Imagine you own a restaurant and one day, a couple of big guys in nice suits come through your front door. One of the men introduces himself:

“Good evening. My name is Gino, and this my colleague, Salvatore. We’re helping local businesses with their marketing and wanted to see if we could help you.”

“Nice to meet you,” you reply. “Of course I’m always interested in getting new customers. Tell me more about what you do and how much it costs.”

“Gladly,” says Gino. “It’s really quite simple. When someone approaches your restaurant, we open the door for them. For every person that comes in, we charge you $1.”

You stop, perplexed. “Wait. That’s not marketing. Those people are already coming to my restaurant. Why would I pay you for my existing customers?”

“I understand how you might be confused about our generous offer,” says Gino, lighting a fine cigar. “Perhaps I can explain it further. You see, if you don’t want to use our marketing services, that’s fine. But I happen to know that many of your competitors are very interested in working with us. And if you don’t pay us $1 for each customer, Salvatore here is going to stand in front of your door and, how shall we say, strongly encourage diners to go to another restaurant. I might add that those other restaurants pay us $3 every time we get one of your customers to go to their restaurant, so we are giving you a very good deal by charging you just $1.”

Does this scenario sound familiar to you? It should – especially if you work in SEM for a large brand.

Every year, brands spend millions buying their own brand terms on search engines. The reason businesses buy their brand terms is simple: failure to purchase them will likely result in competitors showing up at the top of the paid search results when a user types in your brand, an obviously untenable situation.

competitor-brand-ads

The Asics brand page is nowhere to be found - but you can buy some New Balance if you feel like it!

This isn’t advertising – it’s coercion. Advertising implies a conscious decision to promote your company; coercion occurs when you feel that you have no choice but to spend money to protect your company.

This article suggests some alternatives to the current state of affairs and, more importantly, gives you some easy ways to reduce the cost of brand protection on the search engines.

The Utopian Solution: Ban Brand Keyword Buying

The SEM revolution has disrupted advertising as we know it (and I mean that in a good way). Much credit goes to both the GoTo/Overture/YSM team and the AdWords team for developing tools, advertising opportunities, and reporting that make SEM the most transparent, ROI-positive advertising medium on the planet (sorry, social media mavens).

Let’s be clear: I, and most people reading this, owe my entire career to the smart folks at Google and Yahoo/MSN. Generally speaking, when they succeed, I succeed.

But since my success is tied to the search engines’ success, we all need to acknowledge that search engines are no longer the only kids on the block. Most marketers today understand that successful online programs require a “wide tail” approach, with investments in SEM, display, social, mobile, SEO, and perhaps video. SEM is still growing in terms of revenue, but it’s shrinking as a percentage of online media budgets.

Indeed, eMarketer projects that SEM will account for 18.4% of online marketing spend in 2012 but only 6.6% in 2015. In other words, advertisers have a lot more options today, which makes this the perfect time for the very smart folks (pandering intended) at Google and Yahoo/MSN to start thinking about ways to further increase the value of SEM to advertisers.

To me, the solution here is simple: search engines should prohibit bidding on all brand terms. I’m talking about everything from company brands, like “Travelocity” and “One Kings Lane,” to product brands, like “iTunes” and “Xbox” (of course, the brand would have the right to proactively allow specific resellers to buy terms if they wanted to).

Initially, this would cost the search engines millions a year in lost revenue (I have seen many six-figure monthly accounts where 50% or more of the cost goes to brand keywords), but ethically, it’s the right thing to do, and it would hopefully lead to greater long-term investment in SEM.

For the record, as the leader of an SEM agency, eliminating bidding on brand terms would cost me a lot of revenue as well, but I’m willing to fall on the financial sword in the name of what is right for my clients.

Before you call me a Pollyanna for suggesting search engines pursue a strategy that goes against their financial interests, I’m not the first person to argue this point.

