How To Deal with Competitor Trying to Drain Your Budget?

[bigdealioo]

Situation:

There is a competitor in the ad below me. He likes to increase his bid drastically - just to make me lose money big time! When he does that - he loses money also - but he makes me lose much more because my CTR is much higher than his and he knows that. So when he does that.. he loses X and I lose 10X or whatever.

Solution?

[bazza9]

Hmmm...depends on the situation really. So is he only managing to cost you money? I mean, is that all he gets out of it? He's not making any more money?

Maybe you should approach him directly and see whether you can reach some form of compromise?

[bigdealioo]

What he does is jack up his bid for a short period of time to knock me out. In that short period of time he is not making money, he is losing money but i'm quickly out of my daily budget. after this "hit", he returns his bid to the "normal level" and resumes making money.

[syber]

Why can't you just lower your bid? I don't see how he is forcing you to loose money.

[wrgvt]

It sounds like he's a pretty smart businessman. Either take the spot below him or increase your daily budget. There's nothing unethical or against Google TOS. It obviously works for him and makes him money. You have to adapt to it. Learn from him and see how you can apply it.

I encounter this all the time. An ad running in good position with a high bid and a much smaller CPC suddenly jumps in CPC. Someone just below me cranked up their bid. Depending on the situation, what I usually do is drop my bid until I'm just below him. My CPC drops to where it was, and it's not long before I have the position back.

[RonnieG]

What you describe sounds like you are overbidding most of the time. I prefer to target my bids for an average position of about 1.5 over time. When I find that "sweet spot", my CTR is still good, and my CPC stays pretty stable. As a local business person, I also conserve my daily budget and get it to last longer by scheduling my ads to start to run after noon local time, which allows some of the other Adwords advertisers in my space to spend more their budget early in the day, and also means they need to bid higher if they want to keep up with me later in the day. Since ours is a personal services business, immediate response to leads is often the key to conversion in our vertical, so scheduling as I do also allows me to do other things in the morning, and to allocate my afternoons to immediate lead response.