Is it legal to bid on competitor names in Google Ads?

Google allows trademarks as keywords. It restricts a direct competitor from using the trademark in ad text. In the EU, the Court of Justice has ruled that keyword use can infringe a trademark when the ad makes it hard to tell whose products are advertised. This is not legal advice.

Do competitor campaigns need to be profitable?

In my view, break-even is enough. A customer who switches from a competitor brings their future orders with them, so the first order doesn't have to carry all the profit.

Can I use dynamic keyword insertion in competitor ads?

Don't. Dynamic keyword insertion can put the competitor's trademark into your ad text. I had a trademark complaint once for exactly that reason.

Where should competitor ads send people?

To a page made for people comparing alternatives, which answers the complaints people have about the competitor's products. I'm against sending competitor searches to the homepage or a product page.

Competitor Search Terms Strategy for Online Stores

Q: Do competitor keywords convert?

Less than other searches. Across more than 15 accounts I run, conversion rates on competitor terms are usually up to 10 times lower than on generic searches, and the clicks are expensive.

A competitor search terms strategy only makes sense for an online store when switching to you is easy. Across more than 15 accounts I run, competitor terms are usually expensive, with conversion rates up to 10 times lower than generic searches. They can still pay at lower volume, and in my view they only need to break even, because a customer who switches brings their future orders with them.

This guide covers the rules on bidding on competitor names, when it’s worth doing, what results to expect, and what the ad and landing page should say.

Is it allowed to bid on competitor names in Google Ads?

Yes, as keywords. Google’s trademark policy doesn’t restrict trademarks used as keywords. It does restrict a direct competitor using the trademark in the ad text, and ads that use a trademark in a confusing or misleading way (Google Ads policy).

In the EU, the Court of Justice has ruled on this twice:

Google France (2010): a search engine that sells trademarks as keywords does not itself infringe them (EUR-Lex, C-236/08).
Interflora v Marks & Spencer (2011): an advertiser’s use of a competitor’s trademark as a keyword can infringe it when the ad doesn’t let a reasonably well-informed internet user tell whose products are being advertised (EUR-Lex, C-323/09).

In practice: bid on the name if you want, keep it out of your ad text, and make it obvious that the ad is yours. This isn’t legal advice; check with a lawyer if you’re unsure.

When do competitor search terms make sense?

When the cost of switching from the competitor to you is low. I don’t use competitor terms in every account, and the switching cost is the first thing I check.

Low switching cost: the buyer can move to you without losing anything. Many consumables, accessories, clothing and gift products work this way.
High switching cost: the buyer is tied in by an ecosystem, compatible products, subscriptions or habit. Converting an iPhone user to Android is hard, and I wouldn’t try it with competitor terms.

If someone searching for a competitor would have to give something up to buy from you, a search ad won’t change their mind, and the clicks are expensive.

What results should you expect from competitor keywords?

Expect expensive clicks and low conversion rates. Across more than 15 accounts I run, conversion rates on competitor terms are usually up to 10 times lower than on generic searches. They can still be profitable, at lower volume.

My target for competitor campaigns is break-even. A customer who switches from a competitor brings their future orders, their lifetime value, so the first order doesn’t need to carry all the profit. Work out your break-even ROAS and judge competitor campaigns against it.

Keep them in their own campaign with their own budget. Competitor names with big search volume can use up a daily budget fast.

What should competitor ads say?

Ad copy matters more here than anywhere else in Search. What works well is addressing the pain points and complaints people have about the competing products: slow delivery, poor support, missing features, high prices.

Read the competitor’s reviews to find the complaints that come up again and again.
Answer one complaint per ad, with a specific fact about your store.
Stick to claims you can prove. Comparative claims have to be accurate.

Don’t use dynamic keyword insertion in competitor ads. It inserts the search term into your ad text, which can put the competitor’s trademark there. I had a trademark complaint once for exactly that reason.

Where should competitor searches land?

On a page made for people comparing alternatives. I’m against sending competitor searches to the homepage or a product page: neither one answers the question the person is asking.

A good competitor landing page:

Addresses the same complaints as the ad, so the click makes sense.
Gives a clear reason to seriously consider you as an alternative: price, delivery, service, range, returns.
Makes switching easy, for example with a first-order offer or help choosing the equivalent product.

What should you do when competitors bid on your brand?

Make sure your own brand campaign is in place, and check Auction insights to see who bids on your name. Your brand clicks usually cost far less than theirs. The brand search guide covers how to set that up, and the exact match guide covers keeping the searches that matter in campaigns you control.