Imagine carefully building a campaign from scratch and investing time and resources into it—only to fall short of the expected results. This is the reality for many companies suffering from brand bidding, a silent threat that undermines the performance of digital campaigns.
That’s because the consequences of this unfair practice go far beyond poor advertising efficiency. They also impact your brand’s reputation, your relationship with consumers, and even your business growth.
Want to understand more about what it is, how it works, and—most importantly—how to shield your business against brand bidding? Join Branddi and check out everything in this exclusive article on the topic!
What is Brand Bidding?
In a few words, brand bidding can be described as the unauthorized use of a specific brand’s keywords in paid ads and campaigns. However, this is a very basic analysis of the action.
More in-depth, brand bidding is an act of unfair competition. That is, its goal is to divert legitimate traffic from a brand by using its name or related terms to attract clicks on paid ads.
In other words, this practice—carried out by direct competitors or even malicious partners—has the power to compromise your organic results and the CPC of legitimate ads.
But how does this really happen?
How Does Brand Bidding Work?
As mentioned above, brand bidding is nothing more than “ad hijacking,” which happens when a competitor or affiliate purchases keywords related to your business.
This purchase, made through auctions on Google Ads or other advertising platforms, allows the advertiser to use your terms. This way, they not only “steal” part of your credibility but also compete with your brand for a position that originally belonged to your company. This mainly occurs in searches where the user looks directly for your brand name or specific products and services associated with it.
Confused? Let’s illustrate with an example: imagine a fictional company called "GreenFlow," which sells sustainable water treatment solutions. Focused on increasing visibility, you invest in campaigns to make "GreenFlow" a reference in the sector and attract customers interested in your solutions, right?
However, what your team has been noticing is the opposite: loss of traffic, low conversions, increased CPC, and increasingly dissatisfied customers. The reason: a competing company called "EchoCleaning Pro" is buying keywords like "GreenFlow water treatment" or "GreenFlow solutions."
So, when a potential customer searches directly for "GreenFlow," it is the EchoCleaning Pro ad that appears at the top, diverting the click to their website.
The Real Threat Behind Brand Bidding
According to research conducted by Opinion Box in partnership with Buscar ID, 45% of consumers say that the first action they take after deciding to make a purchase is to search for the product or service on Google.
For this reason, it is natural for brands to seek strategies that can boost their position in this search engine and, as a consequence, increase their visibility to the public. However, not everyone values fair competition in these moments.
This is where brand bidding emerges as a threat that causes a series of negative consequences for the main brand.
Keep reading to understand how this practice can jeopardize your brand’s position in the market!
Increase in Advertising Costs
If your company has been spending more than $0.30 on branded terms, there is a high likelihood that you are facing brand bidding. This is because this is one of the main metrics affected by this form of unfair competition.
After all, when companies lose the battle for the top spot on the SERPs (Search Engine Results Pages) for their own search terms, they are forced to increase their bids to secure the desired visibility.
In other words, the brand suffers from inflated CPC and its ROI is compromised.
Reduction in Organic and Paid Traffic
A survey conducted by the Statista platform revealed that 53.3% of all web traffic comes from organic results, while 27% comes from paid links.
We know that this statistic may surprise some brands that invest in only one format, believing that it is enough to generate the desired results.
However, as we have seen, this is not true. After all, what builds a strong brand is the delicate balance between paid and organic actions. It is this neglect in managing your own traffic that fuels the greed of unscrupulous competitors and partners who engage in brand bidding.
This is because when these bad actors manage to capture the user’s attention before they access your site, it harms your company’s position in search results.
Ultimately, this problem becomes a cyclical issue: increased competition for branded keywords raises the CPC, forcing the company to spend more to secure its ad position. At the same time, the loss of organic traffic causes the site to suffer a decline in relevance on search engines, losing position on the SERP and reaching fewer and fewer people.
Damage to Reputation
Building a relationship of loyalty and trust with your audience is one of the main goals of any company. After all, this is what brings sustainability and predictability, allowing the brand to invest in future strategies with greater peace of mind.
However, practices like brand bidding can quietly and harmfully undermine that trust. When your consumer clicks on a paid ad, they truly believe they are being redirected to your official website.
When that doesn’t happen and they end up on a low-quality competitor’s page, frustration is inevitable. That is, your consumer will feel deceived and lose trust in your business because of the actions of third parties.
But that’s not all: the confusion caused by brand bidding can create an image of irregularity or incompetence regarding the company, damaging the customer journey and, therefore, your results.
Changes in Metrics
As mentioned in the sections above, changes in metrics such as cost and click-through rate (CTR and TCR), as well as conversion rates and overall traffic quality, are among the main negative effects of brand bidding.
However, it is essential to understand that these metrics are not just abstract numbers. After all, they directly reflect the health of your brand’s digital presence and the effectiveness of your marketing investments. In other words, ignoring these metrics means ignoring clear signs that something is wrong.
