MBA1504 Should You Run Competitive Ads?

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Hey O. Welcome to the 100 army honest business lessons every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the Hundred Dollar mba, a complete business training and community online and in today's episode you will learn should you run competitive ads. Believe it or not, with everything going on with COVID 19, online advertising is at an all time low in costs and Facebook ads, Google Ads, you name it. The cost per click or conversion has gone down tremendously. This is why I thought it would be a good time to talk about this topic. Running Competitive Ads Competitive ads are running ads that pin you against your competition. If you ever search for a product on Google, there's a good chance that you saw ads for other products competitive products to that search. For example, if I searched Basecamp, I might see some ads for Trello and Jira and Monday.com all competitors of Basecamp. On Facebook you might see ads targeted to people that follow the competitor of the ad. But more importantly, the ad copy will be competitive saying this is a better solution than Product X. Is this a good idea? Does it work? Is it smart for your brand or will it hurt it? That's what we discuss in today's episode. So let's get into it. Let's get down to business. The concept of running competitive ads is something that's discussed a lot online with businesses. There are some people that are totally okay with it, and there's some people that are not okay with it. In the first camp, they say, hey, the nature of business is competition and there's a right way to do this and there's a wrong way to do this. You don't have to be nasty about it. The second camp says, no, you should run ads only based on the merit of your business or the quality of your product. You shouldn't be running ads that are aggressive and comparing yourself to your competition. That group says, hey, there's no right way to do this. You're always going to be bashing or talking negatively about your competitors, about your competition. So first of all, let's talk about if this strategy actually works. Does it convert you into customers? And then we'll talk about should you or should you not do it? Because if it doesn't work, then there's no reason to even discuss it. So if you do any research online about this, you read any blog posts about competitive ads, if you do any kind of experiments for your own business, you will learn that competitive ads do work. Why? Because most people, when they're shopping for a product or a service, they are doing exactly that. They're shopping around, they're comparing you to other competitors, right? They're looking for alternatives. They want to see what's the best option for them. So you're really going after buyers, people that are doing that are actually highly interested in buying. So already you're targeting a great customer, somebody who actually has their money ready and they're ready to purchase. They just need to make the right decision. If you get in front of that and say, hey, this is why we're better. It's easy for you to convert that customer. So competitive ads do work and they actually work very well. Second, if you're an up and coming business, you're really not mainstream, not well known yet. Running ads based on your competitor's name or keywords allows you to get in front of customers that would not hear about you otherwise. So it gives you some sort of a chance, some sort of exposure, and that definitely does work. So now that we've addressed the fact that, hey, these ads actually do work, should you do them, should you not do them based on brand fit? Morality is the right thing to do. Can you do it right? All that. First of all, I want to say that there's definitely a wrong way to do this. There's definitely a way that you can run competitive ads that are not right. Right. It's gonna hurt your brand. It's going to maybe come off as overly aggressive and it's gonna bite you in the backside eventually. Okay, it may not bite you right away, but over time it will. So I always say that competitive ads are something you should explore or experiment with as long as you make respect your priority. You need to respect your competitors and you need to be respectful in these ads. There's no reason to bash your competition in order to look better. You could definitely compare yourself to your competitors and say, hey, we're a better solution for these reasons. Okay? For these xyz, we do this better. If you're looking for this, then that is what you're looking for. The competitor, not us. If you put respect in the forefront and make sure your ads are educational, you're giving your customers the information to make the right decision for them. You're not going to be the best fit for everybody. But those you are a good fit for. You want to make sure they're making that educated decision saying, yeah, actually your company, your business, your product, your service is better for my needs. So I really believe if you are respectful and is deeply rooted in education. So this means you can run your ads to a blog post or a comparison page that highlights what your competitors do good and do well and what your competitors don't do well. We talked about this in a previous episode. A great example of great comparison posts is webflow. Webflow. If you go to webflow.com, they compare themselves to Squarespace and WordPress. And they do it very respectfully. They do it very well. They actually highlight the good things about their competitors. But then they say, hey, we're good if you want to do this, this and this. So your ads, if they lend itself to education, it actually targets people that are searching for comparison. You are going to come up on top because one, you're not coming off as aggressive and disrespectful. People respect people that are respectful. Number two, you're actually just offering true education, right? True information, allowing them to make the right decision for you and also to self qualify. Maybe they're not right for you. And then they read the blog post and realize, you know what? Great blog post, but this doesn't fulfill my needs. And that's great because that way you don't get somebody that joins you and leaves you creating churn, creating problems and disappointment. Now there are some don'ts I believe you shouldn't do with competitive ads, especially if you're doing search ads like Google. I really think that you should only target certain phrases and not the actual brand name. For example, if I was going to build a alternative to Slack, I would create an ad that would show up whenever somebody searched Alternative to Slack, not just Slack, okay? If I'm running ads for anybody who searches Slack, that's a little bit deceptive because I'm not Slack. They're looking for Slack, right? And I'm ranking higher than them or I'm showing up higher because of the ad, that's not really cool. Those companies work really hard to get their name, their brand to be number one on Google. And for you to just kind of re usurp that because you want to, you know, be a competitor, you know, at least, you know, run the ad for the right phrase. And I believe you shouldn't just use the brand name, you should use a phrase like, you know, alternative, Slack, other options to communicate with my team, Slack, competitors, whatever, okay? Because that's actually the intention of the searcher is trying to find those answers. But if somebody types in Slack on Google, they're actually looking for Slack and for you to jump in there, not really that ethical in my opinion. It's also really not effective. They're not looking for you, they're looking for Slack. Okay? So make sure you don't do that. And that's my personal advice. I also think that whenever you create a competitive ad, you shouldn't just run the ad to your website or your pricing page. It should correlate to a comparison, right? Like I said, a comparison page or some sort of blog post that actually gives them information. Don't just run the ad to your page because it's not going to really convert well, because people are like, hey, alternative to Slack, right? They look and they search that they see your website or they see your ad, they click on it, they just go to your homepage, okay? It doesn't really guide them to show them what makes you different to Slack, what makes you better, what are your unique features? It would be a lot easier for you to convert that customer if you gave them the information directly and you ran the ad for those posts. Now, when it comes to other types of ads other than Google search or any kind of search engine ads, like running an ad or competitive ad on Facebook, this means that you're targeting people that like a certain page of your competitor or interested in your competitor, and you just feed them Ads. I'm not a big fan of this. I think it's worth experimenting if you'd like. As again, same rules, respectful information, educational. But people are not actively searching for those keywords. They're actually looking for a competitor. Okay? You're just giving them, you know, an ad based on the fact that they're using a competitor or like a competitor. Maybe they're in the market, maybe they are already signed up with a competitor. It doesn't mean they want to switch. Switching into another service or product is not easy. So it might be more costly than you think. So I really think this really works a lot better with search ads. The only kind of exception is that if you're in a small market where there's only one or two or three players, where the big player, the big competitor is known and you're coming in and say, hey, did you know there's actually an alternative? People are not even aware there's an alternative that's a little bit different because that, you know, will raise some eyebrows and make people interested. But if you're in a market where people know there's lots of other, you know, competition already, it's not really going to be as effective as you would hope to be. A good example of this back in the day in the 90s is when Nintendo and Sega Genesis were going head to head. Nintendo was a juggernaut in the early 90s and really when you think about home consoles and video games, that's all people knew is Nintendo or they were the biggest name really. Atarius phased out by then, but when Sega Genesis came out, they, they came out really strong with competitive ads and it worked because people didn't know there was maybe something a little bit better, a little bit fun, a little bit edgier than Nintendo when they came out with the Sega Genesis. Again, this is a smaller, less competitive market. There was not a lot of home consoles back then. Most people, if they played video games at home, it was on a Nintendo. So this worked for Genesis because they were in a small market and there was only one, maybe two big players and they were able to become number two and even number one shortly for a brief period of time because of these competitive ads. And of course their product was good. You know, they need to make sure that these products or these ads actually convert into customers and these stay customers, they stay happy. Guys, I got more on today's topic, but before that, let me give love to today's sponsor.

