April 04, 2008 | Friday
Google means business with changing rules on trademark bidding
By Matt Brocklehurst, Head of Marketing in News |PPC |Search Engines |Google |Yahoo
The scrapping by Google of advertisers’ ability to protect their trademark brand names on paid search is not altogether unexpected. It speaks volumes on how as the search market matures, Google, and of course all search engines, need to look at new ways or revise previous policies to maintain margin. Google is a business and is entitled to change its rules of engagement for commercial gain – even if they don’t quite position it like that.
The change is quite simple but is profound. From May 5th any advertiser or their agency will be able to – and boy will they – bid on “trademarked” single words in the UK and Ireland (not the rest of Europe). Previously in the UK bids were allowed on brand names together with other words. Now a competitor, their affiliates or the brand’s own affiliates or outlets can bid on the single brand name. To quote the example brand Google sent Latitude in their memo, in the past other ads could appear if the searched keywords were “ACME credit cards”. Now they could appear on the simple search “ACME”.
This Google policy has been in place in the US and Canada since 2004. The experience there is telling. In Google’s own statement:
“A good proportion of users in the US and Canada have been clicking on competitor ads even when searching against trademarked terms, suggesting that they find the greater number of ads relevant and helpful when researching or making a purchase.”
I’m not sure I agree that the motivation from Google is all about being helpful for the searcher! The motivation is pretty clear. By opening up the paid search area on trademarked terms, CPCs are obviously going to increase. As will Google’s revenue. The fact that the last quarter has generally seen declining clicks and shares prices for Google and the UK is a massive market for Google is surely no coincidence.
It’s also worth thinking about the relationship with natural search. Many brands once they get to the top, or near top spot, in the natural results are not placing paid ads safe in the knowledge that no other ads can appear on this trademarked term. Why pay Google for someone to click on an ad when they would click on your natural listing with no cost implications. Now advertisers will be compelled to place a paid ad to counter rival ads.
Trademark owners still do have a edge. They alone can quote the trademarked name in their ad copy which should give them an advantage and generate higher CTRs which will in turn further improve their quality score. They will therefore probably benefit from being able to get the best positions at a lower price then competitors. However there is no room for complacency as these ads will be competing against competitors and their affiliates undercutting with special offers etc. The need to manage your affiliate network with a rod of iron is now also more important then ever.
So all in all more costs, more time and more headaches for advertisers so don’t be surprised if you see a legal action. Whether they’ll win is another thing – after all a recent case on this issue against Yahoo was unsuccessful – but were it to happen it’s not great news for the Google brand. That, if you think about it, is quite fitting really.
Comments
There are no comments for this entry yet. Use the form below to add yours.