Google To Allow Advertisers To Bid On Competitors Keywords

Posted in: PPC Campaigns
By J. Mark Soveign
May 16, 2009 - 8:17:21 PM

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Google has opened up bidding on trademarked terms so that competitors can now bid on their rival's terms. Effective in June, the search giant will permit advertisers to use trademarks as keywords within their AdWords campaigns. Coca-Cola for instance, could bid to have one of its ads displayed when a consumer searches the term "Pepsi".

Google will now allow advertisers to bid on trademark terms, even if they don't own those trademarks. This move will mean more revenue for Google because it is expect that there will be a lot more bidding on these previously unused words. Google is saying that it is doing this "in an effort to improve ad quality and user experience."

This new policy will only apply to ads served in the U.S. on Google.com and to U.S. users on the Search and Content Networks. Basically if a website sells a brand name, or has information on it, its fair game to use that trademark in the ad text. Google's 180-degree reversal could have major implications for brands that have previously not faced competition when bidding on keywords related to their own trademarks. The most immediate: the specter of increased costs.

This change in policy is already having a significant impact on the way advertisers select their keywords when using Google to advertise their websites. It is also already having a material impact on the amount of money that trade mark owners need to bid on their own trade marks if they want to be sure that their links are at the top of the sponsored link search results. In these circumstances, it is not surprising that many trade mark owners are upset by this change in policy.

The decision to implement the strategy suggests that Google.com is highly confident it is operating on a sound legal footing.

“Following a global legal review, we have made the changes in countries whose legal and business practices are consistent with making the change,” Google spokesman Ben Novick.

Good For Google Earnings

With more companies eligible to bid on trademarked words, Google has opened up a potential new revenue stream, This shift means that advertisers not currently bidding on their own brand names could be open to rivals taking advantage of consumers who search for single word trademarked terms.