The trademark lift on GoogleAdwords UK – Is Google getting greedy(er)?

As of 5th May 2008 Google is lifting the trademark rule for Google AdWords (UK) which prevents advertiser from bidding on branded keywords that are protected by trademark. Enter the brand bidding war and Affiliate heaven!

What was the trademark restriction? Basically if you submitted a Google trademark complain procedure you could prevent your competitor (or anyone else) to bid for your brand name in PPC ads served in the UK and Ireland. The benefit? You would be the only one in the paid listings appearing for your brand term, which means it was very cheap to drive traffic for your protected brand term to your website.

What happens now? Basically, ANYONE can now bid for your brand name. They still can’t use your brand name in their ad text, but they can bid to their hearts content for any brand terms. Which means the CPC (Cost Per Click) for any brand terms are likely to sky rocket! Who will benefit? Yep that’s right, Google! And of course the Affiliates (the guys that steal your traffic and then sells it back to you!).

Google claims that these changes will give the users ‘greater options’ and ‘help them make informed decisions’. HA! Whatever happened to relevancy? Is this really profitable in the long run? Is Google shooting themselves in the foot on this one?

It’s well known that nearly 73% of search engine users prefer (and trusts) Organic results more than Paid search engine results. With the PPC results filling up with even more irrelevant results, will this increase the user’s preference to organic? In my opinion this is a very risky time for Google to be changing anything that can fuck up the quality of their paid search listings.

It’s quite contradicting of Google to put such an emphasis on Quality Score, for them then to say, hey but you can bid on whatever you want, even someone elses brand term, we’ll take your money!

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10 Responses to “The trademark lift on GoogleAdwords UK – Is Google getting greedy(er)?”

  1. Julie Joyce says:

    This is freaky stuff. Considering one of my clients ONLY bids on brand keywords and is quite successful doing so, I really do hate to see them doing this. Twats.

  2. rishil says:

    I think its a major shame that they have done this – however the fact that Yahoo won a case recenlt gave a greenlight to this change. Plus, they are backing it up with the fact that this policy has been in play in the US for over 3 years.

    I think brand will have to play smarter and cleverer – it was quite funny to hear that some UK affiliate co.s had champagne parties because of this announcement – because now brands will have to work closer with affiliates to try and keep competitors off search results.

  3. Matt Ridout says:

    Hi Lisa, this topic has been on the horizon for our clients for quite some time now and when the “fan is started up” it will be a worrying time for some of them.

    For medium – large brands I doubt there will be any significant impact , they should have an affiliate base under their own PPC listings which are controlled in a way where they can never outbid your own listing – a force field if you will!

    Therefor for any new competitor to try and outbid on a brand term will be costly to say the least, and unless the landing pages are carved by the big man himself, the conversions wouldn’t provide a good RIO.

    Google are talking out of their ass about this though, they want more usual.

  4. Mr Happy says:

    Hmmm. google trying to make cash, whatever next. TBH It’s been a great opportunity to grow accounts. Clients with running aff. programs are developing startegies that use their affiliates to start ring fencing the brand space in PPC on their behalf. By offering increased commissions to ‘trusted partners’ it should be possible to make it a ‘protected’ space. May be more costly than we can do at present with trademarking but at least it protects their brands.

  5. exile282 says:

    Hasn’t this been the case with Google for quite a while if not forever in the U.S.? I figure that they simply consider it as bringing their European business practice into line.

  6. Affiliates don’t just “steal your traffic and sell it back to you”.
    They pre-sell your services or product, building it up to make a sale more likely.
    And beyond that, many people bidding for “Branding” purposes have miserable conversion rates. Affiliates put their own cash on the line, fulfill the “branding” segment(if they’re even allowed to), and make it 100% sure the company will return a profit(which most branding ventures don’t).
    In some cases, I will agree that it’s a negative. But not so all the time.

  7. rishil says:

    @shady Dude brand traffic is the Highest Value, Highest Conversion, Cheapest Traffic you can get on Google UK PPC. I normally agree with everything you say – on this one, I differ.

    When affiliates bid on brand, they are in effect taking your share of cheap traffic – for example in one of my projects brand converts at £10 per conversion (direct google PPC), while affiliates convert at £50 per conversion (based on their commission).

    So although I can use the affiliates to help me protect my brand space, I will pay 5 times as much to be able to do so. If I spend £200K a year normally, this equates to atleast a 3x increment, if not exactly the 5x based on simple estimates.

  8. rishil says:

    Just to back up the issue, Hitwise have done an excellent study of the possible effect of the loss of trademark protection

  9. @Excile282: Yes this has been the case in the US since 2004. But that doesn’t mean its right, also the UK search market is slightly different to the US. I think it will have a bigger impact here now being 4 years later.

    @Rishil: Good find on the Hitwise data, I like it! Have given you a Sphinn as well ;) I totally agree Rishil, the brand traffic from Google PPC is imperative, and this will make costs rocket!!

    @SlightlyshadySEO: Appologise for the slight “Affiliate bashing” I did. I know its alot more to Affiliate than “stealing your traffic” but in this instance the Affiliate market will really win and in essence earn loads of money on “brands” that really, belongs to the brands.

  10. @Rishil: Normally you’re 100% right on that point. But it’s not that simple. There’s many brands that are damaged, and have sketchy reputations. Affiliates up the conversions rates off that stuff quite well. Also take a look at how much people are bidding for “home security alarms”. That’s about branding. Last I checked, some don’t even offer service in many areas they’re bidding in.
    @Lisad: No problem :-) But yeah, I can see your point. I think it’s going to be a split. Some companies can benefit, some can get hurt.

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