Competing against big brands in search engine marketing

Competing against a bigger brand in search engine marketing (SEM) can be tough – they get all the name recognition and the top ad placements, and in many cases, users may have already established purchasing accounts through them (looking at you, Amazon). The good news is, there are actions you can take to compete with the big guys and still turn a profit.

Break Down Bidding with Localization

Even if your business is currently targeted to the entire country (or world), there are likely going to be specific geos where you may do better than others.  Additionally, many bigger brands are likely to use one single bid for an entire targeted area, and you can use this to your advantage.
Using the dimensions tab in AdWords, you can easily pull a geo report at varying levels of granularity. For this example, we’ll look at major metros:

Can you spot the outlier?
New York is coming in at almost double the cost per action (CPA) of the top two metros (Los Angeles and San Francisco). In this case, you may want to either exclude New York entirely or move it to its own campaign in order to better target bids to an area with more competition (cost per click (CPCs) are nearly double that of San Francisco CPCs).
The prime advantage offered here is, while it’s great for you take this approach at such a granular level, many larger brands advertising across a huge number of verticals may not see a big enough impact on localization to warrant adding that layer of complexity.
What this means is you can pick and choose priority geos where it makes sense to bid higher and actually beat out the bigger brands.

http://smallbiztrends.com/2013/02/search-engine-marketing-small-business-big-brands-compete.html