Brand names receive a higher CTR on search results than a generic equivalent (think ‘Kleenex’ instead of ‘facial tissue’) and so it is a common practice to input a brand’s name (even if that name is not the advertiser in question) as a keyword when buying ads. The FTC does have some rules governing mentioning a competitor by name in an ad, but the keyword buying method does not broach those rules. There are however, some best practices to follow when engaging in this method. Ted Ives is an SEO expert and he has some suggestions for the social media agency that engages in this practice.
There is some fuzziness about what qualifies as a trademark. Google has an unwritten policy that it does not investigate the issue as long as the potential trademark is not used in the copy of the ad or if there is not a complaint filed. Despite the haziness it is a common practice to keyword a brand name, a competitor’s product name, a website and model numbers of a competitor. One error often seen though is that brands do not double-check their keywords for alternate meanings. This double entendre will create impressions that have zero chance of being clicked on, a waste of resources.
Another issue that is significant is the use of a brand’s own trademarked information within a keyword. This does sometimes happen, but it is cautioned against because it eats away at the organic potential for returns in a search engine. If the competition is tight between, then it may be worth the hit to organic listings. If the brand in question is not well known or is in a saturated market (restaurants), then it is probably worthwhile as long as the other necessary keywords are covered.
It is a complex and interesting field about managing search ads and the social media agency needs to be aware of those complexities. While the Ted Ives essay is not quite comprehensive it is a fantastic starting place with links to other more comprehensive guidebooks.