Bidding on competitor brands: worth it or just a tax

Someone in the meeting always suggests it. We should bid on their name. It sounds decisive, it takes four minutes to set up, and in most of the accounts we are handed it has been quietly losing money for about a year without anyone checking.

It can work. It works less often than people expect, and the conditions are narrow enough to list.

The asymmetry

When someone types a competitor’s brand name, they have already decided. You are not competing for an open question. You are trying to reverse a conclusion in the second and a half before they click the thing they came for.

The auction charges you for that. Your ad and your page are less relevant to that query than the brand owner’s, so you pay more per click for a worse slot, while the brand owner defends their own name cheaply. Your attack costs more than their defence, structurally, and no amount of optimisation fixes it. Expect a low click-through rate, a high cost per click, and a conversion rate below your normal campaigns. All three at once. If the arithmetic does not survive that, stop here.

When it is worth doing

You have a provable difference the searcher cares about. Not better service. Something checkable: no contract where they require twelve months, in stock where they are on back order, a feature they do not have. It has to fit in the headline.
The competitor has a known problem. A waiting list, a price rise, a withdrawal from your market. Demand for a brand outlives the brand’s ability to serve it, and that demand is genuinely available for a while.
Your customer is worth a lot and a human being closes the sale. If one won client pays for two hundred clicks, the sums change entirely. This is why competitor bidding is far more common in B2B and high-ticket services than in retail.
They are already bidding on you. Sometimes the only purpose is a bargaining position, and occasionally both sides stop. That is a business decision rather than a marketing one and should be budgeted as such.

When it is just a tax

Skip it if your product is broadly interchangeable with theirs and the only difference is preference. You will pay premium prices for people who bounce.

Skip it if you are small and attacking someone much larger on the strength of the ad alone. The person searching a large brand knows what they are getting; a stranger’s ad above the result does not change that.

Skip it if the budget is tight enough that this money would otherwise buy your core commercial terms. Your own category keywords are always the better use of a constrained budget. This is something you fund with money you already have.

And skip it if the motive is revenge, which is the most expensive motivation in advertising and much more common than anyone admits in a meeting.

Running it as an actual test

Separate campaign, fixed budget, its own targets. Never inside a brand or generic campaign, where it will hide in a blended average and look acceptable.
Exact and phrase match only. Loose matching on a competitor term drags in their support queries, their job adverts and their login page. Add login, support, careers, contact, complaint and refund as negatives on the first day.
A dedicated page, not your homepage. Something that addresses the comparison in the first screen.
A kill number and a date, written down before launch. This is the step everyone skips, and skipping it is the whole reason these campaigns survive for a year.
Judge it on closed business. Competitor traffic produces a lot of people who are only comparing. If your sales team calls them time-wasters, check whether they are right before overruling them.

What the policy actually says

Here is the part that changes how cautious you should be, and most articles on this topic get it half right.

Google’s trademark policy states plainly that it will not restrict the use of trademarks as keywords. That part is settled and not worth worrying about. The restrictions apply to the visible ad, and only in response to a complaint from the trademark owner, and only in countries and industries where that owner has demonstrated rights.

Then the line that matters most to anyone reading this, and which the permissive version of this advice always leaves out. The same policy states that Google Ads will restrict “using trademarks in an ad from a direct competitor”. If you are bidding on a rival precisely because you are a rival, that is you.

The exceptions that do exist are mostly not yours. A reseller may use the trademark where the landing page is primarily dedicated to selling those products and gives a clear way to buy them with prices shown. An informational site may use it where the page’s main purpose is to provide informative detail about those products, or an index of results related to them. A trademark used descriptively in its ordinary meaning is also fine. So the keyword is genuinely safe; the ad text, for a direct competitor, is not.

Now the sting, which is the reason we are careful with clients who want to push it. When Google upholds a complaint, the restrictions “will generally be applied on an ongoing basis in any ads that use the same second-level domain in their final URL”. Not the campaign. Not the account. The domain. One aggressive headline can cost you the ability to name that trademark anywhere in your advertising, including in the legitimate reseller or comparison contexts above.

Which brings up something new. In AI Max campaigns, text customisation generates ad copy from your landing page and existing assets. If that page is a comparison page carrying a competitor’s name, you have handed an automated system the material for a headline you would never have written yourself. Google’s AI Max documentation does provide brand controls, with brand exclusions available at campaign level. Use them. We would rather set a brand exclusion than find out what a generated headline said in week three.

The thing to try first

Before buying their name, go after the searches where people are comparing without naming anyone. Alternatives to, versus, best for. The intent is the same, the clicks cost less, and you are not fighting an opponent with a structural advantage. Pair that with a genuinely useful comparison page and you get most of the benefit at a fraction of the price.

And check you are defending your own name properly first. Losing your own brand to a competitor while spending on theirs is a poor trade, and we see it often enough that it is worth a two-minute search before anything else. That audit is part of our ads work for most new clients.

Where we land, which is nowhere tidy

We run competitor campaigns for some clients and they earn their place. We have also switched off campaigns like this and watched nothing happen to total revenue, which is a result nobody enjoys reporting.

The honest summary is that the practice is an arms race in which both sides pay and Google collects from both. If your competitor is bidding on you, defending costs you money you would rather not spend; if they are not, starting it tends to teach them to. We have never found a position on that which feels both commercially sensible and entirely comfortable, and we are suspicious of anyone who writes about this topic as though they have.