Brands, Trademarks, and the Brand Marketer’s Dilemma

Should brand and direct marketers buy their own trademarks as keywords? Should you buy other competitive trademarks in your Google, Yahoo, or other search campaigns? There are no simple answers, but recent news has put trademarks as keywords back in the limelight.

The trademark infringement case between GEICO and Google resurfaced this week due to some PR sparring between the two companies. GEICO put some heavy spin on the published ruling, evening confusing the media. Some reports indicated the case’s outcome changed in GEICO’s favor. In fact, the ruling was identical to last year’s oral decision: Google can sell trademarked terms and marketers can run ads, so long as they don’t include use of the trademark in the ad.

The judge’s ruling asserts only when a trademark appears in an ad keyed to the trademark as a search term is there potential trademark violation and consumer confusion. As Google’s trademark policy has long been that marketers can’t use a trademark to which they don’t have ad copy rights, GEICO’s PR mavens claimed victory. But the primary litigation objective — to stop the bidding — fell in Google’s favor. Essentially, the judge upheld Google’s policy of forbidding misleading trademark use in ad copy.

In response to negative buzz, Google issued a response: “Google already has a policy that prohibits advertisers from using someone else’s trademark in their ad text when the trademark owner objects.”

There may have been some instances where advertisers did use the GEICO term in ads in a misleading way. That portion of the case is still unresolved. My guess is Google could choose to settle any possible damages relating to ads running before the current policy was enforced and proceed to take trademarked keyword advertising without requiring any policy change. Of course, Google might be interested in challenging even the current ruling, claiming that even with the trademarked keyword in the ad, there may not have been consumer confusion in the specific instances that are part of the lawsuit.

Ironically, some of GEICO’s competitors continue to bid on GEICO terms, complying fully with Google’s policies and the judge’s ruling. For example, a search this week on that keyword “geico” in Google yielded the following sponsored results:

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Though not all these advertisers are using best practices to get their quality score as high as possible, and thereby maximize their net search profit, they’re likely seeing a positive return on investment (ROI), particularly in weeks prior to this one. More of the search traffic is news-related, driving down the ad quality score. These advertisers might even consider pausing their campaigns during periods of news-driven search activity to preserve their good quality score.

GEICO and Google may hate each other right now, but GEICO does itself a disservice by not advertising with Google, particularly on keywords with a poor organic rank or for phrases for which a competitor has a top paid spot. For example, “geico commercial” and “geico insurance quote” would have huge ROI for GEICO if it chose to run advertising. Just as important, it could reduce the chances it will lose the sale to a competitor.

Even when GEICO has a top organic position, it could double its screen real estate, reducing the likelihood that a competitive or price comparison site buying its phrases and keywords will get the business.

Does GEICO understand it has a huge opportunity cost should it continue to abstain from buying PPC (define) search? My guess is emotion is temporarily in the foreground. In the long run, profit maximization will prevail.

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