Brand owners beware of Google

You’re a marketing director at a big clothing company – let’s call it GreatShop – and you’ve just launched a multimillion pound ad campaign with a catchy slogan. All the research tells you that consumers love the marketing; they are flooding online after seeing the TV spots to check out the new diffusion range of dresses by a hip new designer.

But then you notice something odd.

Your online visits are dropping off. Your search marketing team tell you that someone is outbidding you on your own name, GreatShop. Competitor ads from your biggest rival, HappyStore, are coming up top in the sponsored links on Google when people look for information about your latest campaign.

Your name itself never appears in these ads, and the ad text does not mention your brand. But HappyStore is still able to bid on the term “Greatshop” and push its own sponsored link up the rankings as a result of people keen to know more about your brand or its products.

This is only a fictional scenario, but it could come true for UK retailers. Google announced last week that it has changed its terms in the UK and Ireland to allow bidding on trademarked terms from May this year. The brand name itself cannot appear in other advertisers’ ad texts, but these companies can still utilise the popularity of your products or reputation for their search campaign.

The move brings Google’s policy into line with the US, where bidding on trademarked terms has been acceptable for the past four years. There have already been a number of court cases in the US, with firms suing others over the use of their trademarks in search campaigns. These have so far been decided on individual merit, rather than offering any general ruling on the situation.

Google claims it has changed its terms because: “We want advertisers to use keywords that are most relevant to their business and our users’ interests.

It adds that it wants its users to have “the most relevant information” and is “giving users the opportunity to determine which ads they find most relevant.”

But, being slightly more cynical, you might also note that the change in policy is likely to be equally relevant for Google revenues. More companies are now able to bid on trademarked terms, creating more cash for the business.
To explain by use of our fictional scenario, this means that while formerly only GreatShop was able to pay Google to use its own trademarked name, keeping the cost of the term down, now any company can do so. The cost of buying brand keywords is likely to go up as a result, which means a healthy bank balance for the search engine.
This issue is one that could only arise in the online world. The idea of search is one that does not really apply in the physical world. If you want to find out about GreatShop’s new clothes offline, you have to go into the store on the high street. You can’t imagine a group of people standing outside shouting, “Come and see GreatShop’s new clothes here”, and then directing people into another store entirely – which is pretty much the offline equivalent of bidding on someone else’s trademark.

This brings up another crucial point; it isn’t just brands like GreatShop that are affected by these changes. It is also arguable that consumers could get confused. If you are searching for the term “red dress” or “hippie chic”, you don’t necessarily have any one brand in mind. But if you specifically aim for “GreatShop red dress”, then how is this different from that stranger on the high street agreeing that they have such a dress and then ushering you into another shop that doesn’t, in fact, stock that product?

Trademarks are there for a reason – they protect both brands and consumers. In their most basic form, they are guides that help people work out what they are buying and check it is precisely what they want.

In some areas, trademark law seems to be getting tougher. These days, products often have to come from a specific country or region of origin to have the right to call themselves a certain name. But it appears that in the world of online advertising, there is still significant room for manoeuvre.

So what does this move by Google mean overall for brands? It’s not entirely clear yet. Some smaller companies could benefit from the change by piggy-backing on the reputation of others to introduce their products and services to consumers.

But for the marketing director at GreatShop and other large companies, it seems likely that more money will be spent trying to protect their brands. In an already tough advertising climate, this isn’t good news. Unless, of course, you work for Google.