Competitor Targeting in Google Ads: How to Bid on Rival Brand Names
You’re scrolling Google, search for a competitor’s name, and someone else’s ad appears above theirs.
It feels wrong. But it’s completely legal.
Bidding on competitor brand names is one of the most misunderstood PPC tactics in Australia. Businesses often think it’s either impossible, illegal, or unethical. It’s none of those things—it’s just smart competitive strategy.
Here’s what you need to know: In Australia and globally, you can bid on competitor keywords. You cannot use their trademark in your ad text. There’s a bright line between the two, and staying on the right side of it is straightforward.
In this guide, we’ll cover the legality, the strategy, when it’s worth bidding on competitors, what ad copy to write, and how to protect your own brand from competitor bidding.
Is It Legal? (Yes, with Caveats)
Australia’s consumer law (Australian Consumer Law) and trademark law are clear on this:
You can bid on competitor keywords. Nothing illegal about it.
You cannot use competitor trademarks in your ad copy. This is where the line is drawn.
Google Ads enforces this through:
- Trademark policy: You can’t use a competitor’s trademarked name in your ad headlines or descriptions (unless you’re an authorised reseller, which triggers exceptions).
- Intellectual property policy: Google will reject ads that use protected trademarks in the ad text itself.
However, the keyword search term is different from the ad copy. You can bid on “[Competitor Name]” as a keyword. Your ad just can’t say “[Competitor Name]” in the visible text.
Real example:
- Keyword bid: “[Xero]” (accounting software) ✓
- Ad copy: “Xero Alternative — Affordable Accounting for Aussie SMEs” ✓
- Ad copy: “Xero — Better Pricing” ✗ (uses trademark)
Google enforces this. If you try to use a competitor’s trademark in the ad text, your ad will be rejected.
Why Bid on Competitor Keywords?
People searching for a competitor by name are at a crucial decision point:
They’ve heard of that brand, they’re considering buying, but they haven’t committed yet. This is exactly where a competitor ad can win them over.
Behavioural reality:
When someone searches “[Competitor Name]”, they’re often asking:
- “Is this the right product for me?”
- “How much does it cost?”
- “What are the alternatives?”
If your ad appears with a compelling alternative message, you have a chance to redirect them.
Expected CTR and conversion data:
- Competitor keyword CTR: 3–7% (higher than generic keywords, lower than branded searches on your own name)
- Conversion rate: 2–5% (warmer than cold traffic, cooler than your own brand)
- CPC: Often 15–30% higher than generic keywords (competition is higher)
When it’s worth the spend:
- You have a clear, credible alternative value proposition.
- Your product is meaningfully different (different pricing, features, UX, or positioning).
- Your average order value or LTV is high enough to justify the higher CPC.
- You have capacity to onboard or serve new customers quickly (don’t bid on competitors if you’re at capacity).
The Strategy: Competing on Competitor Keywords
Step 1: Identify Which Competitors Are Worth Targeting
Not every competitor is worth bidding on. Focus on:
- Direct competitors (exact same product category)
- Competitors with significant search volume (pointless to bid on a niche player with 5 searches/month in Australia)
- Competitors with higher price points (if you’re cheaper, this is your angle)
- Competitors with weaker customer service (if that’s your advantage)
How to find search volume:
Use Google Keyword Planner (Google Ads → Tools → Keyword Planner):
- Type “[Competitor Name]” and see monthly search volume in Australia
- Do this for your top 5 competitors
- If volume is under 300/month in Australia, probably not worth the spend
Step 2: Create a Separate Campaign for Competitor Keywords
Never mix competitor keywords with your branded keywords. Different performance, different messaging.
