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Keyword Poaching pays Off

Competitive poaching refers to the practice of bidding on ads for a competitor’s search terms, in order to poach customers searching for that brand. It’s a common tactic in the world of digital ads — but is it effective? The author shares results from the first-ever empirical study of this practice, which found that poaching…

Competitive Poaching is the practice of bidding for search terms for competitors in order to seize customers looking for that brand. This tactic is quite common in digital advertising. But, is it really effective? This article shares the results of an empirical study that examined this practice. It found that poaching works well for high-end brands but can backfire on lower-end and mass-market offerings. The study revealed that users clicked more on ads that targeted high-end brands when they were poached by customers searching for them, while users clicked less on ads targeting low-end and mass market targets. The author points out that clickthrough rates are only one indicator and that there could be other ways inwhich a poaching campaign can be either harmful or beneficial. These findings can be used to help marketers bring science to digital advertising and optimize campaigns for customers and products.

Have any of you ever tried to search online for a product or brand only to find an advertisement for a competitor appearing above the results? It’s likely that it’s competitive Poaching , an advertising strategy where a brand hijacks the ad keywords of a competitor to capture their customers. Although it may seem sneaky, this tactic is not against the rules. It’s more common that you might think. But is poaching really worth it?

To explore this question, I worked with coauthors Jing Gong and Sunil Wattal to conduct the first-ever empirical study of competitive poaching. We ran field experiments in collaboration with a high-ranking business school and a car dealership in which we targeted ads for the school and dealership at users searching for competing organizations, totaling more than 1,000 online ads over the course of a three-month period. This dataset allowed us to identify which brands and ads are most likely to be successful in poaching and when they’re more likely to fail.

We tested several types of ads and several types of competitors (poachees) in order to determine which was most effective. Our ads used a variety of competitors, from low-end brands in mass-market to high-end brands. The ads also used one of the following four approaches:

  1. Stressing quality (i.e., taglines such as “Top Ranked School. World-Class Faculty.”)
  2. Stressing distinguishing characteristics (i.e., “Extreme Versatility. Great Driver Assistance.”)
  3. Stressing intangible benefits (i.e., “Discover Opportunities. Leave Transformed.”)
  4. A control edition without any particular messaging (i.e. “Obtain a graduate degree from XYZ University. Request Information. Contact Us Today.”)

So what did we find? It’s important to note, first, that our ad sometimes appeared in search results by itself, but in others it was alongside the competitor’s ad depending on whether it had bid on its brand name.

In cases where the ad was not visible, we found that highlighting quality was more effective in poaching high-quality brands’ search traffic. These ads had clickthrough rates greater than twice those of control ads. However, highlighting distinguishing characteristics was more effective when poaching lower end brands. This could be because high-end brands are more likely to be concerned about quality. Therefore, they will be more open to ads that emphasize that aspect of a product. Conversely, those looking for lower-end brands may be more inclined to pay attention to specific features.

This is where things got really interesting. In these cases, the type of ad no longer made any difference, and all that mattered was the status of th

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