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Does bidding on competitor names in search work?

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Bidding on competitor names in search – as Marks & Spencer is alleged to have done in the case brought against it by Interflora that’s currently being taken to the European courts – is a poor investment strategy, say search marketing experts.

They say that consumers expect to come up with the website bearing the name that they’re searching for – not that of a competitor. Retailers are therefore unlikely to see a return on their investment if they use Google AdWords to bid on competitor search terms, ensuring that their own name comes up in the results when computer users search for their rival. That’s what M&S is alleged to have done, bidding on the Interflora name in order to promote its own flower delivery business, in a long-running case brought by Interflora and now heading to Europe for a decision. Last year the case was referred by the High Court in London to the European Court of Justice.

“Certainly this isn’t a strategy we’d recommend to our clients,” said Martin Dinham, sales director at search consultancy Guava UK. Regardless of moral or ethical standpoints he said, ”this type of strategy is unlikely to prove successful from a return on investment perspective.”

Why? Dinham said: “Search engine users typing brand-related searches are typically ready to buy, one of the main attractions of PPC. Serving up a ‘Toshiba TV’ advert to a user looking for ‘Samsung TV’ related keyphrases is unlikely to convert to a sale, therefore. I’d also question the compatibility of this type of strategy with the brand profile of someone like Marks & Spencer.”

Meanwhile, Matthew Whiteway, client services director at specialist search agency and technology firm Greenlight, said: “Most advertisers tend to avoid bidding on competitor terms for a number of reasons, including quality score implications and poor return on investment.”

Whiteway added that if Interflora does succeed in its case it would set a precedent, with a number of advertisers likely to follow its lead. Online marketers would also need to review their AdWords account if the case is successful.

At the time of writing, a Google search for Interflora currently finds Interflora at the top of the sponsored links, above rival Asda Flowers.

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