Campaign structure:
- Campaign: “Competitor Targeting — [Competitor 1]”
- Campaign: “Competitor Targeting — [Competitor 2]”
This lets you:
- Track competitor bidding separately from brand performance
- Adjust bids and budgets by competitor
- See which competitors convert best
- Measure ROI on competitor spend specifically
Step 3: Bid Strategically (Not Recklessly)
Competitor keywords have high CPCs because competition is heavy. Bid strategically:
For high-LTV businesses (SaaS, professional services, ecommerce over $100 COGS):
- Bid aggressively (top ad position is worth it—you’re trying to intercept an in-market decision)
- Set bid about 10–20% lower than you’d bid on your own brand (they’re less ready to convert)
For mid-LTV businesses (local services, products $30–$100):
- Bid to position 2–3 (quality alternative positioning)
- Set bid 20–30% lower than your own brand keywords
For low-LTV businesses (impulse purchases, products under $30):
- Only bid if CPC is under $0.50. Otherwise, ROI doesn’t work.
The Messaging: How to Write Competitor Ads
This is where it gets tricky. You can’t mention the competitor in your ad copy, but you need to signal you’re an alternative.
Formula that works:
Headline 1: “[Competitor name] Alternative” or “Like [Competitor name]? Try [Your name]”
Wait—can you use their name in headlines? Actually, yes. You cannot use their trademarked logo or specific product names they own. But using their name contextually (“alternative to X”) is generally allowed, though it’s safer to test. Google’s actual policy varies by situation.
Safer approach (always works):
Headline 1: “A Better Choice for [What Your Product Does]” Headline 2: “Simpler. Cheaper. Better Support.” Headline 3: “[Your Brand] — [Key Differentiator]”
Example (Real scenario):
Target keyword: “[Xero]”
Ad copy:
- Headline 1: “Accounting Software That Won’t Frustrate You”
- Headline 2: “30% Cheaper Than The Alternatives”
- Headline 3: “Free Migration From Any Platform”
- Description: “Used by 5,000+ Aussie SMEs. Integrated with MYOB, Stripe & PayPal. Try free for 14 days.”
This never mentions Xero, but it’s clearly an alternative positioned for people shopping in that space.
Ad Copy Best Practices for Competitor Targeting
- Lead with a concrete differentiator (cheaper, simpler, faster, better support).
- Use social proof (“2,000+ Australian businesses use us” — mention Australia for local relevance).
- Lower the friction (“Free trial”, “30-day money-back”, “We’ll migrate your data”).
- Don’t trash-talk (Never say “X is terrible” — it looks desperate and hurts trust).
- Test urgency and specificity (“Aussie SMEs save $2,000/year” vs. “Save Money”).
Quality Score Impact: Why Competitor Keywords Perform Differently
Here’s a hidden cost: Competitor keywords often have lower Quality Scores.
Why? Because your ad text doesn’t match the search query perfectly. Someone searching “[Competitor]” sees your ad about “[Your alternative]” — that’s a mismatch signal.
Typical Quality Score:
- Your branded keywords: QS 8–10
- Competitor keywords: QS 4–6
- Generic keywords: QS 5–8
Lower Quality Score = higher CPC. A QS-5 keyword might cost 30–50% more than a QS-9.
To minimise this:
- Write ad copy that directly references the problem your competitor solves (without naming them).
- Use extremely relevant landing pages (the URL should signal “alternative” positioning).
- Keep competitor keywords in their own ad groups, not mixed with other keywords.
- Test ad variations aggressively (find the messaging that improves CTR, which boosts QS).
Protecting Your Own Brand from Competitor Bidding
While you’re bidding on competitors, they’re likely bidding on your brand name too.
How do you defend?
1. Set High Bids on Your Branded Keywords
Your brand keywords should always be position 1. If a competitor is bidding on your name, outbid them. Brand defense is non-negotiable.
Branded keyword bids: Usually highest CPC you’re willing to pay (often $5–$20 depending on LTV).
2. Use Ad Customizers to Reference Competitors
Show flexibility based on the competitor being mentioned:
“[Keyword: dynamic value]” is good, but here’s more advanced:
Use “Dynamic Search Ads” or “Responsive Search Ads” to automatically adjust copy based on competitor queries.
