The Pros & Cons of Competitor Campaigns In Paid Search

The wily art form of pay-per-click advertising is always evolving, and that’s surely true in the paid search space where platforms like Google and Bing, as well as their audiences, are constantly changing the way they seek and display information. One of the most prominent strategies for companies hoping to keep up with the Jones’ is studying your fellow paid search competitors, who may be able to give you some insight on demographics you may not be targeting or trends you may not have noticed.

This page aims to present an overview of how paid search competitor campaigns work, and describe what the advantages and disadvantages of this focused strategy can be. Ultimately, this is a valuable tool for any marketing agency involved in PPC, so perfecting the approach to ensure your campaigns are both thoughtful and effective can lead to an even greater return on investment than originally anticipated.

What Is a Competitor Campaign in Paid Search?

Gaining the upper hand in a competitive digital marketing ecosystem can be a challenge, but a good way to keep a finger on the pulse of the industry is by monitoring what your competition is doing. Paid search competitors often create campaigns that target the keywords that their rivals are trying to rank for, and hope to garner appeal to a prospective audience by framing their products or services as the better alternative. This is a great way to increase brand awareness and is a promising way for a company to distinguish itself amidst crowded organic results.

For example, a business in the lawn care industry is trying to emerge as a disrupter by pushing its battery-operated equipment. Instead of continuing to cater to those who are into “going green,” the company alternatively tries to focus on reaching homeowners who are reliant on gas-powered tools, such as farmers and others with bigger properties, by touting operational efficiency, savings, and comparative advantages. This could mean targeting keywords like “best gas mower” or “commercial lawn edger.”

Once these types of campaigns enter circulation, engaging copy that leads to relevant landing pages and meets the intent of the search query can catch the eye of anyone, meaning a clever type of PPC ad can strike the right chord with an audience if executed correctly. This doesn’t just come down to the creative, though. It also includes the bidding strategy, which doesn’t necessarily depend solely on ROI — marketing with the goal of increasing visibility or making inroads with an audience who are on the fence can be equally as valuable.

Competitor campaigns perform differently across Google and Microsoft Ads due to variations in audience behavior, cost-per-click (CPC), and competition levels. While Google Ads often has higher CPCs due to greater competition, Microsoft Ads can sometimes offer lower-cost opportunities with a slightly different user base, often skewing towards an older and more professional audience. Keeping these platform differences in mind can help refine bidding strategies and maximize ROI while targeting your competitors’ keywords.

How to Identify Your Paid Search Competitors

Step 1: Use Google Ads Auction Insights

The Auction Insights report that Google Ads provides will allow you to compare your performance to other advertisers who you’re bidding against for specific terms. This report reveals data like impression share, average position, overlap rate, and top-of-page rate. This will help you make sense of the terms both you and your competitors are trying to rank for, and show you how they stack up.

Step 2: Leverage Third-Party Tools for Competitive Analysis

Third-party tools like Ahrefs and SEMrush are examples of analytical programs that allow you to see your competition’s paid search initiatives at a grander scale, helping you make informed decisions based on relevant data such as which keywords they’re targeting, the content on the landing page, and even historical data of competitor’s paid performance.

Step 3: Conduct Manual Search Tests

Conducting your own manual research by searching for competitor keywords can clarify who is jockeying for these spots, and allow you to develop countermeasures. Remember to always conduct this research from an incognito browser to avoid any personalized results.

Step 4: Monitor SERP (Search Engine Results Page) Trends

Always monitor SERPs to stay up to date with who’s paying for which terms. This way, you’ll know exactly when competitors are increasing or decreasing their efforts based on things like presence, ad placement, and the ad copy itself.

Pros of Competitor Campaigns in Paid Search

In the interest of paid search campaigns, there are many upsides to taking advantage of competitor keywords. Here are the primary reasons why.

• Competitive Differentiation – Defining what sets your brand apart from the competition is of utmost importance because you want to garner attention by highlighting a distinct advantage.
• Increase in Brand Awareness – The more a brand’s name appears alongside its competition, the more customers will be aware that options exist within the industry and may present a better alternative for them.
• Portion of Market Share – There’s nothing more satisfying for a business than taking away a percentage of sales from its rivals, so being proactive when a competitor is hiking up prices or receiving negative publicity can be a strategic move.
• Satisfies User Intent – Because of their particular query, you already know internet browsers are searching for a specific type of product, which puts you in front of eyes you already know are interested in what you’re trying to market.
• Cost-Effective – If your competition operates on a grander digital scale than you have previously, the cost-per-click for competitor keywords could be lower compared to more general terms. However, CPCs for branded competitor terms can actually be higher due to lower Quality Scores, so going after keywords that are close but not identical to these branded key terms can be advantageous.

Cons of Competitor Campaigns in Paid Search

Just like any marketing strategy, there are inevitable downsides to running competitor campaigns in paid search, especially if you rely heavily on this for your overarching strategy. Here are a few of the negative aspects of these types of campaigns.

