Never Advertise on your Competitor’s Name on Google

August 23, 2010

So you have been wondering: “Should you advertise on your competitors’ names as keyword searches?”

“NEVER SAY NEVER!” This post isn’t going to answer that question yes or no, because like most everything in internet marketing, it is very subjective and there are lots of variables that must be considered.  We do ppc management for life insurance companies.  One client that just got started is generating leads for their whole life insurance company.

Take a glance at their numbers (click to enlarge):

The “insurance companies” campaign (referred to as the “IC” campaign moving forward) advertises only on keywords related to, or exactly, the competition’s company names. The “whole life insurance” (referred to as “WLI” from now on) campaign advertises on keywords that relate to the clients actual product/service offering.  Based on these numbers alone, it is easy to see that the WLI campaign is doing much better than the IC campaign.  The CTR is under .4% (for search) and the cost per conversion is a NASTY $237!  Sure, IC has a lower cost per click, it is showing up in a higher average position, with 64 more clicks, and about 34,000 more impressions, but that conversion rate and cost per conversion are horrific.

The biggest “tell all” number from above is cost/conversion, and obviously, if one campaign costs 3x as much to generate the same conversion, most likely you don’t have to question which one is performing better, and which one you should pause or adjust.

So the question still remains: “Should I advertise on my competitors’ names as keyword searches?” My answer is: “Do you have enough info to draw any conclusions?” “What don’t you know still?”

Here are the other factors still not considered, THAT MUST BE, before you make any rash or hasty decisions:

–How is the ad copy? Do the ads really stand out and tell the “smart researcher” why they should not go to the competitor and come to you?  You have to be VERY convincing because online searchers aren’t dumb anymore, and don’t you forget that!!!  If they searched for your competitor, that is who they were looking for, and you need to be extremely careful that you look for “out of the box” ways to catch their eye.   Sorry, I can’t show you the ad copy of the ads related to these campaigns to respect the privacy of my client.

–What is the Quality Score looking like?  More often than not, when you advertise “off of your own turf,” you get beat up with bad QS.

–Are the landing pages convincing?  Okay, so you caught the searchers eye, which tells us that he may not be so loyal to the company he was searching for, now what? Are you going to convince him why you’re better and specifically state reasons focused on why he should choose you? Do you have a strong value proposition, and a powerful call to action?

–Are these numbers statistically significant?  What kind of a time frame are we looking at? I wish I had paid more attention in Professor Brown’s Stats 220 class! With or without being a stats genius, we all know that four conversions on 168 clicks is bad, especially because the CPC is over $5. BUT, what if you get four more conversions before you hit your 200th click?  Now the campaign is headed in the right direction, and not doing as bad as it had originally looked. Make sure that your campaign is given a fair chance before you give up on it! Too often, campaigns are paused, when really all they needed were a few adjustments.

–What about budget? In the numbers above, Google tells us that our campaigns are limited by budget. If that is the case, my recommendation is to put all of your money into the best performing campaign.  Just like when people ask me about whether or not they should be advertising on all three search engines, I tell those with small budgets that they should not because they spread themselves thin, and it takes longer to learn from the data.

–Who else seems to be having success advertising on their competitors’ names? What are they doing? My partner Luke will do a post that analyzes the ad copy and landing page with screen shots of some of those out there that are doing it the right way.

But wait, the question still remains: “Should I advertise on my competitors’ names as keyword searches?” My answer, “What do you think? I have given you a lot to consider, and feel that until all things are considered, you shouldn’t make up your mind.”

-Stu

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