Actually, simpler: just bid high on your brand + use strong ad copy. Position 1 almost always converts better than position 2, even if position 2 is a competitor.
3. Build a Negative Competitor Keyword List in Your Brand Campaign
Create a negative keyword list of competitor names in your branded campaign. This prevents your brand ads from showing on competitor searches (you don’t waste money bidding against them on their own turf).
Wait—that contradicts what we said. Let me clarify:
Your brand campaign: Target your own brand keywords only (no competitor bids here). Negative out competitors.
Competitor campaign: Separate campaign targeting competitor keywords.
This separation is clean and trackable.
4. Monitor Competitor Bidding
Check your Search Terms Report monthly. Look for competitors bidding on your brand name. If someone is actively bidding against you:
- Option A: Keep crushing them with position 1 (you’ll win most of the time).
- Option B: File a trademark complaint with Google if they’re using your trademark in ad copy.
Most competitors won’t sustain bidding on your brand because your own brand ads convert 3–5x better and they bleed money. Eventually, they’ll stop.
Measuring Competitor Bidding ROI
What’s actually working?
Set up conversion tracking, then measure:
By competitor:
| Competitor | Clicks | Conversions | Cost | CPA | Revenue | ROAS |
|---|---|---|---|---|---|---|
| Competitor A | 245 | 8 | $1,240 | $155 | $4,000 | 3.2x |
| Competitor B | 180 | 2 | $1,080 | $540 | $1,200 | 1.1x |
Competitor B is killing your ROI. Cut the bid or pause entirely.
Competitor A works. Increase budget. A 3.2x ROAS is solid, and that’s from competitor targeting—typically lower-converting than brand.
Common Mistakes in Competitor Bidding
1. Bidding on Too Many Competitors
You can’t compete everywhere. Pick 2–3 competitors worth targeting and do them well. Spreading across 10 competitors dilutes focus.
2. Using Competitor Trademarks in Ad Copy
This gets your ads rejected. Test your ads before launching—use Google’s ad preview tool and make sure you’re not accidentally using protected names.
3. Not Tracking ROI Separately
“We bid on competitors” is meaningless. “We bid on competitors and get 2.5x ROAS” is actionable. Set up conversion tracking.
4. Ignoring Your Own Brand Defense
While you’re bidding on competitors, don’t let your own brand be a free-for-all. Keep your brand bids high and ads strong.
5. Over-Relying on Competitor Traffic
Competitor keywords are supplementary. Your core traffic should be:
- Your own branded keywords
- High-intent generic keywords in your category
Competitor bidding is the icing, not the cake.
Should You Bid on Competitors?
Yes, if:
- You have a clear, credible alternative value proposition
- Your CPA math works out (CPC is high, but conversion rate can justify it)
- You have the capacity to serve new customers
- You’re tracking ROI carefully
No, if:
- You’re not meaningfully different from competitors
- Your LTV is too low to justify higher CPCs
- You don’t have conversion tracking set up
- You’re just copying their messaging and hoping
Summary
Competitor bidding is legal and effective—if done right.
The playbook:
- Identify competitors worth targeting (high volume, real differentiator).
- Create a separate campaign for competitor keywords (easy tracking).
- Write ads that position you as an alternative without mentioning the competitor by name in ad copy.
- Bid strategically (not highest in the market, but high enough for position 2–3).
- Protect your brand (bid high on your own branded keywords, use negatives).
- Measure ROI obsessively (competitor bidding often has lower ROAS—only scale what works).
Done right, competitor bidding can 2x the volume of your PPC campaigns without a proportional increase in budget.
Anitech builds competitive PPC strategies including brand defence and competitor targeting for Australian businesses. We help you win market share from competitors while protecting your own brand position. Get a competitive audit and see where you’re winning—and losing—in the search results.
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