• Low CTRs – Just because you appear alongside a competitor doesn’t mean you’ll be able to convince their most dedicated customers to switch to your product or service. This means they may skip over your ad and navigate to organic results instead.
• Brand Reputation/Loyalty Considerations – In the same way that targeting loyal customers unwilling to choose the alternative is wasted ad spend, your own reputation can be negatively affected if your customers see your competitive marketing strategy as over the top.
• Higher CPCs – Because your ad specifically uses branding terms, you will likely experience lower quality scores from search engines who don’t see your landing page as relevant as the authentic brand’s website. This can make it a pricier strategy unless you’re seeing a high clickthrough rate.
• Potential Legal Risks – Be sure that the copy you use in a competitor campaign doesn’t infringe on any use of trademarked terms; otherwise, possible legal action could be instituted.
• Could Result in Bidding Wars – Because brands themselves control the results of their own keywords due to their high Quality Score, they could choose to retaliate to competitor campaigns by doubling down on their own initiative, which drives up CPCs for everyone. To avoid overspending in a bidding war, advertisers should regularly monitor performance metrics like CPC and conversion rates, while setting bid caps or automated rules to maintain efficiency and prevent escalating costs.

Advantages of Analyzing Competitor Campaigns

Running campaigns is only half of what a specialist can do to learn about their paid search competitors — the analytical period that follows is just as insightful, whether you’re evaluating your own company’s campaigns or other adjacent competition within the same industry.

Helps You Understand Customer and Industry Behavior

No matter which industry you operate in, all companies understand that keeping pace with your competitors is critical to a successful business model. Before you run your own competitor campaigns, you can see what others in the industry are doing to keep up with the leaders, then base your approach on what’s working. This will also help you keep tabs on new trends, how the market is changing, and, of course, how customer’s preferences are constantly evolving.

Presenting your business as an equivalent alternative is not enough. To be persuaded to switch brand loyalty, customers must be persuaded by certain advantages your business provides that others don’t. By analyzing the most pertinent pain points, you can focus your messaging on addressing their concerns, which has the potential to lead to more engagement, and even a crossover if customers discover a product or service that better aligns with their preferences.

Uncovers Marketing Insights and Strategies

Competitor campaigns are a good litmus test to conduct in order to learn how you stack up against your fellow industry opponents, and how these ads perform helps provide direction on your keyword usage, messaging, and placement going forward. Positive takeaways can always be derived from these types of campaigns because they allow you to grasp the strengths and weaknesses of your competitors, allowing you to close gaps more quickly.

You can also optimize your company’s keyword bidding strategy in the paid search space based on what your competitors are targeting and what they aren’t. This is where you will realize that honing in on certain keywords is a more efficient return on investment, especially when you’re capitalizing on areas where their positioning is weaker. All of these intricacies add up to greater profitability over time, whether it’s by gaining new customers with intriguing messaging in ads, or using effective branding to increase relevancy.

And while it’s smart to monitor paid search competitor campaigns relating to keywords, other strategies, such as display advertising and remarketing, can also build off these efforts, allowing you to analyze additional examples of competition across different mediums — such as Google’s Performance Max campaigns or YouTube video.

Leads to Future Inspiration for Ad Campaigns

The more experience you gain from running these types of campaigns and the more you understand the motivations of your industry and its customers, the better you’ll be able to tailor your approach to differentiate your business from the competition and establish an identity that separates your company from the rest. Many times, watching the successes and failures of your competitors from the sideline gives you the most clarity on how to attack next, whether from a creative or financial standpoint.

Drawbacks of Relying on Competitor Campaigns

With any digital advertising endeavor, there’s the forethought not to put all your eggs in one basket. There is always the possibility of campaigns backfiring for a variety of reasons, but that doesn’t mean they won’t provide valuable insights along the way.

First and foremost, relying too heavily on what the competition is doing can make your brand appear to lack creativity or originality, hurting your innovative identity and possibly even appearing lazy to your core user base. It also doesn’t help you stand out among industry competitors.

Another issue arises when simply outbidding competitors with their own keywords because high CPCs without conversions are an easy way to drain marketing budgets quickly. On the contrary, a rival may just counter by invigorating their own campaigns, making your investment more or less obsolete. Or worse, you get involved in a bidding war that drives costs up, and may even result in your competition bidding against your own businesses’ keywords.

Finally, Google and other search engines are always monitoring campaigns and looking out for unethical marketing tactics, so if your company is continuously found to violate policies by creating aggressive or misleading ads, it could get you in hot water. A relationship you’re risking even more is between your business and the customer, who may be turned off by your PPC strategy, which could potentially damage credibility.

Lamark Media’s team of paid search professionals are well-versed in the complexities of the digital marketing landscape, including all of the intricacies of massive platforms like Google, who provide the infrastructure for our clients to develop their brand name and identity in their ecosystem. Consult our paid search services today and see how our PPC department can help your business develop competitor campaigns to achieve the advantages on industry competitors we discussed in this bog.