Bidding on Competitor Keywords in Google Ads: Strategy, Costs, and Legal Rules
Jul 31, 2024Bidding on competitor brand names in Google Ads is one of the most debated—and misunderstood—strategies in PPC advertising. Can you legally bid on competitor keywords? What are the risks? And how much does it cost compared to other campaigns?
In this article, we’ll break down exactly how to run Google Ads competitor campaigns the right way. You’ll learn when it makes sense to use competitor keywords, how to structure your campaigns, what to expect in terms of CPC and conversion rates, and how to avoid wasting budget while staying within Google’s policies.
Key Takeaways
- Competitor campaigns in Google Ads can boost market share when structured and budgeted carefully.
- Always run competitor campaigns in separate campaigns and ad groups to control spend and track performance per brand.
- Expect higher CPC and CPA when bidding on competitor keywords compared to your own brand or generic terms.
- Highlight your unique selling points (USPs) in ad copy and landing pages to improve conversion rates.
- Use target impression share bidding, not maximize conversions, to control costs and improve visibility.
- Audit your competitor’s ad spend and CPC estimates before launching a campaign using tools like SEMrush or SpyFu.
- Exclude competitor brand terms from your other campaigns using negative keywords to avoid wasted spend.
What Are Competitor Campaigns in Google Ads?
Competitor campaigns are typically a “last ditch effort to get a sale” or a “hail Mary pass.” The user searching for your competitor’s name either:
- Knows and trusts that brand.
- Sees the brand as the market leader with strong brand/product association.
For example, Nespresso is synonymous with capsule coffee machines because they were first to market. Similarly, people might use "Nespresso" to refer to pod coffee in general. While I personally find Nespresso to be less than appealing (like swamp water masquerading as coffee), the point is clear.
With this understanding, you should expect the following with competitor campaigns:
- Higher CPC (Cost Per Click) compared to brand or generic traffic.
- Higher cost per conversion.
Despite these higher costs, competitor campaigns can be a great way to increase your market share if you already have profitable Google Ads campaigns. Here are the top 4 strategies for creating effective and profitable competitor campaigns.
Can You Legally Use Competitor Brand Names in Google Ads?
One of the most common questions when running competitor campaigns is: Can I legally bid on competitor brand keywords in Google Ads? The short answer is yes—but with limits.
Google’s Policy on Trademark Bidding
Google allows advertisers to bid on competitor brand names as keywords, even if those names are trademarked. This means you can legally run ads that trigger when users search for a competitor's brand.
However, Google does not allow you to use a competitor’s trademarked brand name in your ad copy unless you have permission. That includes headlines, descriptions, and display URLs. Violating this can lead to your ads being disapproved or your account getting flagged.
Best Practice: Stay Focused on Your USP
Instead of trying to mention your competitor directly in your ad copy (which could violate policy), focus on what makes your offer better:
- Are you cheaper?
- Do you offer better support?
- Are your reviews stronger?
Keep the messaging centered around your own value—not your competitor’s name.
How to Estimate Your Competitor’s Ad Spend and CPC
Before running Google Ads competitor campaigns, it helps to understand how aggressively your competitors are advertising—and how much it might cost to compete with them.
Use Tools to Benchmark Competitor Spend
You can’t see exact spend, but third-party tools like SEMrush, Ahrefs, SpyFu, or SimilarWeb can estimate:
- Their monthly Google Ads spend
- What keywords they’re bidding on
- Ad copy they're using
- Estimated cost per click (CPC) on branded terms
This gives you a sense of whether the competitor is investing heavily in their brand—and whether it's worth targeting.
Consider Branded CPC Benchmarks
Branded keywords typically have very low CPCs for the brand owner but much higher CPCs for competitors. You may pay 2–4x more to appear alongside their brand terms. Use your CPC estimates to set a controlled budget before launching the campaign.
Pro tip: Competitor CPCs can fluctuate rapidly depending on how defensively your competitor bids on their own name. Be ready to adapt your bids and test impression share strategies.
Create Separate Campaigns for Competitor Ads
FAQ
Can you legally bid on competitor brand names in Google Ads?
Yes, you can legally bid on competitor brand names as keywords in Google Ads, as long as you don’t use their trademarked names in your ad copy. Google’s policy allows brand bidding, but not brand impersonation.
Is it a good idea to run Google Ads targeting competitor keywords?
It can be effective if your campaigns are already profitable and you have clear USPs. Expect higher CPC and CPA, so this strategy works best when used carefully to gain market share.
How do I set up a competitor campaign in Google Ads?
Create a separate campaign with individual ad groups for each competitor brand. Add their brand names as keywords and highlight your competitive advantages in the ads and landing pages.
What bidding strategy works best for competitor campaigns?
Use a Target Impression Share bidding strategy to increase visibility. Avoid maximize conversions or conversion value, as they can push CPCs too high on competitor terms.
How do I stop my other campaigns from targeting competitor terms?
Add competitor brand names to your negative keyword lists in other campaigns. This prevents overlap and keeps your competitor strategy isolated for better performance tracking.
How much does it cost to run competitor campaigns in Google Ads?
CPCs for competitor campaigns are typically much higher than brand or generic keywords. Expect increased costs per conversion, but also the potential for increased visibility and market share.
What should I include in my ad copy when bidding on competitor keywords?
Focus on your product’s unique benefits. Use phrases like “The Original,” “More Affordable,” “100% Local,” or highlight stronger guarantees, faster delivery, or exclusive features.