Summary of change to AdWords UK policy

The change is explained in this official Google post.

The key text is:

"Beginning in May 2008, keywords that were disabled as a result of a trademark complaint and investigation will no longer be restricted in the UK and Ireland..

There will not be future reviews of trademark bidding:

"we will no longer review a term corresponding to the trademarked term as a keyword trigger.

However, we will continue to perform a limited courtesy investigation of complaints regarding ad text purported to be in violation of a trademark".

What it means in practice

Currently if you search in the UK for HSBC - the well-known bank brand trademark, you won't see any paid ads (unless there are some which have slipped through Google's large mesh net).

With the new policy, potentially, competitors of HSBC such as Halifax and Barclays could advertise on that pure brand-term keyword to "hijack" a proportion of the brand traffic, although the quality score from higher clickthrough rate on the recognised brand will mean that this is usually top.

The impact of this change is indicated by research by Hitwise comparing brand bidding in the UK and US. The figure top right shows that there is more cannibalisation of brand searches in the US where brand-bidding is currently permitted.

But advertisers will lose and Google will win since bid inflation WILL occur for brand terms and clickthrough rates for the brand as competitors and affiliates hijack the terms. So it means lower volumes and higher CTRs.

In the short-term, affiliates will be the big winners, since they will react quicker than most large brands, but in the longer term they may suffer as affiliate brand-bidding policies are tightened up further and commissions selectively reduced for own-brand terms or perhaps increased for competitor brand terms.

For an analysis of the implications from a leading lawyer in digital media industry with particular expertise in intellectual property, read what Alex Chapman, Partner with Campbell Hooper says

• E-consultancy has interviewed three SEM agency specialists for their take on the implications - Andrew Girdwoods comments are particularly relevant since Bigmouth do a lot of work in the States where this policy has been in force for some time.

Why has Google done this

• The obvious one - more AdWords revenue is inevitable due to increased competition.
• The Alex Chapman post points out that a recent UK court case may have given them some precedent. It will all depend whether it is thought the trademark is physically used or "passing off has occurred"
• Yahoo! Search Marketing and Microsoft adCenter already permit pure brand term bidding (and the situation also holds for Google in the US).

What actions do I need to take?

1. Call crisis meeting (s)!

Many larger brands will have already called a crisis meeting with their PPC agency and or affiliate agency or internal team to determine policy. If you have one team / agency managing everything it will be easier!

2. Consult a lawyer

It's unlikely agencies will have the right knowledge of the law or to act on your behalf, so it's going to cost, and specialist lawyers are going to be in high demand.

According to Alex Chapman you may still be breaking trademark law eventhough Google is permitting it - it's putting the onus onto the advertisers and courts. He says: "It seems that it is still trade mark infringement or passing off to use a third party's trade mark (registered or unregistered) as an adword but only by the person purchasing the ad words - not the person (such as Google) selling it."

3. Define ethical policy and attitude to risk / talk to competitors

It's a balance of the two. What some would consider to be an unethical company may already be bidding on competitor brand names if the competitor hasn't previously complained. Such companies will seek to do more brand bidding I suspect.

But some will be more ethical. In a commendable attempt to avoid competition, I Want One of Those has adopted a more ethical stance where it has publicly state it will not bid on competitors terms through setting up a competitors campaign which negative matches against competitor brand names (is this anti-competitive - is picking up the phone uncompetitive?).

4. Re-define brand bidding strategy

You do have one, don't you? Remember that for many brands a majority of referring searches are brand related.

5. Re-define affiliate bidding policy

Many larger brands already exclude affiliates from bidding on pure-brand search terms, and a minority? use them instead to protect hybrid brand + Product terms, e.g. Dell laptops.

We will probably see more use of affiliates to protect merchants pure brand terms, but at lower commissions. There will also be more use of affiliates to target competitor pure-brand terms. Others such as IWOOT will make it policy that affiliates can't bid on competitor terms.

As discussed, you will have to decide whether or not to bid on competitor brand terms or may have to revisit your account set-up.

6. Review creative

Depending on your strategies for 4 and 5 you will almost certainly want to revise your creative to maximise clicks through to site for your brand searches. A common approach (but more common is the US than UK) is to add "Official Site" to the ad headline.

You may also want to refine the description to make your proposition more compelling.

7. Track and review hourly during May

The capability to isolate and aggregate different forms of brand bidding in web analytics and Hitwise will be important, so make sure your reports do this.