Should You Bid on Your Competitor’s Name? The Truth

The Allure of Stealing Your Competitor’s Customers

It sounds like a brilliant plan over a beer. You see your biggest rival in Brisbane—maybe a law firm in the CBD or a massive plumbing outfit in Coorparoo—and you think, "Why don't I just show up when people search for them?"

In the world of Google Ads, this is called "competitor bidding." The idea is simple: someone types in your competitor's business name, and your ad pops up first. You swoop in, offer a better deal, and steal the lead.

At Local Marketing Group, we get asked about this constantly. Business owners love the idea of poking the competition in the eye. But I’m going to be blunt: for most small businesses in Queensland, this tactic is a fast way to set fire to your marketing budget with very little to show for it.

Let’s look at the hard data and the reality of how people actually use Google to see why this "genius" move usually fails.

Myth #1: "They’re looking for a service, so they’ll click my ad."

This is the biggest mistake business owners make. You assume that because someone searched for "Jim’s Local Plumbing," they are just looking for any plumber.

They aren't. They are looking for Jim.

Maybe they’ve used Jim before. Maybe their brother-in-law recommended Jim. Maybe they already have a quote from Jim and they are just looking for his phone number to confirm the booking.

When these people see your ad instead of Jim’s website, they don’t think, "Oh, here’s a better option!" They think, "That’s not what I searched for," and they keep scrolling until they find Jim.

In marketing terms, we see this in the numbers. When you bid on your own name, people click. When you bid on a competitor, the vast majority of people ignore you. If they do click, they often realise their mistake within two seconds and leave immediately. You’ve just paid $15 for a click that had zero chance of becoming a sale. This is why we tell our clients to focus on measuring ROI rather than just chasing clicks.

Myth #2: "It’s a cheap way to get brand exposure."

Google isn’t stupid. Their whole business relies on giving people exactly what they asked for. If someone searches for "Westside BMW" and Google shows them an ad for a local mechanic, Google knows that isn't a perfect match.

To discourage this, Google makes it much more expensive for you to show up for a competitor’s name than it is for the competitor to show up for their own name.

I’ve seen cases where a business pays $2.00 to show up for their own name, but a competitor trying to jump in has to pay $12.00 for that same spot. Google essentially charges you a "relevancy tax."

If you are a smaller operator, you are fighting an uphill battle where every lead will cost you five times more than it should. You are much better off spending that money to get prices down by targeting people who are searching for the service you provide, not a specific company name.

Myth #3: "I can just use their name in my ad to lure them in."

This is where things get legally murky. While you are allowed to bid on a competitor's name as a keyword, you generally cannot use their trademarked name in your actual ad text.

If you do, you’ll likely get a "Cease and Desist" letter from their solicitor faster than you can say "Fortitude Valley." Even if you don't get sued, Google will often flag your ad and shut it down.

Without using their name in the ad, your ad looks out of place. Imagine searching for "Woolworths" and seeing an ad that just says "Cheap Groceries Here." It looks dodgy. People trust brands they recognise. If they are looking for a specific business, an anonymous-looking ad rarely wins them over.

When Does It Actually Work? (The Rare Exceptions)

I’m not saying competitor bidding never works. I’ve seen it work for a few Brisbane businesses, but only under very specific conditions:

1. The "Big Fish" Strategy: If you are a small, hungry company and your competitor is a massive, national corporation with terrible customer service, you can win. You target their name and your ad says: "Tired of Waiting on Hold? Talk to a Local Brisbane Expert Today." 2. The Comparison Strategy: This works well for professional services like accountants or software. If someone is searching for a big brand, you can offer a side-by-side comparison. But even then, you need a very high-quality website to convince them to switch. 3. The "Out of Business" Strategy: If a local competitor has recently closed their doors or gone into liquidation, bidding on their name is a goldmine. Their old customers are looking for a new home, and you can be there to catch them.

What Should You Do Instead?

If you have a limited budget—which most small businesses do—stop trying to play games with your competitors. It’s an ego trip that rarely results in more money in the bank.

Instead, focus on these three things:

1. Own Your Own Name

2. Target "Intent" Keywords

3. Fix Your Website

The Bottom Line: Is It a Waste of Money?

For 90% of small businesses in Brisbane, bidding on competitors is a waste of money.

It results in: Higher costs per click. Lower quality leads. Pissed off competitors who might start bidding on your* name in retaliation (starting a price war where only Google wins).

If you have a massive budget and you’ve already tapped out every other way to get customers, then sure, have a crack at it. But if you’re looking for the fastest way to grow your sales and keep your costs low, stick to the basics.

Focus on the people who are actually looking for what you do, not the people who have already decided to call someone else.

Want to know if your Google Ads are actually making you money? At Local Marketing Group, we help Brisbane businesses stop guessing and start growing. We don't care about "impressions" or "brand awareness"—we care about how many times your phone rings.

Contact us today for a straight-talking review of your digital marketing.