We need to talk about the shady practice of bidding on competitor brands
16 January 2023 at 4:21 pm
Bidding on competitor brands in Google might lead to temporary benefit, but it’s in no-one in the sector’s long-term interest.
In July 2022, Kon Karapanagiotidis, CEO of ASRC, pushed enter on a tweet that’s since reverberated through the Australian not-for-profit online marketing world.
Kon directly called out a practice that’s been debated, hated, recommended, and often implemented (sometimes accidentally) in not-for-profit marketing, bidding on competitors branded keywords.
It’s a spicy topic and a conversation I’ve been part of since 2013, when I (idealistically?) brought together five of the largest humanitarian aid organisations in Australia with the aim of getting a commitment to cease bidding on competitor keywords.
We came close – most were on board, but not all.
For those less familiar with paid search and why this is a big deal, here’s a quick “search 101”.
What’s the issue?
Since Google started allowing it back in 2019, brands bidding on each other’s branded keywords has become fairly common practice. Monday.com, for example, is well known for targeting its competitors like Asana, Basecamp and Trello.
This is different from bidding on a keyword — like “Project Management” for example. Bidding on branded keywords means you’re specifically targeting a competitor’s name.
So if someone types Salvation Army, for example, and the first search result (a paid ad) comes up as Launch Housing…
… that’s bidding on a competitor’s branded keyword [see editor’s note at the end of this article].
It’s not hard to see why a charity — or company — would bid on competitors’ keywords. Someone looking for a specific charity might be ready to donate, in which case a competing charity — or company — is ready to swoop in and get the conversion.
But what may be temporarily good for one not for profit is undoubtedly bad for the industry.
Here are three reasons why we’re speaking out, and two actions you can take:
1. Inflated costs for all not-for-profits
By directly bidding on other charities’ branded keywords it drives their costs up because they have to compete with you for their own brand name. And in many cases, your competitors will return the favour and eventually bid on your branded terms and drive your costs up.
Going after a competitor’s branded keyword might have some perceived short-term benefits. You knock them out of the top paid spot and “get their traffic”. But this generally causes wasted advertising budget. Users searching for a particular brand are unlikely to donate to another brand once they visit the landing page and it becomes obvious that it’s not the charity they’re looking for. Sure you might get a few new donors but the majority will leave the page and try to find the charity they want to support.
The fact of the matter is, competition drives up CPC (cost-per-click — the more people bidding on the same keyword, the more the prices go up. Regardless of whether the tactic works or not.
Not-for-profits have tight marketing budgets and calling a moratorium on paid search brand attacks would help everyone keep their costs in check. In theory, your costs would be lower, if you stop and if you were the only one bidding on your branded keywords.
2. More donor dollars to Google and less to not for profits
The real consequence of driving up costs on each other’s branded keywords isn’t just the added strain to your marketing budget. It’s an added strain to your mission.
Marketing is a necessary expenditure for charities. If you get your strategy right, you’ll end up with more to spend on your mission because you’ll bring more donors to the table. But by bidding on competitors branded keywords you are wasting marketing spend by investing in tactics of questionable effectiveness – and questionable integrity.
3. It hurts smaller charities
Bigger charities are usually the most competitive because they have bigger budgets. They can absorb the increase to cost-per-click that results from competitors bidding on each other’s branded keywords. However, small charities don’t often have the same luxury. They need to make every dollar count and this often means being forced to spend hours convincing competitors to stop bidding on their terms.
What is even more challenging is that due to smaller budgets, smaller charities are easy targets for those with larger budgets bidding on their keywords. It’s truly a case of picking on someone that’s smaller than you.
How to stop others from bidding on your branded keywords
Unfortunately, there are no rules preventing anyone from bidding on competitors’ branded keywords, unless there’s trademark violation – which Google will only investigate if a complaint is submitted. However, the Fundraising Institute of Australia (FIA) has launched a new Digital Fundraising Practice Note, which addresses the issue of keywords and intellectual property.
If another organisation is bidding on your brand, here are our suggested next steps:
- Read more about FIA’s Digital Fundraising Practice Note. If the perpetrator is an FIA member, they must adhere to recommendations provided.
- Contact the charity directly. There’s a chance they may not even realise it’s happening, especially if they’ve outsourced their Google Adwords to an agency unfamiliar with charity marketing practices. Feel free to use the FIA code to facilitate the conversation.
- If a competitor won’t stop bidding on your branded keyword and you believe there’s a trademark violation, you can submit a complaint to Google.
Do unto others…
Most of all, if you don’t want other charities bidding on your branded keywords, don’t do it to them. If you rely on a third-party agency for help with your digital marketing, check to make sure they’re not bidding on competitor keywords without your knowledge. You can create an exclusion list of keywords you don’t want your ads to appear for i.e. common charity brands, so these keywords won’t be targeted across any campaign on your account.
At ntegrity, we have a standing policy that we won’t bid on other charity names. Make sure your agency does too. And make sure you communicate your policy to any new agency before you engage them.
We need an industry-wide standard
There are so many things not-for-profits have to worry about. Working with small budgets. Retaining donors. Solving giant social issues. If charities could stop bidding on each other’s keywords it would give them one less problem to address.
This year we’re combining forces with Marlin and Big Foot to put an end to competitor keyword bidding across the not-for-profit sector. Together, we’ll work closely with the Fundraising Institute of Australia to help create resources and training to help end this practice.
In the end, collective action – a sector-wide agreement prioritising fair play and mutual respect – is the only way to stop the poor practice of paid search brand attacks.
Taking positive steps
If you’re as concerned about this as we are, there are a few things you can do right now.
- The obvious first thing to do is look into whether you (or your agency) are currently bidding on competitor search terms. If so, organise to stop and use that budget more effectively.
- Sign up to our mailing list to be kept in the loop on the resources we are developing for FIA to help you navigate this.
- Finally, start talking about this. The more people who discuss the issue, the better chance we have of changing the industry. CEOs like Kon Karapanagiotidis have done a great job kick starting the conversation and may soon even start naming names.
Together let’s work to end this self-defeating practice and help ensure that all Australian charities’ marketing dollars are used as effectively as possible.
Editor’s note: Launch Housing confirmed to Pro Bono Australia it no longer bids on adwords from other charities or not for profits and has never sought to pass itself off as any other organisation. Previous tests to use competitor AdWords were part of a small retargeting experiment to target only those who had visited the Launch Housing website in the last 90 days.