Brand bidding & PPC optimization: enforcement options (Part 6 of 8)

In part 6 of her multi-part series on brand bidding for paid search, columnist Lori Weiman breaks down the legal issues surrounding trademark infringement in paid search ads.

Welcome to Part 6 of an eight-part series on PPC brand bidding, where I answer the biggest question facing PPC advertisers in 2016: How do I get meaningful growth numbers out of a crowded and competitive PPC market?

The answer is surprisingly simple: Brand Bidding. Advertisers at The Search Monitor (disclosure: my employer) currently enjoy tremendous growth from PPC brand bidding. I created this series to show you how they do it. Let’s make sure you’re caught up with the first five parts:

• Part 1: Bidding History: See how huge ROAS has slowed to a crawl over 10+ years.
• Part 2: Brand Bidding Stats:  Lots of stats on brand bidding.
• Part 3: How to Do it!: Steps to implement monster growth tactics for brand bidding.
• Part 4: Affiliates & Partners: Using partners and affiliates on brand and brand+ keywords.
• Part 5: Reducing Competition: How to minimize the impact of competitors.

Remember how we highlighted Avery’s tremendous results from brand bidding in Part 5? Avery monitors their brand heavily, and the results are indeed worthy of the word “tremendous.” After removing unwanted competitors from their brand terms, Avery realized these gains:

• Brand CPCs decreased by 64 percent.
• Clicks increased 34 percent.
• Total campaign costs dropped by 51 percent.

Today, in Part 6, I will review the important topic of brand bidding enforcement. More specifically, once you detect unwelcome competition, what can you do about it from a legal standpoint?

The law (in the USA)

I won’t bore you with case law here, but you should be aware of a few basic principles and how the law views brand bidding.

Trademark registration. To maximize your enforcement rights in your brand name and slogans, you must register your trademarks with the USPTO (United States Patent and Trademark Office).

Brand confusion protection. The main purpose of a trademark is to uniquely identify your product. It serves to prevent another business from promoting a product in a manner that is confusingly similar to your branded product. In order to win a brand bidding case, one of the proofs you must show is that your competitor’s ad is likely to confuse consumers. This single concept is really tough to prove and is why brand enforcement using the law and courts is very, very difficult — more on that in a moment.

Fair use. This term signifies that your registered marks can be used in special circumstances by advertisers such as resellers, news outlets, reviewers or product comparisons.

The law and brand bidding. Numerous lawsuits have been brought by brand owners against the ad sellers (Google, Yahoo and Bing) and the ad buyers (your competitors). The main finding has been that these lawsuits have gone virtually nowhere as a group. Unfortunately, we still don’t know where the law stands completely. Eric Goldman, a law professor specializing in advertising law, does a nice job of covering this issue in his “Forbes” articles on this topic. Here is a brief recap from some of his recent articles over the past four years (the law moves slowly!):

1. TM owners RARELY win cases against the ad buyers. Why? The burden of proof is too high. Trademark owners have to show that their competitor confused a consumer with their ad. To do that, it appears that the court wants the competitor to blatantly rip off your product description and have a web address and landing page that are similar to yours. Otherwise, they believe that consumers are too smart to be fooled. If no one gets fooled, you lose these lawsuits.
2. TM owners NEVER win cases against the engines/ad sellers. This painful reality exists because all cases have either been dismissed or settled out of court, so there have been no court judgments. No court has ever said anything bad about brand bidding or clearly endorsed the practice. As of June 2015, Mr. Goldman says there aren’t any pending lawsuits against Google, Yahoo or Bing.

Enforcement options

To enforce compliance against competitors and affiliates, you have three options: 1) Search engine complaints; 2) pacts or agreements; and 3) lawsuits, explained below.

Search engine complaints 

Filing a complaint with Google, Yahoo or Bing is the recommended option because it’s cheap (free to file) and easy, especially if you use an ad monitoring platform to automatically detect and file the complaints on your behalf. Before you get super-excited, however, there are some limitations:

1. Protected items: Only registered trademarks are protected.
2. Allowed items: Generally, each engine deals with trademark infringement as follows:
   1. Brand bidding: Allowed. Anyone can bid on your name, as shown in my previous brand bidding articles on best practices, managing partners and reducing competition.
   2. Ad copy use: Not allowed (with a few exceptions). Fair use rules (see above) allow resellers, affiliates, reviewers and news outlets to use your name in ad copy.
   3. Destination URL use: Allowed. Competitors can use your name as a sub-domain or sub-page. In Part 3, best practices in brand bidding, we even suggested that you do this to your competitors. Note that while the engines allow this, it does not mean that the law allows it. The more confusingly similar a URL is to the brand holder’s, the stronger the brand holder’s case becomes from a legal standpoint.

Pacts and agreements

Another method to enforce protection is with agreements. Agreements give you stronger and more reliable legal recourse than just complaining to the engines alone.

1. Competitive pacts: Some industries have gotten together, and competitors have formed written pacts where they have specifically agreed not to brand bid. These written agreements list in detail the allowed and prohibited activity, as well as enforcement proceedings should they be violated, which typically come with a financial price tag.
2. Affiliate agreements: If you have affiliates or partners, your affiliate agreement should detail the allowed and disallowed brand bidding activity, along with notice rules and financial ramifications for any violations. The swiftness and harshness of your action should match the conduct, which includes:
   1. Direct linkers. This harmful advertising practice should be dealt with swiftly, since someone is hijacking your brand outright. Actions should include financial withholding and termination of the relationship.
   2. Unauthorized affiliates. Affiliates who brand bid without authorization are mucking up your strategies. Actions should include notice with cure periods, financial ramifications and eventual termination if the behavior is repetitive and material.
   3. Authorized affiliates. Super-affiliates (discussed in Part 5 on reducing brand bidding competition) should be handled more gently, with kinder notices that build upon themselves and provide cure periods. Financial repercussions and termination should only be used as last resorts.
3. Reseller agreements: If you are a manufacturer, you likely have strict rules regarding sensationalized copy, minimum advertised price (MAP) compliance and brand bidding. Your agreements should detail these rules and the ramifications for not following them.

Lawsuits

A lawsuit based on trademark infringement should be your last resort. Trademark lawsuits are expensive and challenging to win (as noted earlier). The caveat is if you have a pact or agreement that prohibits brand bidding, and you have proof of the advertising activity through date/time stamped screen shots, then you have a stronger chance for victory.

Final thoughts on brand bidding enforcement

The enforcement component to a successful brand bidding strategy is well within the reach of any marketer or agency. This article has shown that enforcement is attainable with a foundation of always-on ad monitoring, coupled with complaints to the search engines (who do listen!), strong agreements to clarify what’s permissible within your industry and with partners and (as a last resort) lawsuits.

Each data point I see from my company’s search marketing clients continues to support that brand bidding is the most effective tactic for achieving meaningful PPC growth to your 2016 ROAS (return on ad spend). By following the practices discussed throughout this article series, you can achieve results that will impress any manager or client.

Next, check out Part 7 of my series, where I get to the meat of how brand bidding produces results similar to what Avery experienced. That article explains how to effectively bid on other advertisers’ brands and will show a few examples of larger brands that have figured out the winning formula. We’re nearing the finish line in our brand bidding series — hope to see you soon!