Be alert to sudden changes in CPC and ROI: they may indicate that a competitor or partner is bidding on keywords related to your brand.
Loss of Narrative
Finally, a direct consequence of brand bidding that is often overlooked: the loss of control over the brand’s narrative. This happens because when competitors or affiliates use your brand’s keywords, they have the opportunity to convey their own messages before the consumer encounters your official narrative.
This can mean that the target audience receives incomplete, distorted, or inconsistent information with the values and goals of the main company. Affecting not only the credibility but also the identity of your business.
Brand Bidding Today: Famous Cases
In recent years, digital protection has become a central topic for companies that understand that the digital and physical worlds are inseparable. This is because both realms drive and interact closely with each other, jointly building a solid image for the brand in question.
Therefore, it is natural that issues such as unfair competition and brand bidding have made headlines, especially when highlighted by famous cases.
The most notable of these involves Magazine Luiza and the Via group, responsible for brands like Casas Bahia and Ponto Frio. However, this is not the only one: the dispute between Temu and Shein, as well as the mattress brands Emma and Zissou, also demonstrate how unfair competition has been growing within the legal sphere.
But how does the legislation actually cover cases like these? And, more importantly, what are the legal impacts of brand bidding cases? Check out the next section!
The Use of Sponsored Links in Brazilian Legislation
Legally, unfair competition is framed within Law No. 9,279/96, mainly Article 195, which regulates rights and obligations related to industrial property. This makes it today the main legal instrument to combat unfair competition that misleads consumers and aims to divert customers from the company that owns the brand.
Proof of this is that, still in 2024, the Third Chamber of the Superior Court of Justice banned the purchase and sale of keywords for competitors. Furthermore, it also held Google itself accountable for cases of unfair competition involving sponsored links (Read more by clicking here).
Even so, much of these decisions are recent, as the jurisprudence on the subject is still being developed, with divergent rulings in some cases. And it is precisely this technical complexity of the digital environment that makes identifying and proving these practices difficult.
For this reason, investing in the digital protection of your brand terms beforehand is not only useful to ensure a solid online presence but also to guarantee that your business does not discover brand bidding cases too late and suffer losses in traffic conversions and costly litigation.
Come with Branddi and learn how to shield your business against brand bidding in four steps!
4 steps to protect your brand against brand bidding
Now that you understand the impact of brand bidding, it’s time to take action to protect your brand and ensure that your campaign results are not compromised.Below, you’ll find four essential steps to safeguard your brand’s image and your results!
Register your brand
In Brazil, 2.2 million new companies were registered in the first six months of 2024. This significant number represents a 7.1% increase compared to the same period in 2023. But is this registration alone enough to keep your brand safe?The answer is no, but don’t worry! Although it alone may not fully protect your business across the entire digital environment, brand registration is indeed an important step. After all, it serves as irrefutable proof that you are the legitimate owner of your company.In other words, it creates a legal barrier against third parties who wish to use your brand without authorization throughout the national territory.
Stay alert to your affiliate program
Most brands invest in monitoring their competitors but overlook the importance of keeping an eye on their partners’ actions. And that’s where the main challenges come from—unexpected places.Therefore, remember: a well-structured affiliate program can be a powerful growth engine for a brand. However, lack of monitoring can turn it into a source of problems, especially regarding brand bidding.
Take technical measures
Many entrepreneurs believe that protecting their brand is difficult and time-consuming, but that’s not always true. After all, some simple technical measures can make all the difference.A good example is the use of watermarks on your images, which not only make it harder for third parties to use your content without authorization but also reinforce your authority in every publication. Tools like Canva or Photoshop make this very easy, allowing you to customize the size, opacity, and style of the watermark.Another essential tip is the implementation of SSL certificates. More than just a technical detail, they ensure that all information transmitted on your site is encrypted and protected against interception.Acquiring and installing an SSL certificate is very simple: many hosting providers even offer the process as part of their package.
Rely on a specialized partner for in-depth monitoring
Here at Branddi, we always say that constant monitoring of your brand in the digital environment is like having a continuous radar over the needs, opportunities, and obstacles of your business. After all, it can detect problems early and identify which competitors or partners are engaging in brand bidding.However, at these times, it is necessary to go beyond superficial monitoring and find these sly unfair users where they hide.We understand that not all companies have the resources or workforce needed to manage this project, and that’s when a partner like Branddi steps in.Here, we combine artificial intelligence and human expertise to offer an exclusive tool capable of scanning Google (Google Search and Google Shopping), simulating different locations, times, and devices. This way, we can identify unfair practices like brand bidding and send out extrajudicial notifications.
This way, we achieve an amicable resolution in over 90% of cases, avoiding exhausting litigation and still reducing your CPC by 70%.
Talk to the Branddi team and learn how to prevent your brand from losing organic clicks and being held accountable for third-party actions!
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