PPC, Trademark Laws, and Copyright Laws: How to Play Fair and Still Win


This week we are exploring advanced PPC strategies, and bidding on branded keywords is a regularly debated tatic. According to a study conducted by Hitwise, one in seven brand searches do not end up at the searched-for brand’s website. This is an indication of a number of search trends:

  • Bidding on branded keywords, your own as well as those of your competitors, is absolutely necessary.
  • When users search for a specific brand name, six out of seven times they already know what they want and who they want it from.
  • However, when users search on branded terms they are not always committed to that branded term, but they are searching for similar services/products. Therefore, their search begins with a brand term they’re already familiar with but they are actually in the research phase of the buying cycle.

If you are going to employ this strategy, you have to adhere to the proper copyright and trademark laws, as well as the editorial guidelines governed by the search engines. If you play by the rules you can bid on your competitor’s branded keywords and acquire that one-in-seven users who aren’t committed to the brand that started their search.

First, let’s review the basic copyright and trademark laws as they apply to PPC. For this article I am going to focus on bidding on competitor’s brand names. Bidding on competitor’s names is allowed, and this practice was upheld in the decision of Geico vs. Google in 2005. Geico sued Google for allowing competitors to bid on their name and trademark phrases. The court decided that as long as sponsored ads do not confuse the consumer, then this practice is legal. Marjory Stewart, a Milwaukee-based intellectual property and business law attorney, said of the Geico/Google case:

“What looks like a victory for Google after the early part of the decision of the court, may include liability on the finer points of trademark law.” She said. “A company can be held vicariously liable for trademark infringement if it has the right to control someone else downstream or DOES control them and that party infringes on another’s mark. Some of the results in the Geico case involved sites that used the Geico mark without Geico’s permission. That’s a problem.” She said that it is possible for companies like Google and Overture to be held liable for “contributory infringement” if they intentionally induced another company to engage in infringing conduct.

Bidding on a competitor’s name was deemed acceptable; but it was the advertiser’s intentions that were called into question and how they use competitor’s names within their messaging. As long as an ad is not misleading or misrepresenting your competitor, then the ad is legal. Google, Yahoo, MSN and every other search engine have established their own regulations in order to mitigate any association with contributory infringement. This is where comparison marketing comes into play.

Also, let us make the distinction between bidding on a competitor’s name and using their logo. Using a competitor’s logo for any purpose is strictly prohibited. Unless you have written permission to use a company’s logo or symbol, don’t do it.

If you are going to bid on a competitor’s brand terms, then your intentions can not be malicious or misleading. In fact, if you are going to target these terms you need to make sure that your intentions are pure and that you make this crystal clear to the search engines. The only strategy we use when bidding on these kinds of keywords is to make direct comparisons between the searched-for brand and what our client has to offer. Most searchers are looking for the best service, product, and price. If we know that our offering presents an alternative, then we’ll call a searcher’s attention to our ad and let them decide who addresses their needs best.

We believe in playing fair and generating great results, and hopefully you do as well. If you are going to utilize this strategy, make sure that you follow these steps:

  • Bid low on competitors’ names. As stated earlier, six out of seven users have a clear idea of they what are looking for when searching a specific brand name. Your ad should serve as an alternative to the user’s query, and so you shouldn’t bid aggressively, otherwise your ROI will suffer.
  • Write relevant, targeted ad text. Yes, you can bid on competitor’s names but take caution when using it in your ad text. I would highlight the service/product that a user maybe searching for, as opposed to using the your competitor’s name within the ad. Remember, each search engine wants to deliver a quality user experience, and in doing so they want to make sure that users are served the best possible results for their query. Relevancy is their core concern, so it should be yours as well.
  • Directly compare your services/products to your competition on your landing page. Using a competitor’s name in your ad text could get your ad rejected, but you need to mention your competitor on your landing page, otherwise your quality score will suffer. Making a direct comparison to your competitor, and using branded keywords (yours and theirs) in the process, will let the search engines know that your intentions are not malicious.

Bidding on your competitor’s branded terms can be a successful way to draw qualified traffic to your site and generate additional conversions. However, be sure that you adhere to the established laws and editorial guidelines, otherwise you will have wasted your time and negatively affected your quality score with poorly chosen and executed keywords. Remember, with this strategy you are seeking that one-in-seven user who is looking for what you have to offer, they just may not know they want it from you – just yet.