# Brand bidding: how this silent threat steals your results? URL: https://branddi.com/en/blog/o-que-e-brand-bidding Categoria: Brand Bidding Publicado: 2024-10-01 Imagine carefully building a campaign from scratch and investing time and resources into it only to not get the expected result. This is the reality of many companies that suffer from brand bidding, a silent threat that harms the performance of digital campaigns. This is because the consequences of this unfair action go far beyond a brand's advertising inefficiency: they also affect its reputation, its relationship with the consumer and even its growth. Do you want to understand more about what it is, how it works and, even more importantly, how to protect your business against brand bidding? Come with Branddi and check out everything in this exclusive article on the topic! What is brand bidding? ‍ ‍ In a nutshell, we can say that brand bidding is the unauthorized use of a particular brand's keywords in advertisements and paid campaigns. However, this is a very primary analysis of this action. In more depth, we can say that brand bidding is an action of unfair competition. That is, it aims to divert legitimate traffic from a brand by using the name or terms related to it to attract clicks on paid ads. In other words, the 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 actually happen? How it works brand bidding? As we said above, brand bidding is nothing more than an “ad hijacking”, which occurs when a competitor or affiliate buys a keyword relating to your business. This purchase, made through Google Ads auctions or other advertising platforms, allows the advertiser to use their terms. Thus, it not only “steals” a piece of your credibility but also competes with your brand for a positioning that already belonged to your company. This happens mainly in searches where the user searches directly for the name of your brand or for specific products and services associated with it. Confused? Let's illustrate with an example: imagine a fictional company called "GreenFlow", which sells sustainable solutions for water treatment. Focusing 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." class="w-richtext-figure-type-image w-richtext-align-center" data-rt-type="image" data-rt-align="center">Image explaining how brand bidding works‍ The real threat behind brand bidding According to research carried out by Opinion Box, in conjunction with Buscar ID, 45% of consumers say that the first action taken after deciding to make a purchase is to search for the product or service on Google. strategies capable of raising your position in this search engine and, as a consequence, increasing your visibility to the public. However, not everyone values fair competition at these times. And this is where brand bidding presents itself as a threat that causes a series of negative consequences for the main brand. Continue reading and understand how this practice can threaten your brand's position in the market! Increased advertising costs If your company has spent more than 0.30 cents per institutional terms, there is a high probability 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 fight for the top of the SERPs (Search Engine Results Pages) for their own search terms, they are forced to increase their bids to guarantee the desired visibility. In other words, the brand suffers from CPC inflation and still has its ROI compromised. Reduction in organic and paid traffic A survey carried out by the Statista platform revealed that 53.3% of all web traffic comes from organic results, while 27% comes from links sponsored. We know that this statistic may surprise some brands that invest in just one format, believing that this is enough to generate the desired results. ‍ ‍ This, however, as we have seen, is not true. After all, what builds a solid brand is the delicate balance between paid and organic actions. And it is this carelessness in taking care of your own traffic that encourages the greed of competitors and unfair partners practicing brand bidding. This is because, when these malicious people manage to capture the user's attention before they access your website, this harms your company's position in search results. This problem, ultimately, becomes a cyclical issue: increased competition for branded keywords increases the CPC, forcing the company to spend more to secure its position in ads. At the same time, the loss of organic traffic causes the website to suffer from reduced relevance in search engines, losing position in the SERP and impacting fewer and fewer audiences. Reputation damage Building a relationship of loyalty and trust with your audience is one of the main objectives 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 such as brand bidding can undermine trust in a silent and harmful way. After all, when your consumer clicks on a paid ad, they truly believe they are being redirected to your official website. When this doesn't happen and they end up being taken to a low-quality competitor's page, frustration is inevitable. That is, your consumer will feel deceived and will lose trust in your business due to the action of third parties. But that's not all: the confusion generated by brand bidding can create an image of irregularity or incompetence in relation to the company, harming your purchasing journey and, therefore, your results. Changes in metrics As we talked about in the topics above, Changing metrics such as cost and rate per click (CTR and TCR), in addition to conversion rates and traffic quality as a whole, are one of 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 aware of sudden changes in CPC and ROI: they may be showing signs that a competitor or partner is competing for keywords related to your brand. ‍ ‍ Loss of narrative Finally, a direct consequence of brand bidding that is often forgotten: the loss of control of the brand's narrative. This is because when competitors or affiliates use your brand's keywords, they have the opportunity to convey their own messages before the consumer comes into contact with your official narrative. Thus affecting not only the credibility, but also the identity of your business. Brand bidding today: famous cases ‍ For some years now, digital protection has become a central topic for companies that understand that the digital and physical universes are not separate. This is because both drive each other and interact closely, together building a solid image for the brand in question. Therefore, it is natural that topics such as unfair competition and brand bidding have made the news, especially when driven by famous cases. The main one, between Magazine Luiza and Via group, responsible for brands such as Casas Bahia and Ponto Frio. However, this was not the only one: the dispute between Temu and Shein and the mattress brands Emma and Zissou also highlights how unfair competition has grown in the sphere legal. But how does legislation really cover cases like these? And, mainly, what are the legal impacts of brand bidding cases? Check out more in the topic below! The use of sponsored links for Brazilian legislation Legally, unfair competition is framed within Law no. 9,279/96, mainly article 195, which regulates rights and obligations relating to industrial property. And 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 this year, in 2024, the Third Panel of the Superior Court of Justice vetoed the purchase and sale of keywords to competitors. Furthermore, it also condemned Google itself, holding it responsible for cases of unfair competition in sponsored links (Read more