November 15, 2009

Why Google Trademark policy worries holiday advertisers

In May 2009, Google changed its policy toward trademark usage in AdWords ads. Previously, Google had not allowed advertisers to use trademarks they didn't own, either for targeting or in ad text, and Google was responsible for policing that policy.

Under the new trademark policy, advertisers can use trademarks they don't own under certain circumstances, such as if they are reselling a product or discussing the product on an informational site.

Advertisers that are using trademarked terms includes affiliates of a brand, who may or may not have permission from the trademark owner, and sellers of gray-market and black-market goods, who usually don't have permission.

The impact of other advertisers bidding on a trademark most often comes in the form of increased costs to the trademark owner, who has more competition on his trademarked terms, which drives up bid prices. There's also the issue of missed revenue, where a searcher will buy from another site advertising on a trademarked keyword, and not from the trademark owner's site.

Also, there is potential damage to the brand in the form of mixed messages to consumers, such as an affiliate using a low-cost message to sell a luxury brand.

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