Consider this observation:

“Furthermore, advertising income often provides an incentive to provide poor quality search results. For example, we noticed that a major search engine would not return a large airline’s homepage when the airline’s name was given as a query. It so happened that the airline had placed an expensive ad, linked to the query that was its name. A better search engine would not have required this ad, and possibly resulted in the loss of the revenue from the airline to the search engine.” [Emphasis added.]

That was written way back in 1998 by two graduate students at Stanford named Sergey Brin and Lawrence Page in their paper, The Anatomy of a Large-Scale Hypertextual Web Search Engine. And yes, I recognize that this particular example refers to the intersection between paid and organic results, but the message applies equally well to buying paid search brand terms: search engines should not require brands to pay when someone searches for their brand!

The search engines make the argument that showing competitors’ ads on brand terms increases choice and relevancy for consumers and thus makes for a “better” search engine. This may be true, and here’s my suggestion: continue to allow advertisers to buy their competitors’ brand terms, but give the trademark owner free ads on their own brand terms.

In other words, if you can demonstrate that you own a brand, any brand keyword you buy is treated as if it is an organic click, and you aren’t charged. And of course, since your Quality Score should be astronomically higher than your competitors, you should always end up in first position.

How To Protect Your Brand For Less

So do I believe that Google (or MSN/Yahoo) is going to suddenly embrace a brand-friendly/revenue-negative policy? Of course not; though if MSN wanted to forever endear themselves to SEMs and get a lot of great publicity, this would be an awesome way to do so!

As such, assuming that the future of SEM will continue to involve a lot of forced brand keyword buying, here are a few ways to reduce your brand term costs:

    1. Talk to your competitors. If you are on reasonably good terms with your competitors, consider calling them up and asking them for a “brand term truce.” In other words, you won’t buy their brand keywords if they won’t buy yours. If you can get even a few of your competitors to agree to this arrangement, you’ll both save money on brand terms.
    2. Send cease and desist letters. If you aren’t on good terms with competitors, send in the lawyers. Sending competitors a threatening letter from an attorney may scare them enough to stay away from your brand terms.
    3. Send a trademark complaint to the search engines. While the search engines won’t block competitors from buying your keywords, if you send them a complaint letter, they will prevent your competitors from using your brand term in their ad text. At a minimum, this should reduce their click through rate (CTR) and increase their costs! Here’s Google’s form and AdCenter’s form.
    4. Police your affiliates and resellers. Create terms and conditions for your affiliates and resellers that prevent them from buying your brand terms (or misspellings thereof) or risk ending their relationship with you.
    5. Use ad extensions. Ad extensions take up more space and push your competitors further down the page. They also increase CTR and reduce CPCs. In the example below, the brand added enough ad sitelinks to swallow up the entire paid top section. (There are a number of extensions you can use in AdWords; take a gander at the full list.)

ad-extensions

Smart use of ad extensions got this brand a solo spot on top.

  1. Last but not least, ad text. Your CTR should already be awesome on your brand terms, but testing ad text can result in even higher CTR and lower CPCs.

Ultimately, even if you apply all of these techniques religiously, you’re still likely to end up paying a hefty sum for your brand keywords (and the bigger your brand, the more you are going to pay).

It’s worth noting that there is a glimmer of hope on the horizon: a lawsuit is currently making its way through the court system alleging that Google is guilty of trademark infringement for allowing competitors to buy trademarked keywords and use trademark terms in ad text.

This suit, originally filed by Rosetta Stone, now has support from numerous large brands, including Ford, GEICO, the NFL, United Airlines, 1-800 CONTACTS, and Rolls Royce, among others (and, worth noting, Yahoo and eBay have filed briefs in support of Google). If Rosetta Stone wins this case, competitive brand keyword buying could end forever.

Until that moment comes, however, aggressively manage your brand terms as best you can and keep a large portion of your SEM budget available to protect your trademark. That’s an offer that you unfortunately can’t refuse!

