New AdWords Trademark Policy: Who Wins? (Guestpost)

Tue 16 June 2009 10:30, Editors

So today we kick of our unique series of guestposts on Searchcowboys! Here to open the series is Virginia Nussey. The first time I met Virginia Nussey was in New York. She was doing some great work on live blogging SES New York. We then had a great talk on her podcast SEM Synergy. She is one of the rising stars in the industry. She is US-based and will give us the US-angle on the new AdWords Trademark policy.

Virginia Nussey blogs about SEO, PPC, social media marketing, branding and online reputation management for search marketing company Bruce Clay, Inc. She also coordinates and co-hosts the weekly WebmasterRadio.fm podcast with Bruce and the gang, SEM Synergy.

New AdWords Trademark Policy: Who Wins?

Google recently announced that, come June 4, the company would no longer investigate trademark infringement claims based on AdWords trademark bidding in 200 countries across the world. Previously in effect in the U.S., Canada, the UK and Ireland, European countries now subject to this policy include: Belarus, Bosnia and Herzegovina, Croatia, Faroe Islands, Macedonia, Moldova, Montenegro, San Marino, Serbia, Turkey, Turkmenistan, Ukraine and the Vatican. Not making the list are the Netherlands, Germany and Spain, three European countries that many SearchCowboys readers call home.

Regardless of which set of rules you're playing with, there are benefits and drawbacks of any policy. But what's the sum effect here? Would the majority of advertisers across the world be better off if allowed to bid on trademarked terms? Or would most advertisers be happy to keep things the way they were? Here are some pros and cons for advertisers working under Google's newly expanded trademark bidding guidelines.

The Pros

Google does not allow advertisers to include trademark terms within ad copy. So, the ability to have a competing ad display for brand-related queries may not have an effect on which ad a searcher clicks. Competition from ads that don't include the search term (in this case, the trademarked term) is neutralized since searchers are unlikely to click.
When a user searches for a trademarked term, for example, a brand name, odds are she has a good idea what she's looking for. An ad from a competitor may get a click from a researcher, but it's not as likely to get a conversion from an intent shopper.
Small- and medium-sized brands get a chance to increase their visibility. Whether or not their ads receive more clicks, name recognition for those smaller brands is likely to improve.
Research has shown that a synergistic effect occurs when a brand name appears in both paid and organic search results. Brands who see competitors bidding on trademarked terms will still receive the benefits of such synergy as competitors' ads lacking those terms will not diminish the effect.

The Cons

The most immediate result of the new policy will be a rise in bid costs. Advertisers may be forced to divert their paid search budgets into better performing channels.
If companies bid on competitors' trademarks, whatever benefit they receive may be negated by losses on their own trademark terms. The ROI on trademark bidding may end up as a wash.
If results for trademark-related searches are seen by searchers as irrelevant since they lack the queried terms, users may start believing that sponsored listings aren't worth their time.
With fewer users clicking on what are deemed irrelevant ads, an advertiser's quality score could go down.

Google's policy allowing trademark bidding has successfully worked in the U.S. and UK for some time. Of course, every advertiser's situation is different and brings with it unique challenges and advantages. If you're not subject to Google's new advertising policy, would you want to be? What pros and cons do you see as a result of the change? Can you make the new rules work for you?

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Comments (12)

- Barry Adams
- [website]
I think it will work in the market's favour. For example I now work for an insurance comparison site in the UK. We don't have multimillion dollar TV budgets so we need to be smart with how we advertise to generate enough traffic for our site.

Bidding on trademarked terms such as insurance brands as well as on the names of competing comparison sites allows us to gain visibility and brand recognition without having to resort to ridiculously expensive TV ads.

Di 16 jun 2009, 11:02
- Rich
- [website]
It is also very beneficial if you are advertising a competitive offer within a competitive industry. I handle PPC ads for bingo sites in the UK and the users and extremely responsive to the various promotions available.

Furthermore, users searching for a brand are generally in purchase mode as they are seeking the specific product. If they accidentally stumble upon a better deal for a near identical product, they are, at least in my experience, likely to go for it. In turn, this pro-competitive move by Google has made users more reflexive to various deals and promotions in both their clicking and converting behavior. As if the current economic climate hasn't done so enough already.

Di 16 jun 2009, 12:53
- Virginia
- [website]
Barry and Rich, thanks for adding your personal experience to the discussion. It sounds like you're both in favor of bidding on trademarks. Hopefully you live in the right place for that! It sounds like the majority of advertisers would stand to benefit from this policy.

Di 16 jun 2009, 18:01
- Magne Uppman
- [website]
The question "Would the majority of advertisers across the world be better off if allowed to bid on trademarked terms?" is in my opinion an irrelevant question, or at least a question with an obvious answer. The majority will always consist of the smaller advertisers within each industry, and as they are challengers they will be better off and therefore in favour of these policies. But it doesn't matter if the majority of advertisers are better off with these new policies. The big brands, even if they are fewer, do still have the right to be protected from trademark infringements.

