Recently, a client of ours enquired over whether it was legal for a competitor of theirs to bid on their brand name in Google Adwords. Unfortunately, we had to tell them that, back 2008, Google opened up trademarked keywords to bidding in the UK (primarily to open up a potentially huge stream of revenue for itself).

Although this news is nothing new, the topic of brand name bidding re-emerged when, earlier this week, an article published in NMA stated that, according to a report sent to them by Marks & Clerk: “[out] of 266 UK marketers and business executives, 71% were “uncomfortable” with Google allowing brands to bid on rivals’ keywords, with 63% saying it’s unacceptable when a brand is protected by a trademark.” (NMA, Trademark bidding may be controversial, but is it common place? May 28^th 2010).

However, the overall gist of NMA’s article was that although some brands are bidding on their competitors’ terms, it might not be happening as much as one might expect, and that additionally, it might not be as detrimental an effect on brands as was once expected. This was the conclusion arrived at after researchers at NMA looked at all the main department stores and supermarkets on the UK high street. They found that the only brand bidding on a rival term was House of Fraser on Debenhams.

So, never one to be out done, I conducted a little research of my own, but this time looking at smaller, more high end brands…

One of the first brand names I researched was ‘links of london’. The results were surprising. In the sponsored links, were a host of counterfeit websites with ‘links of london’ in the URL but with no use of the phrase in the ad text (Google will investigate ads which are using the brand keyword in the ad text). Some websites listed in these paid for links were so similar to the real thing, that it was quite hard to tell the official from the fake. Damaging? I think so – especially to luxury or high end brands. The same went for other luxury brands which returned sponsored links that the official brand might not be too happy about.

However, I would agree with NMA in that it is probably not happening as much as we all expected when Google first broke the news. In fact, during my search, I found few reputable, well known brands which had bid on other, similar sized, rival brands. In fact it tended to be poor quality, counterfeit or little known websites which had bid on bigger brand names (when the brand was not available to buy on the site in question – instead offering an alternative or fake product). That, or the listings were genuine stockists of the brand.

Therefore, in conclusion, although rival companies do not seem to be bidding on their competitors as much as expected, it is still damaging to a brand who does not want to see their product flogged on a discount or counterfeit site. Additionally, according to studies conducted back in 2009, the sectors most affected by the change was the travel and insurance sectors (ones which I did not research this time round).

So, what should a brand do?

Firstly, as demonstrated by Google vs. LVMH, there is little to be gained in taking legal action out against an online giant such as Google. Therefore, I would persist in arguing that brands need to remain focused on their organic search listings, and not focus solely other types of online brand building activities. Any brands’ strategy – large or small, should include organic SEO so that they appear at the top of Google’s organic search results.

Do not rely on paid listings to avoid good, old-fashioned search engine optimization – consumers still prefer organic listings over paid for links. Regardless of what’s going on in the paid section, ensure your site and brand shows up at the top of the natural, algorithmic section of the search. This alone will reinforce the relevance of your brand to the search term entered.