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: SEM | Enterprise SEM

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About The Author: is founder and CEO of 3Q Digital (formerly PPC Associates), a position he has held since the Company's inception in 2008. Prior to 3Q Digital, he held senior marketing roles at several Internet companies, including Rentals.com (2000-2001), FindLaw (2001-2004), Adteractive (2004-2006), and Mercantila (2007-2008). David currently serves on advisory boards for several companies, including Marin Software, MediaBoost, Mediacause, and a stealth travel start-up.

Connect with the author via: Email | Twitter | Google+ | LinkedIn



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  • http://www.facebook.com/bigalittlea Aaron Levy

    Forgive me if I missed the point here, but I pretty vehemently disagree that defense is the only reason for bidding on brand terms..

    I’m a MAJOR advocate of bidding on brand for a few reasons. Gathering data on promo tests and value propositions to test in other more expensive avenues (ad copy, sitelinks). Figuring out how customers are looking for your brand (are they spelling it wrong? are they comparing you to others?) Do you have a hot new product that you want to push? Want to send people to a targeted, direct-sale focused landing page or just let them go where Google wants? Having search engines disable bidding on brands would open an entire new can of worms as well – namely what exactly is a brand term. I’m gonna start a company called Red Shoes. HA! nobody else can bid on “red shoes” now because it’s my company, sorry Charlie! 

  • http://www.facebook.com/nooooorm Norm Miller

    I had similar thoughts Aaron. Also, as you know, Google rewards more relevant advertisers in the form of Quality Score. We bid $20 on our brand name, and our actual cost per click is less then a dollar. Our cost per click on our URL is pennies.

    Quality score does work to level the field. If I bid on a competitor’s name, I am going to pay more and appear lower, and if I can’t get conversions, I will stop bidding on it.

    I favor letting the market figure it out. Quality Score to encourage relevance is enough.

  • http://twitter.com/jamielow Jamie Low

    @David Rodnitzky this is one of the best POV articles I’ve read on the subject. Great thinking, good use of storytelling, an accurate assessment of the state of the paid search industry, a powerful indictment, and clear action steps for all parties to consider.

    Every search engine staffer, search marketer, business owner and government agency that has a stake in this issue should read this article.   It’s past time for this conversation to be brought back to the international spotlight. (Google and Bing would be wise to revisit this before a widespread international legal money grab by every government on the planet; the Fed will be more than happy to line it’s pockets if they ever wake up to this type of widespread coercion.)

    Google lost their way on this issue; when they changed their policy to a “it’s not for us to police” policy, they simultaneously solved for both their legal liability and a massive engineering headache.  The burden was then singularly shifted to the marketplace, artificially inflating advertising costs for the vast majority of businesses.  Of course, the mechanics behind determining which keyword phrases are truly trademarked or “branded” will be undoubtedly complicated to implement.  But this is too important to completely ignore; and if anybody has the resources and the responsibility to deal with this problem, it’s Google .  They benefit way too much from this type of predatory gaming of the system.

    @facebook-6100974:disqus  and @facebook-1160044726:disqus , how would you respond to the suggestion that David outlined in the article?:

    “… continue to allow advertisers to buy their competitors’ brand terms, but give the trademark owner free ads on their own brand terms.”

    Wouldn’t that help solve for your concerns?  If we could continue to not just bid on our trademarked terms, but control that ad space, as advertisers wouldn’t we benefit even more?

  • http://www.facebook.com/bigalittlea Aaron Levy

    It still begs the question of exactly what a brand term is. Say my company is Search Engine Land, does the query “search engine watch vs. search engine land” cound for me or SEW?? It’s an interesting idea but i think there’s just too much legal grey area for it to be enforcable.

    Pizza Hut can advertise on a billboard on the road next to a Dominos. Dominos would still have to pay for that billboard, even though their store and sign are already there.  Why should search be any different? 

  • http://twitter.com/incrediblehelp Jaan Kanellis

    In another situation do you recommend buying branded terms if you don’t have competitors at all?  Wouldn’t this just cannibalize the organic traffic or create more for the site?

  • http://twitter.com/ppcbuyers Leslie Drechsler

    I’m with Aaron and Norm, I absolutely advise clients to own their trademarks. I believe there are countless case studies that also show increased revenue when organic and paid search results display for trademarks vs just organic.

