Bidding on competitors’ brand names as keywords in platforms like Google Ads is generally legal, but it involves several considerations regarding fairness, legality, and strategic impact.
Legality
Keyword Bidding: It is permissible to bid on competitors’ brand names as keywords. Google’s policies allow advertisers to bid on trademarked terms, including competitors’ brand names, as keywords.
Ad Copy Restrictions: While bidding on competitors’ brand names is allowed, using those trademarks within the ad copy is restricted. Google’s policy states that in response to trademark owner complaints, they may restrict the use of trademarks in the ad text.
Fairness and Ethical Considerations
Competitive Dynamics: Engaging in bidding on competitors’ brand names can lead to bidding wars, increasing advertising costs for all parties involved. This practice may be viewed as aggressive and could potentially harm business relationships.
Consumer Perception: Such strategies might confuse consumers searching for a specific brand, potentially leading to a negative perception of the advertiser employing this tactic. Ensuring transparency in ad content is crucial to maintain trust.
Strategic Implications
Quality Scores and Costs: Bidding on competitors’ brand names often results in lower Quality Scores due to lower relevance and click-through rates. This can increase the cost per click, making the strategy less cost-effective.
Alternative Keywords: Targeting keywords like “[Competitor’s Brand] alternative” can attract users actively seeking different options, potentially improving return on investment.
Legal Precedents
Case Example: In 2024, the U.S. 2nd Circuit Court of Appeals ruled that Warby Parker‘s use of 1-800 Contacts’ trademark in Google ads did not constitute trademark infringement, as there was no evidence of consumer deception.
Conclusion
While bidding on competitors’ brand names as keywords is legally permissible, it requires careful consideration of ethical implications, potential legal challenges, and strategic costs. Businesses should weigh the benefits against the risks and consider alternative strategies to reach their target audience effectively.
