Google's recent decision to change its AdWords policy in the UK and allow advertisers to bid for trademarked keywords has ruffled more than a few feathers among marketers.
We asked three search agencies to comment on the new rules, and the possible consequences for brands and affiliates.
None seem in a rush to rule out the possibility that firms may launch legal action against Big G.
When the new rules come in, will a significant number of brands be forced to incur losses on brand name clicks - even despite any efforts they make to raise conversion rates?
Paul Doleman, CTO, and Head of Paid Search, iCrossing : It will be ever more important for companies to make the most cost-effective use of the traffic that they are driving.
They must concentrate on improving conversion rates through refining and improving user journeys, making calls to action both prominent and relevant, and removing any impediments to a successfully converting campaign.
Gavin Ailes, Deputy Managing Director, The Search Works: CPCs on brand terms that formerly enjoyed trademark protection will inevitably rise but relevancy, CTR and the other factors that go to make up quality score will all go towards mitigating this rise for brands.
Worst hit will be brands in competitive markets who do not bid on their brand term and instead rely on the natural listing to drive acquisition.
On the other hand, the aggregator market and retailers selling a large number of big name brands may well benefit from the changes. We imagine that some industries will police themselves using gentlemen’s agreements, and this may also mitigate losses.
Andrew Girdwood, Head of Search, bigmouthmedia: A significant number of brands will forfeit the cheap traffic that trademark-protected bids could once bring. There is unlikely to be a dramatic increase in the number of brands, with working business models, that make a loss on brand bids.
Are any of your clients considering legal action?
PD: None that I have heard of although I am sure some brands will contemplate this if they see a downturn. Rather than out and out bidding wars brand owners may be able to broker reciprocal ‘gentlemen’s agreements’ with each other to afford some degree of protection to their brand terms.
GA: At this stage, as far as we know, no clients are considering legal action.
AG: Bigmouthmedia cannot comment on any such possibility. Bigmouthmedia, however, has over 300 clients and therefore would not be surprised if one or more big brands are discussing the issue with their lawyers. Google may have put it in writing that they would never introduce these brand rules.
Will Google's quality score provide some protection for brands?
PD : CTR is a primary component of Quality Score and QS and Adrank are both relative measures. Given that brand owners will still likely get a much higher CTR on their terms than competitors (they will still be the most relevant results, after all) they should also still be able to rank higher for cheaper CPCs than their competitors.
The danger is that despite a brand owner still ranking for their terms at a cheaper price than their competition, the competition may still be able to rank cost effectively (relative to their business model) and convert sales. This will reduce the overall number of brand conversions for the legitimate brand owner – with the effect of reducing the overall cost-effectiveness of the company’s SEM efforts
GA: To an extent, yes, we expect the quality score to provide some protection. Factors such as relevancy, landing page quality and a high click through rate contribute to a good quality score and will go some way to securing a strong search position for brands.
AG: Yes. Google's quality score system will make it hard for anyone to brand bid as they will not be able to mention the trademark term in the ad text. Google's quality score system will also make clicks from thin affiliate pages very expensive.
Will brands now encourage their affiliates to bid on competitors' trademarks?
PD: Competitor brand terms will, in most cases, be considerably more expensive than a company’s own brand terms however keywords are also still likely to be considerably cheaper than (and probably convert at least as well as) generic terms – for this reason many companies may choose to manage competitor brand terms themselves in order to benefit from the relatively cheap traffic.
The exception to this may be that brands don’t want to necessarily be perceived as bidding on competitor terms and in this case they may find it more appropriate to utilise affiliate activity to this end.
GA: Affiliate brand bidding will no doubt expand under the new rules but other restrictions from Google concerning ad text and display urls remain in place such that it will not be a complete free-for-all. It is key that advertisers who engage with affiliates set clear policies with regards to brand bidding and take an active role in policing these policies.
Some will. Most will not. Bigmouthmedia USA operates in a paid search and affiliate landscape where these Google policies have been in force since 2004. In many verticals brand bidding is not a significant element in the campaigns and neither affiliates nor competitors do it. In fact, it is fairly common to have competitor names as negative keywords as the conversion rates are so poor.
The story in the UK will be different - initially. As this is a new (again) avenue it is only natural that brands and affiliates experiment with strategies. We are likely to see a strong rush on brand bidding but this will likely peak, drop and plateau after a downward curve. Brands must understand the importance of a holistic strategy as it'll be increasingly unwise to run search and affiliates separately.