasing their own, at reduced cost.

There are other gains to be made from bidding on competitors brand names beyond exposure and high quality traffic. There will be extremely useful data around those brand queries, including volume, and associated keywords. Also, one brand is able to invite comparison against another, and frame it in a way that favours them.

If this is happening to your organisation, your competitor hasn’t necessarily decided to bid on your brand directly. It could be an aggressive agency – they could be following Google’s keyword suggestions. So the first step isn’t necessarily to go knocking down doors, but open a dialog; and it’s good to know the practicalities first.

 

What are the legalities?

 

It is legal to bid on other organisations’ branded keywords. Sometimes Google, (for example), will trademark certain keywords. But this is infrequent, inconsistently applied, and typically only done for mammoth organisations with significant spend in paid search. It’s legal to do and hard to prevent if you are defending yourself.

It isn’t legal for the aggressor’s ad text to make it appear that they are the organisation who’s keywords they are bidding on as this could mislead the user (who is often the consumer). This was cited in 2013, when Interflora sued M&S for branded keywords together with ads appearing to lead to an Interflora service. With dynamic keyword Insertion (DKI) ads, (automatically repeating the keyword being bid for in the ad text), it could be easy to make this mistake. So legally, fixed ad text should be used.

 

Are there any moral implications?

 

Arguably. From a user’s perspective, they have been quite specific in looking for a particular brand. Bidding on keywords when you are not the brand they are looking for is clearly outside ‘user intent’.

This can be more clearly illustrated in the charity sector, with bidding on competitor brands takes increases the price of traffic, takes money away from both advertisers, and as such the cause they are trying to support.

 

What about ‘keyword focused’ brand names?

 

Where an advertiser’s brand name clearly indicates the activities they are involved in, they are not so easily defendable. For example, if a TV retail company called itself ‘buy a TV online’, then they are clearly putting themselves in the firing line of intent-driven keywords. The same could be said for ‘Diabetes UK’ or Cancer Research UK. (The charity sector is particularly at risk here as many charities like to clearly indicate their cause’ in their name).

In these situations, Google is unlikely to allow these terms to be trademarked and competitors are less likely to avoid these keywords. However, having a keyword focused brand offers organisations a slight advantage in bidding for those search queries, as below:

 

Are competitors able to bid on another brand’s keyword as effectively as the brand owner themselves?

 

No. Organisations that own their brands should be signalling clearer intent to search engines, and so be rewarded with an increased quality score (QS). This will mean that it should cost the defending brand less to rank above their rival, maybe by something like 20%.

There will still be a significant increase in cost for the defender to compete for their own branded traffic. Maybe several times greater than they would otherwise be paying. So long as the ‘aggressor’ brand is bidding within their means, (with an acceptable amount of revenue being generated from this activity), they could keep increasing the bid, and the cost for their rival organisation to defend their brand.

 

Does anyone win?

 

Google, certainly. It is no surprise that Google and other search engines benefit significantly from the mechanics of paid search that they have engineered. If brand names become competitive, as with other high-demand keywords, Google will pocket the increased cost-per-click on those keywords.

The issues around this are really highlighted by the charity sector. For example, one of the charities we work with is Crisis. They have a particularly well know Christmas campaign which they use to increase awareness around homelessness. Although the word ‘Crisis’ is common, there is little correlation for the keyword ‘Crisis’ to indicate intent to donate to a homeless charity; apart from where it applies to the brand. However, several other homeless organisations, (or their zealous agencies), do bid on this keyword, especially over the Christmas season.

Brand bidding wars really hurt the charity sector. Assuming an average donation amount achieved per click to be £10: If a rival is prepared to bid £8 for this click (and still make profit) and the charity is then also forced to match that spend to defend it’s own keywords. This could mean 80% of the intended donation going to Google.

 

In a brand bidding war does either organisation have an inherent advantage?

 

Perhaps. Let’s assume there are two advertisers where all other variables are equal: The same quality of service (or product), the same costs for production, the same cost of sale, the same ability to convert users that land on the site, – and so on. There is a strong commercial case that the smaller organisation with less brand awareness will have the advantage. There is more branded traffic they can take from their competitor, and less cost to themselves for the increase cost in defending their own brand in search engines. I’m over-simplifying here to illustrate the point, but often the smaller challenger-brand has more to gain and less to lose.

Also, ‘competitor bidding awareness’ is a big contributing factor to whoever has the advantage. The aggressor will have the upper hand here at the beginning. If one advertiser is aggressively moving in on another’s brand search traffic, until the defending brand spots it, the aggressor has probably found itself an opportunity.

If the defending brand does have effective detection in place, they are able to increase the cost of their click to defend their position, and maybe retaliate, but this is probably at considerable expense, and more money to Google. The defending brand could also decide to bid on the aggressor’s branded keywords in return, again, escalating the cost for this traffic.

 

What’s the process for stopping it?

 

Trademark. Try to get Google to apply that trademark across keywords as well as ad text. This should be done anyway, before any competitor bidding shenanigans take place.

Monitor. Regularly search for your own brand name and identify any competitors bidding on it.

Speak to the competitor and agree not to compete on bidding against each other brands. In many situations, this is going to make sense. Initially we recommend starting conversations at the level of whoever oversees the Google Ads account. Often someone like the Marketing Manager or Marketing Director. I recommend friendly communication in the spirit of cooperation, and to get buy-in from the other organisation. If no luck is found at that level, escalating this to a ‘CEO – CEO level chat’ would commonly be the advised next step. The case is simple: Please stop bidding on our brand, because if you continue, we’ll have to out-bid you, and in return, bid on yours. This would then cost us both a lot of money.

Not actively bidding on another’s brand wouldn’t stop advertisers from appearing when competitor’s brand names are included in the search query. For example, bidding on just the words ‘buy TV online’ might make Sony appear for the search query ‘buy an LG TV online’. Likely if LG are using their own brand in addition to the other words used, they will have the advantage, (greater relevancy = improved quality Score). However, for competitors to agree not to rank (at all) in search queries where the other brand is used, they need to go one step further…

Negative keyword matching goes one step further.  This is where one Google Ads account specifies that if a particular keyword is included in the user’s search query, they won’t enter the bid.  If organisations could align themselves so that each introduces the rival’s brand as a negative keyword, they would both be rewarded with significant cost reductions on their own branded traffic.

This has limitations with multiple advertisers, as it only takes one to break ranks, and due to the auction-based system for establishing price, the market rate for that brand would quickly shoot up.

The process can often work for charities, where economies of scale are such that there is often only a limited handful of organisations (of any considerable size) clustered around a particular cause. Often only two or three. This makes coordination between the groups relatively easy. If a collaborative approach can be taken, it should save all of them considerable funds.

 

In summary

 

Bidding on another brand is common, and in my experience, often organisations don’t even know they are doing it. So, keep communication friendly, but you do want to stop this where possible. Brands are built on the back of good awareness marketing; no-one want to pay for them again with significant search costs!

If this post is of interest and you would like to discuss in more detail, we’d love to help! Drop us your details in our contact page and someone will be in touch.

 

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