Google Lifts Ban on Trademark Terms for Search Ads

Move Could Increase Keyword Costs for Blue-Chip Brands

By Michael Learmonth

Published: May 14, 2009
Original Post: http://tr.im/lrDr

NEW YORK (AdAge.com) -- Get ready for an influx of brand names in Google keyword ads. The search giant, which until now has prohibited the use of trademarked brand terms in ad text on its search-results page, except when permitted by the brand itself, is now allowing the use of trademarked terms in AdWords copy -- under some circumstances, that is.

The change will mean that a retailer such as Best Buy will be free to use "Sony" or "Apple" in its ad copy and comparison sites such as Edmonds.com will be able to place ads that contain trademarked terms like "Ford Focus," even if they don't have explicit permission.

Google's AdWords system lets advertisers place their ad messages, which carry a 70-character limit, around a user's search results, often seen on top or to the right on a search-results page.

The new policy, scheduled to go into effect June 15, brings Google in line with Yahoo and Microsoft, which have more liberal policies toward the use of trademarked brands in ads that appear on search pages. The goal for Google is to make all those sponsored links less generic and more effective, potentially boosting click-through rates -- and Google's bottom line.

"We do think this will generate higher-quality ads and that more people will click on them," said Terri Chen, senior trademark counsel at Google.

Additional screening

The policy change will require Google to implement another level of screening to its approval process for ad copy and it will give brands fewer options when their trademarked terms are used in ways they don't like. Under the current policy, only entities authorized to use brand names are allowed to submit them in ad copy. With the change, retailers that sell a brand such as Nike will be able to use the brand's name in their ads, as will sellers of components or replacement parts and impartial information and review sites.

Those that won't be able to use brand names include sites that sell counterfeit goods, retailers that primarily sell a competitor's products, advertisers that criticize the trademarked brand and those that do not refer to a landing page with a purchase option.

For example, an organization called Corporate Responsibility International is advertising against the "Coke" keyword for its campaign against plastic water bottles. Under the new policy, it would appear to break two of Google's rules, likely meaning it still wouldn't be able to include "Coke" in its ad copy.

Google will check both the ad itself and the landing page to assure the advertiser is eligible to use the brand before approving ad text.

Losing control

With the change, brands will lose an element of control. And, as more retailers are able to use brand names in their ads, it may create added competition for branded keywords. The change will only apply to searches in the U.S.

"If you're a brand selling products or services directly, your costs are going to go up," predicted Bryan Wiener, CEO of digital agency 360i. "You are going to see increased competition for terms like 'Sony' because retailers with Sony products are going to be bidding on those keywords at a greater rate."

Overall, one could argue that's good for Sony or JetBlue or Starwood Hotels -- or any other brand that relies on third-party resellers for sales. But it could increase costs for their own direct sales due to heightened competition for branded search terms. Google, on the other hand, argues that more specific ads will give consumers more choice. "It will help consumers because it will allow them to see more ads from more resellers," Ms. Chen said.

While it may be a mixed bag for the brands themselves, it's a big win for small stores, big-box retailers and travel sites that will now have much more freedom to market the merchandise on their shelves, virtual and otherwise.

"Aggregators selling hotel rooms will have a greater opportunity to build market share but at the expense of each hotel," Mr. Wiener said.

One potential winner

Rick Culleton, CEO of Discount Electronics in Austin, Texas, thinks it will be a boon for his business. Discount Electronics only sells refurbished parts for Dell Computers, but Mr. Culleton has never been able to use "Dell" in his keyword ads.

"It has caused us to play charades with our customers because we cannot use the words to describe what we're selling," he said. Discount Electronics sells about $15 million in computer parts a year, about half of that online, and Mr. Culleton spends about $500,000 a year on Google ads. But he's planning to boost that outlay under the new policy.

"I think we will spend more on Google because we will get better results and we will be bidding more because these clicks are going to be worth more to everyone," he said. "I think I will see a dramatic increase in new customers."