Increasing the user experience or simply increasing revenues?
As announced by Google and covered in numerous blog posts, the trademark rules for the UK are due to update on 14th Sept 2010 to allow any advertiser who meets the Google qualifying criteria to use trademarked terms within ad copy without the trademark owners permission. Indeed this is the biggest change since 2008 when Google allowed trademarked terms to be bid upon by all advertisers.
The 2008 change resulted in most brands seeing a hike of up to 20% in bid costs, and significantly increased the competitive nature of band bidding and hence quickly filled Google’s back pocket.
The change due in September for the UK is in no way un-expected, it brings the UK and Ireland into line with US policy. The change has sparked much debate across the industry with regards to how brands and specifically bid costs will or will not be affected.
Allowing advertisers who are re-sellers of a brand to bid without a trademark owner’s permission will undoubtedly increase the required bid costs. As a brand owner, in an ideal (or you could say Fantasy) world, being the brand owner should give you a high enough quality score to remain in top position for your brand terms for a low bid. In reality, this is already a misleading theory. Currently, as soon as a competitor bids on your brand terms, as an advertiser you un-willingly enter a fight for traffic. It is very rare that a brand owner can rely on quality score to keep them in the top spot, higher bids are almost always required.
This move will put Google even more out of favour for brand owners. We have all seen the coverage of numerous court cases (E.g. Interflora vs Marks and Spencer) where brands have to legally fight to retain their brand image.
But this change is not all bad news. If you are a reseller, this is going to give you a great advantage. By being able to promote your products with relevant ad text, and deep linking to specific product pages, you should be able to increase your quality score and possibly decrease bid costs. This change should therefore make the online retail market even more fast paced and competitive in the run up to Christmas than usual.
As usual, with a Google change, we can prepare accounts for this update, but then it will be the frustrating case of ‘wait and see...’