The recent change in Google's trademark enforcement policy has caused a stir in affiliate marketing circles. Google's justification seems to be that if a user is looking for a given company then they are most likely to go to that company whatever competing adverts are shown for a particular search. As long as an advert does not explicitly infringe a third party's trademark rights, Google see no need to unilaterally deny that advert. They also see no need to act as some kind of unpaid internet trademark police. The big question, of course, is what impact this change is likely to have on both trademark owners and advertisers of all sizes. The immediate change is the sudden appearance of a plethora of new ads by competitor companies bidding on searches involving third party brand names. The incentive here is easy to see.
Imagine a budget holiday company, looking to take market share from their biggest rival. Why not pay to get your advert shown when someone is searching explicitly for the rival? After all, a customer in the market for a budget holiday of the type you and your rival supply might be just as interested in your offering as that of the company they are actually searching for.
Or imagine a vacuum manufacturer suddenly free to bid on the word 'Dyson'. A trademarked term, yes. A customer interested in vacuum cleaners? Probably. Worth a few pennies in advertising? Of course. Annoying to Dyson and Co? Absolutely.
The next obvious change (and of course the real reason Google have implemented this) is the upward impact on CPC prices. If you and only you are allowed to bid on your trademarked brand name, then the ad that gets shown is your ad, and it will only cost you a penny. If your main rivals are now also free to bid on your trademarked term, they will naturally bid up the cost of advertising on that term in order to take the coveted top spot away from you.
Merchants who have previously implemented brand restrictions are now faced with something of a dilema. Do they leave their T&Cs unchanged try to force affiliates to 'keep off the grass', or do they try and let affiliates absorb some of the new extra cost associated with protecting the brand against rival merchant bidding by relaxing the conditions and reactivating brand bidding?
Before this change, the incentives to restrict keyword bidding were obvious - the merchant had an easy way of controlling the cost of the most effective advertising they were likely to see - their own campaign on their own brand name. Where a retailer was also running an offline or PR campaign which naturally drove increased searches for their brand via search engines, this was massively important. The alternative of allowing affiliates to bid on brand terms effectively meant paying out again via commissions, an increase in marketing costs almost impossible to justify.
You need to see who exactly is bidding on your brand name. If it is affiliates of competitor programs then perhaps you should explore opening a dialogue with your competitor counterparts. Putting into place revised Terms & Conditions which state affiliates are not allowed to bid on competitor brand terms using your trademark and affiliate tracking URLS associated with that trademark. In return for which your competitors would also implement the same T&C's. While this may help reduce some advertisers I doubt it will clear the pitch.
In the past I have tended to operate 2 policies that allow brand bidding via an affiliate program. The first is that the affiliate has to increase coverage for your brand via an agreed list of more generic terms, offsetting the return from so called 'easy' brand term sales against increasing coverage on more challenging ROI terms. The other option is to discuss with your network the option of allowing affiliates to bid on your brand name but reducing the commissions for those terms.
At the end of the day the decision is down to each individual Merchant. I would advise all companies operating an affiliate program to republish their Terms & Conditions so affiliates are reminded of their particular position on Paid Search activities.
If you have an open policy, then you need to ensure that Affiliates who are bidding on your brand name or misspellings, or who are using your brand name in their ad copy, funnel that traffic direct to your URL. Remember that it's almost always better to try and sort out problems with brand bidding affiliates in an amicable way.
Finally, if you have implemented brand bidding restrictions you need to make it crystal clear which terms affiliates cannot bid on.
Each merchant will be different, some will attract more attention from competitors than others. Whatever policy you decide to implement do not be bullied into opening up brand bidding if you still feel it is not right for your company. You should be undertaking regular checks on the search engines at various points during the day and week and should review your position on brand bidding as required.
Helen Deehan (nee Porter)
Tigerstep Consultancy
