Black Hat PPC

The Blackhatters learned that Google announced today a change in its trademark policy that will be coming into effect on 14th September 2010. 

Google is changing its current trademark policy in the UK, Ireland and Canada so that Google will no longer monitor brand bidding and use of trademarks within ad copies. It is also opening up the branded keyword bidding policy in the rest of Europe that has been in place in the UK and USA for 2 years now. We understand that Google will also allow resellers and affiliates of products to use brand’s trademarked terms without the brand owner’s approval as well as using the ™ symbol in ad copies in the UK. In effect this means that there will be no brand protection for advertisers using Google AdWords in the future by Google as Google states that they will perform a ‘limited investigation’ into trademarked terms for brands in the future. 

To read the updated policy change, please check out Google’s Blog and pay particular attention to its amended policy regarding trademarks in ad copy in the UK, Ireland and Canada.

So what?

This means that the poor old brands who spend time and money promoting their own brands for their brand keywords will now be open to be targeted by resellers and affiliates who then take commission for any purchases made through these keywords.

Brands will undoubtedly lose out as they will surely see their own CPC’s increase on their brand terms as new competition comes in on these keywords. They will also see a drop in the number of purchases of their products on their own websites due to the increase in competition as well as paying increased commissions to affiliates and resellers who stand to gain from this change in Google’s trademark policy.

Affiliates, competitors and resellers of products stand to gain from this change in policy. They will now be free to use brand’s terms in ad copy, which will give them better relevancy, click thru rates and quality score resulting in cheaper CPC’s for brand terms they are bidding on. In regards to affiliates, this could still be policed by the affiliate networks themselves in the terms and conditions for affiliates to join a brand’s affiliate scheme. However, anyone who is part of affiliate marketing knows that affiliate networks policing brand keywords is always a tricky to police as affiliates have ways to target their ads and hide from the affiliate networks. The BlackHatters will be interested to see how Google clamps down on affiliates who do mirror sites or bridging pages for merchants terms in future. We reported a while back on ways to keep under Google’s radar regarding suspensions and slaps of Google AdWords accounts, and this could mean new opportunity for rogue affiliates (see our previous article Attention PPC Affiliates! How to keep under Google’s radar and avoid your Google AdWords account being suspended)

The biggest winners however will be good old Google themselves. This increase in competition on brand terms will mean more revenue for Google through AdWords campaigns as there will be an increase in competition for these keywords. The introduction of Google Related Ads on brand terms back in July already increased competition on brands terms which was controlled by Google has already caused murmurings from brands promoting on Google.

We feel that this is a bold move from Google which will no doubt cause concern for brands spending vast sums on PPC advertising in Google AdWords. Brands will surely be looking hard at the relative ROI they receive from Google in comparison to other marketing channels, but Google can remain confident as the Internet reach continues to grow and they are still positioned as the number one search engine globally.

If brands decide to move away from Google then the resellers will take over the brand keywords and as PPC comes at the end of the buying cycle (for brand terms) then brands will stand to lose out even more. Brands will have to continue to advertise on their own brand terms and will have to suffer the increase costs and lower CTR as a result of the increase in competition.

So what happens next? 

It will be interesting how this plays out in the run up to December and January, the peak times seasonality wise for Retail and Travel industries, where brands could be hit hard due to this change in policy. I imagine that brands will want to invite affiliates back onto their branded terms to minimise the loss on their brand keywords to competitors and reseller where they earn a smaller margin. Brands will need to monitor their brand keywords closely to see the effect of their impression share and share of voice on their brand and brand + generics terms. Brands should ensure that they are bidding on their own brand terms (no longer can they get away with the idea that their natural rankings will pick up the traffic) and try to ensure they have agreements in place with resellers and affiliates regarding bidding on their brand terms. 

The Blackhatters will be monitoring the effect of these changes in policy once introduced in September and will be updating our blog with any news or findings related to this change in Google’s Trademark Policy.

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