  • http://twitter.com/rodnitzky David Rodnitzky

    A few comments:

    1. I think its pretty easy to define brands. Indeed, Google allows you to send in a trademark complaint that prevents competitors from using your trademark in ad text, so how hard would it be to extend this process to keywords as well?

    2. To Jaan’s point: would you continue to buy your brand terms if there were no other advertisers buying your brand? If not, then you are being coerced into purchasing.

  • maritam

    Interesting article, but aren’t we past the age of stereotyping? You used an Italian name to illustrate a scumbag gangster, common…

  • http://twitter.com/rodnitzky David Rodnitzky

    Yes, this occurred to me when writing the article, but The Mafia is almost entirely Italian . . . http://en.wikipedia.org/wiki/Sicilian_Mafia

  • http://www.cbil360.com/ James Smith

    Nice tips to protect our site brand keywords…

  • http://www.gg2.net/ Garavi Gujarat

    Interesting article with great explanation, liked your tips, thanks for share.

  • http://www.easterneye.eu/ Eastern Eye

    i will implement this tips for my new website, thanks for sharing, liked your article.

  • http://www.seomasterexpert.com SEO

    BRANDING is the most important terms for our business. I learn here few points to cover more strategic “protect” Brand keywords.

  • http://www.saleslogik.com/ SEMRescue

    I don’t think this topic will ever be resolved because of the systemic issue in our culture that  allows people to instinctively look at ways to “game” any system we set up. In this case the best offense is a good defense.

    However, there is a larger issue here related to the purchasing of branded keywords and that is the abuse by agencies who do not track conversions properly and very often attribute  conversions that result from a branded search to “lead generation” that was manufactured by their stellar PPC acumen.

    This is not an issue for Nike, Travelocity or large brands but for small business owners who unsuspectingly pay agencies $500 or $1000 per month for a PPC campaign and receive 30 or 40 calls thinking those calls were leads generated by the agency when, in fact, they were all derived from the use of the businesses trade name.

    If you are a small business I recommend that you insist on transparent tracking to separate conversions that derive from branded search versus ones that derive from money keywords. We use a product from Mongoose Metrics (no affiliation or benefit to our company just a really good product) that tracks back calls to keywords. Online conversions are, of course, easier to track back with simple tools such as Google analytics.

    In terms of defensive advertising of your brand, it’s a necessary evil in the post print era of advertising and simply needs to be part of the budget for any online campaign.

  • http://www.rimmkaufman.com/ George Michie

    DRod, I enjoyed the piece, and loved the metaphor.  I do agree with Aaron that there are difficulties here in what is and is not a brand term.  One of our clients is Envelops.com.  Should “Envelops” count as a brand term?  More to the point, in many many cases, manufacturers WANT their distributors to get the traffic.  You can’t buy a Ford on Ford.com.  They might benefit from having folks see ads from the dealerships nearest them in addition to their own.  May need to be a distinction between “competitors” and “distributors”.

    I like the solution of creating an Authentic Brand premium placement at the top of the page, free of charge (or perhaps simply having no ads in “promoted position” above the organic listings?)  There will still be difficulties defining a brand term.  I’m pretty sure that trademark law doesn’t actually prevent you from using a competitor’s brand name, as long as it is clear to the average person that you are not pretending to be that brand.  I think Pepsi could run an ad on the KW Coke that reads “See how Pepsi beat Coke in a head to head blind taste test at Pepsi.com”.  That may be a violation of Google’s policy, but the ad itself doesn’t violate TM law (a subtle distinction that we may find the TM violation being in Serving that ad when someone searches for Coke.  The ad text is fine on a billboard or TV ad, but not in response to someone searching out Coke?  I guess that’s what the suit is about.)

  • Pat Grady

    “For the record, as the leader of an SEM agency, eliminating bidding on brand terms would cost me a lot of revenue as well, but I’m willing to fall on the financial sword in the name of what is right for my clients.”
    Why would it cost you a lot of revenue?