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Just bring your number $30 first month and $25 after with autopay not available. If with Metro or T Mobile in the past to wrap up today's episode. If after today's episode you still feel like you know what? I don't think competitive ads is good for our business or brand. It's not something I feel comfortable with. You don't have to do it. It's okay. There's other ways you can market that are effective. It's just in one of the options. Okay. And I believe that there's a right way to do it and you can do it right. But if you choose not to do it, that's also okay. That's the great thing about being an entrepreneur, about having a business. You get to make the choices. You don't have to do anything that you don't want to. There are other ways for your business to grow. It's only one form of marketing. Thank you so much for listening to the $100 NBA show. If you love it, you hear hit subscribe right now so you don't miss a beat. We publish an episode every single day, Monday through Friday. So if you want to get a fresh new episode automatically, just hit subscribe on whatever you use to listen to podcasts, whether it's Spotify or Stitcher Radio, Apple Podcasts Overcast, Himalaya or on them all. Also, by hitting subscribe, you get access to over 1500 business lessons in our archives. It's the only way to get access to our archives. So hit subscribe right now. Before I go, I want to leave you with this. If you're in a competitive market, it's very difficult for customers to make the right decision. There's a lot of options. So your job is to educate them and make sure they know what they're getting into when they go with you, why you're better, for what reasons, and how you differ from the competition. What they're going to get from you, they can't get from anywhere else. That's your job. You need to make sure you educate your customers because they're shopping around, they're interested. And those shoppers, again, those are great customers. They're shoppers, they're ready to buy. You just got to give them a reason to choose you. Thank you so much for listening to the 100 MBA show. Keep listening, keep subscribing. Remember here every day to support you, to give you new lessons, to give you new ideas to grow and pivot and change and improve your business. Tomorrow we have Q and A Wednesday where we answer a question from one of our listeners. Can't wait for that. I'll see you then. Take care.

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Gas, snacks, tolls. This trip is draining my wallet.

Yeah, but we'll be with family.

You're in a good mood. What's your deal?

What's my deal? I saved at Metro with no activation fees and I got one line of 5G for just $25 per month. Kept the phone I love and a 5 year price guarantee on my top.

Text and data detour to Metro.

Get that more for your money feeling only at Metro by T Mobile.

Just bring your number 31st month and 25 after with autopay not available. If with Metro T Mobile in the past 180 days.