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

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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.

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  • http://www.portentinteractive.com michaelportent

    Interesting stuff. Although, I’ve noticed an increase in the amount of copyright rejections for ad text I’ve been getting back lately (even with words we’ve used before without consequence). Any opinions on that?

  • http://www.pcchero.com Joe

    I think Google (and everyone else) are still very sensitive to branded terms. Heck, we are currently seeking approval from Google for our client to bid on their own name. However, we have other clients that have robust competitor campaigns that don’t currently have any issues. I think it’s a case-by-case process.

  • Simon

    So let’s say I bid on “Volvo C70″ keyword

    and my PPC ad copy goes like this

    volvo c70 replacement parts
    tired of paying high dollars for volvo parts ?
    try our kia, it’s much cheaper !
    http://www.kia.com

    This is a totaly fictional ad but my problem is that I would use their Brand to compare it to another service but this would not make their brand look so good. Would this be ok ?

    Also does the keyword I used “volvo c70″ has to be on the first page of the landing page or it can be on the second page. I think cramping all of “volvo’s” car series on my main page could be considered spamming ?

  • http://www.pcchero.com Joe

    Hi Simon:

    If you offer Volvo replacement parts, and you send this ad (hypothetically) to a page within your site that offers Volvo replacement parts, then your ad should pass editorial guidelines. You are not making a direct comparison to another provider of Volvo parts, this ad just asks the user if they are tired of paying high prices for parts. You don’t say, “Our parts are cheaper than Brand X’s parts.” That would be questionable. For quality score and relevancy sake, if you are advertising for specific products, you should send your PPC ads directly to that product’s page. This will help with quality score and overall conversions as users will not have to search your site for they are looking for; you’ll take them straight there.
    Thanks for reading!

  • http://www.pcchero.com Joe

    Michael:
    If you’ve long-standing keywords are being rejected, more specifically the ad text, then something may have changed that is out of your control. Your competitor may have filed a complaint with Google; Google may have simply tightened their editorial guideline on this keyword. Do you use the keyword in your ad text? If that is getting you ad rejected, you may try no using the trademarked term directly within the text. You want to maintain a level relevancy but this might get your ad through the editorial review.

  • http://www.portentinteractive.com michaelportent

    Actually, the problem I’ve been having is a little less shady than bidding on a competitor’s keywords. I have a client that had reviews in a certain popular magazine (I won’t name names here…), but my ads were simply:

    {KeyWord: My Product}
    As seen in Popular Magazine.
    25% Off Sale – Buy Now Online!
    http://www.myproduct.com

    I found out that the magazine was held by a larger conglomerate that has been making complaints to Google recently. I’m in the process of trying to get them (the company, not Google) to let me use it anyway.

    Moral of the story, be a little more careful about Trademark terms, even in circumstances where your particular usage might not trigger a complaint. New Trademarks are being added all the time.

  • http://www.pcchero.com Joe

    Michael. Yes, that is a complicated keyword, ad text tale. Good thoughts and thank you for your comments.

  • http://siliconloop.blogspot.com silicon loop

    Good tips. Hopefully all the legal issues will get sorted out eventually and it won’t be a gray area any longer.

  • Pingback: Trademarks and Online Marketing: What's Acceptable? at iElectrify.com

  • http://itdependsontheoffer amy

    Would you please clarify what “NOT permitted to bid on nor utilize trademarked brand name keywords such as Acai Patch” mean?

    I understand that I am not allowed Acai Patch in keywords, but can I used “Acai Patch” in a description line, in an adtext?

    thanks,
    amy

  • http://www.pcchero.com Joe

    Hello Amy:
    If you can’t bid on the term, then you won’t be able to use the term within your ad text. Especially if the competitor’s name is copyrighted/trademarked. If you are selling this item, then you may need specific permission from the company to use their name in your ads.