  • ClaytonEsperanza

    my roomate’s mother-in-law makes $71 every hour on the internet. She has been out of work for 8 months but last month her pay check was $20635 just working on the internet for a few hours. Read more on this site CashLazy.&#99om  

  • http://www.brickmarketing.com/ Nick Stamoulis

    When a competitor bids on one of my branded keywords I guess it’s kind of a compliment. They think my brand is strong enough to send them viable traffic and leads. But at the same time, why aren’t they using that money to build their own brand? Why piggyback on mine? I think it’s bad form to bid on branded keywords, but maybe in other industries it works.

  • http://twitter.com/rodnitzky David Rodnitzky

    I agree SEMRescue. If possible, I recommend setting up an attribution system that goes beyond last click and – where a brand keyword is involved – give 100% of the credit to any sources that were upstream of that keyword.

  • http://twitter.com/rodnitzky David Rodnitzky

    Hey George, thanks for the comment.  A few points. First, if Envelops.com (who is getting some good inbound links from this discussion!) has spent time and money building a brand around a misspelling of “envelope” then I would say that is in fact a brand term, just as a misspelling of 1 followed by 100 zeros (Googol) is a brand term today, or a domain about the largest river in the world – Amazon – is a brand term.

    Second, regarding your point about Ford – if they want to allow authorized resellers to buy their keywords, I would say they should have the right to do so and selectively approve such resellers. They can already do that now for ad text, so why not extend that right to their keywords.

    Finally, your point about Coke vs. Pepsi is a good way, and I do think this is the essence of the Rosetta Stone lawsuit. There are extremes of online advertising where I’m sure everyone agrees that use of a trademark is either permitted or not permitted. One extreme would be the one you mentioned – simply using a trademark term in text online, perhaps in a banner ad on a content site, in a situation where there is no chance of brand confusion. At the other extreme, imagine an ISP creating an ad unit that redirects visitors to Coke.com to Pepsi.com for 15 seconds prior to going to the Coke Web site. I’m sure that this would not be allowed, because it is capitalizing on the brand of Coke and potentially misleading consumers. When a user types in Coke on a search engine and gets an ad that says “Try the #1 soft drink in America”, clicks on it, and is redirected to Pepsi, is that an unfair capitalization on Coke’s brand, and is it potentially misleading? I think possibly, and it seems to me that determining whether this is more like a banner ad or an ISP redirect is the issue.

    BTW, full disclosure: I have not thoroughly researched trademark law on this point, I’m just hypothesizing!

  • http://twitter.com/rodnitzky David Rodnitzky

    We charge clients on a percentage of spend basis. So if a client spends 50% of their money on brand terms and 50% on non-brand, and brand terms suddenly become free, I lose 50% of my revenue.

  • http://twitter.com/rodnitzky David Rodnitzky

    Nick, I think competitors bid on brand terms because its a pretty good way to steal away customers from their competitors. I agree it is bad form in theory, but there’s a “weakest link” situation at play – if people are doing it to you, and you don’t do it to them, you risk losing customers without gaining them back through the same tactic.

  • http://www.saleslogik.com/ SEMRescue

    Interesting but I have not found branded keywords worth buying or tracking that much either. I like to see how many conversions come from Branded so the branding guys can get some credit but not for our own as an SEM.

    We use a system that attributes all branded keywords to the clients “Branding Strategy” and find it usually comes out around 30% to 50%. For smaller local business buying their own Brand the value score we give for that is almost zero. Same with Organic. We don’t see ourselves as search marketing partners as having much influence over that so we let the brand folks claim the credit.

    Big national brands and retail type clients, sure, it has a lot more value but we don’t have many of those.

  • http://twitter.com/eLLCOperAgreeme eLLCOperAgreement

    Branding can be good and bad, if people are just looking for a form or agreement it does not help. For example the website http://powerofattorneyform.com ranks high mostly due to the amount of Exact Match Searches while http://legalzoom.com, which is a much more reputable company, ranks much worse just because of EMS.

 

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