Because that is what this is about. The smaller advertisers are now able to exploit the well-known advertiser's trademarks/brands. Luckily most European countries have marketing laws that prevents this from being allowed.

Wo 17 jun 2009, 10:05
- Barry Adams
- [website]
@Magne, there's a bit of a grey area here. Advertising in PPC on your competitor's brand names, is that 'trademark infringement'?

I find that many things that are called 'infringement', be it of copyright, trademarks, or intellectual property, are nothing more than innovation- and competition-stifling methods to protect big corporations' marketshare.

When in doubt I'm in favour of erring on the side of fair use. The big companies are more than capable of withstanding a little competitive use of their brands, while smaller companies need that edge in order to be able to compete at all.

If 'trademark infringement' is being pursued strictly, as big corporate lobbyists insist, what we end up with is an handful of gigantic companies cornering the entire market and litigating every small startup out of business with silly trademarks and patents such as buttons that say 'click me' and circle-shaped menu navigation schemes.

Wo 17 jun 2009, 10:22
- Magne Uppman
- [website]
Well, yes, in my opinion advertising PPC on your competitor's brand name is trademark infringement. A trademark is by law protected from unauthorized use of that trademark, and isn't that what Google allows advertisers to do? They use competitor's trademarks in order for their ads to show.

What if your telephone company asked everyone asking for your phonenumber if they rather would speak to one of your competitors. Would you be happy with that? Does it really make sense that Google allows this?

I think everyone deserves the right to have their brands protected. You can't say that big companies shouldn't only because they are big. They are big because they have invested time, resources and money in product development and advertising, and hence their brands have become popular. Why should a two week old company be allowed to exploit this popular company's brand? Because it's fair business? It's the opposite of fair business, if you ask me.

Wo 17 jun 2009, 11:19
- Barry Adams
- [website]
"They are big because they have invested time, resources and money in product development and advertising"

So, for example, Microsoft using their size to dominate and destroy smaller companies to gain more marketshare and increase their near-monopoly on the PC market is fair business? Is that good for the consumer?

Once companies attain a certain size they often stop being innovative and start behaving badly. From Microsoft and Apple to Shell and Google, there are countless examples of companies who have grown so large that they start favouring restrictive technologies and bullying business tactics and put product innovation and fair competition on a lower tier.

These companies have so much money and so many lawyers that they can, and often do, sue smaller competitors out of business with patent infringement suits and trademark disputes. This is not competition - this is market domination. And that is always bad for the consumer.

So yes, I believe we should give some leeway here and allow rival companies some space. Besides, advertising on your competitor's brand name (without using that name in your ad or your website) isn't trademark infringement, is it?

Wo 17 jun 2009, 11:30
- Magne Uppman
- [website]
@Barry: Yes, I do think advertising on your competitor's brand name is trademark infringement. You buy their brand name, which is supposed to be protected.

I don't think that everything big companies do are good. But things are not either black or white, usually they are something in between. We can agree that big companies from time to time do bad things in order to remain strong, but that doesn't mean that we should break laws to challenge them. Because there are marketing laws that we still need to comply to. Why else do you think Google didn't liberalize their guidelines in most of the European countries. They would if they could.

And yes, I do also like competition. As long as it's legal and ethical. I don't think trademark infringement is neither legal nor ethical.

But I'm not sure that we'll agree on this subject. Let's just say it's difficult and that we agreed to disagree...:)

Wo 17 jun 2009, 13:05
- Barry Adams
- [website]
@Magne, you don't 'buy' their brand name, you are merely given the chance to show your ad when someone searches for that brand name. You're not stealing anything away from the company who owns the brand name - they should rank #1 in the organic results for that name anyway (if they don't they have bigger problems).

Another example: do you think it is wrong for TV advertisements to mention competing brands in, for example, a Pepsi vs Coke blind taste comparison? Following your logic this would be 'trademark infringement' as well. Yet this is allowed in the US and the UK and in my opinion it encourages competition and benefits consumers.

Wo 17 jun 2009, 13:13
- Magne Uppman
- [website]
@Barry You do buy clicks after bidding on their brand names. Right? Of course you're stealing something away from the brand owner. You can't expect everybody to get back to click on an organic listing or paid ad for the brand owner after having clicked on a competing ad, hence you steal something away.

As for your TV-example, I don't think you can compare that to buying others' brands in search engines. Price comparisons are legal in most countries as far as I know.

Wo 17 jun 2009, 14:10
- Virginia
- [website]
Magne and Barry, you've hit on some provocative arguments! Because big brands make up the minority, I see why most advertisers would stand to gain from trademark bidding. But the question of whether or not bidding alone constitutes trademark infringement sure makes for a hot debate! I can certainly see both sides on this one.

Wo 17 jun 2009, 17:59
- ireland seo agency
- [website]
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Do 4 feb 2010, 21:27

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