Why Competitor Brands Need to be in Your Negative Keywords

How it can Improve ROAS & Lower CPCs

To ensure effective ad spend when managing PPC campaigns, it’s important to exclude certain audiences and keywords that are not likely to engage with your ad or lead to a conversion — this is where negative keywords come in. 

Negative keywords are search terms (and phrases) you don’t want your ads to appear for and can prevent your ads from showing on irrelevant searches. Negative keyword lists are a way to organize and manage these negative keywords across your PPC campaigns, saving you hours of time of adding the same negative keywords to new or updated campaigns.

Other examples of irrelevant and accidental, but costly traffic include:

  • Users looking for free information
  • Users researching options in their area
  • Users who are not yet ready to make a purchase
  • Searches for free images and resources
  • Similarly named products or brands 

In this blog, we’ll discuss the impact of negative keywords on performance, and, more specifically, how adding competitor brands to negative keywords can improve your overall Return on Ad Spend (ROAS) and improve the efficiency of your advertising spend.

Improve overall campaign performance

Improving campaign performance is crucial to increasing site traffic and generating additional leads or sales. Every time your ad appears for an irrelevant search, it reduces click-through rates (CTRs), which negatively impacts your Ad Ranking. Low Ad Ranking is a double-whammy that results in higher CPCs and lower ad positions. By adding competitor brand terms as negative keywords, you can improve the relevance of your ads, which increases your Ad Ranking, and results in higher ad positions and potentially more efficient use of your budget.

Avoid wasted ad spend on irrelevant traffic

One of the main reasons to add competitor brand terms to negative keyword lists is to avoid wasting ad spend on irrelevant traffic. When a competitor’s brand term is used as a search query, it can trigger your ad to appear, even if the ad is not 100% relevant to search intent. 

For example, say a customer searches for “Oil Change Midas” and your ad for “Oil Change” appears. The customer, who in this case happens to be part of the Midas Loyalty Program, may click on the ad thinking it’s for Midas. *Many people searching Google and Bing don’t actually read the full ad before clicking.  This Midas loyalist lands on your Oil Change page only to realize after clicking the ad that it’s for a different brand, resulting in a bounce back to the SERP and wasted ad spend for you.

By adding your competitors’ brands to your negative keywords, you’re ensuring your ads only serve to customers most-likely to be interested in your brand, products or services, resulting in a better ROAS.

Avoid uncomfortable interactions with competitors…and potential legal headaches

Google considers bidding on competitor keywords as a legal and permissible strategy. Advertisers are permitted to target and bid on keywords related to their competitors’ brands, products, or services, leveraging the power of search engine marketing to increase brand exposure and attract customers. That said, Google restricts the use of brand names in ad copy. While there are ways to circumvent this restriction, the boundary must be navigated cautiously. 

Unlike the example below, a virtual waiting room app might craft ad copy like “Reshape Meeting Culture” or “Overcome Meeting Burnout” without explicitly mentioning a specific brand name. 

example of brand names in online ad copy
Probably hearing from Zoom’s lawyers soon…

What about competitive conquesting? 

An inverse strategy some companies pursue is intentionally bidding on their competitor branded keywords. This approach is typically adopted by those with a new business aiming to increase their brand recognition and businesses aiming to capture more market share. By leveraging the popularity and search traffic associated with competitor brands, businesses can divert customers’ attention towards their own products or services. 

In the example below, Fisker, Inc., an electric vehicle manufacturer, targeted Tesla to capture consumer interest in alternative electric vehicles without explicitly using their competitor’s brand name or keywords in their ad copy.

example of a fiskar online ad targeting tesla searches

Overall, adding competitor brand terms as negative keywords is a simple yet effective way to improve your PPC campaign’s performance and achieve better results. By preventing your ads from appearing on irrelevant searches, you can increase your ad positioning, improve CTRs, and increase the likelihood of conversions. Additionally, this strategy can lead to higher Ad Rankings, better ad positions, and lower CPAs. If you haven’t started adding negative keywords to your Google Ads campaigns, now is the time to get started.