Competitor bidding is one of the more divisive tactics in paid search. On the surface, it looks like a smart way to intercept high-intent traffic at a lower cost than generic keywords. But there are risks. Retaliation is common, CPCs can escalate, and if not handled correctly, the strategy may backfire.
That said, when executed thoughtfully, bidding on competitor terms can deliver incremental traffic and awareness—especially when backed by smart copy, compliance with ad policies, and a strategic mindset.
Here are TMI’s guidelines for building an effective, respectful, and ROI-driven competitor bidding strategy.
1. Know Your Competitive Edge
Before entering the auction on a competitor’s brand, ask:
Why should the user consider you instead?
Do you offer better promotions?
Is your mobile experience superior?
Do you have more features or flexibility?
Clear answers to these questions form the basis of compelling ad copy. Remember: the user has searched for the competitor—you’re already at a disadvantage. The ad needs to counter that bias by communicating a clear and relevant alternative.
Example: If your gaming site offers a stronger welcome bonus and a better desktop UX than a named competitor, highlight those points—without naming them directly.
2. Understand Google’s Trademark Policy
One of the biggest pitfalls of competitor bidding is trademark misuse. According to Google’s trademark policy, you cannot use a trademarked brand in ad headlines or descriptions without authorisation.
However, there’s an exception:
Trademarked terms are permitted in the display URL, particularly in post-domain paths or subdomains. This is a loophole affiliates can leverage—to reference known brand terms without explicit mention in ad copy.
Example:
An ad promoting a bookmaker welcome offer may reference ”/best-bookies/paddypower-offer/” in the display URL, even if “Paddy Power” isn’t in the headline or body.
Use this tactic judiciously—and always test for compliance and impact on CTR.
3. Don’t Bid Too Aggressively
Outbidding a competitor on their own brand is an uphill battle. Their ads will likely enjoy a higher Quality Score due to better landing page relevance and stronger historic CTRs.
Your aim shouldn’t be dominance—it should be incremental exposure.
Keep bids modest
Focus on high-CTR creative
Accept lower impression share in exchange for efficiency and visibility
This approach also minimises the chance of provoking a bidding war—especially important in sectors where “gentleman’s agreements” still hold sway.
4. Watch for Defunct Competitors
A shutdown competitor doesn’t mean demand vanishes overnight. In fact, it creates an opportunity: users still searching for the brand are actively looking for alternatives.
Capturing that traffic early—before others realise—is a clever way to acquire high-intent users at a low cost.
Caveat:
Decide whether to reference the now-defunct brand in the ad copy. While it may improve CTR, it could be seen as insensitive or opportunistic. Reputation matters.
5. Collaborate with Clients
If you’re an agency managing a client account, always align on competitor bidding strategy. Some sectors operate on informal no-bid pacts; others don’t.
Ask clients:
Are there competitors we shouldn’t bid on?
Do you have active partnerships that we should avoid targeting?
What differentiators should we promote?
Transparent communication avoids awkward outcomes—and ensures that any traffic won is worth the friction.
Conclusion: Play the Long Game
Competitor bidding isn’t about conquest. It’s about strategy, nuance, and timing.
Know your value
Stay compliant
Be subtle in execution
Avoid aggressive bids
Watch for emerging opportunities
Communicate clearly with stakeholders
When treated as a scalpel, not a sledgehammer, competitor bidding can be a cost-effective tactic for driving incremental volume and brand consideration—without igniting full-scale SERP warfare.
