This is when you get Google to show your ads when someone searches for your competitor’s brand name.
For instance, you have a competitor called “ABC Fitness” who sells the same fitness products or services as you do. You’d add abc fitness as a keyword so that when someone searches for it, the ad for your business will show up.
The idea is that you’ll be able to get ABC Fitness’ customers to go to you instead.
This is also known as a conquesting campaign. It sounds cool, but is it really?
Google wins whenever businesses compete with each other
Google earns revenue whenever someone clicks on their ads.
When one business advertises, the other business(es) in the same industry will think they are losing out on potential customers and market share. Hence they start to advertise too.
This gives Google at least two chances to earn revenue - one from you, and one from your direct competitor.
We all know that you have more than 1 competitor, this means you’ll need to spend more to advertise against your many competitors.
When this happens, Google earns even more as they can charge more for each click (for each business).
This makes Google very happy.
Targeting your competitors’ names is good for Google. But is it good for you?
Because you pay Google for every click that comes through your ads, you want to make sure that your ads only show to people who have a high chance of buying from you.
You do not want:
- People who are genuinely looking for ABC Fitness. Such as its directions, contact details, and operating hours.
- Job seekers or suppliers trying to sell products or services to ABC Fitness.
This means that the actual number of people who are searching for ABC Fitness and yet have a high chance of buying from you is very low.
This situation is worse if you’re a local business.
The advertising results must justify any efforts spent on managing and optimising the campaign.
Now let’s have a thought experiment.
Here’s the assumptions we make:
- You need at least 1 new customer per month from this campaign to make your efforts worthwhile.
- You have a 20% closing rate for every potential customer that contacts you.
- You have a 1% conversion rate on your website or landing page.
With a 20% closing rate for every potential customer that contacts you, you need at least 5 enquiries to close 1 customer.
With a 1% conversion rate on your website or landing page, you need 500 website visitors to get the 5 enquiries required.
Here’s the kicker.
Advertising against your competitors’ names results in low Click-through Rates due to low ad relevance. It ranges around 1% - 2%.
Let’s use 1% for a conservative estimate.
To get the 500 website visitors that you need to get 1 new customer, you need 50,000 impressions.
This means you need 50,000 people who are searching for ABC Fitness and yet have a high chance of buying from you (i.e., people who are unhappy with ABC Fitness) just to get 1 customer.
Granted your numbers may be different. You may have an all-star sales team who can close at 80%. You may have a great website or landing page with a 5% conversion rate. Only you have the data to determine this.
For most local SMBs, the results do not justify the efforts spent on targeting your competitors’ names on Google Ads. You could get a better Return on Investment elsewhere.
Over to you:
Does it still make sense for you to target your competitors’ names in Google Ads?
If it does, great! Keep going at it.
If it does not, great! Now you can stop wasting your money and move on to something else.