I've heard a lot about trademark bidding in the last, oh, year or so, as more and more affiliates - and merchants - have realized the goldmine in trademark pay-per-click (PPC) bidding. There are 2 schools of thought: let your affiliates bid on your trademark so that you get more coverage and squeeze your (presumably unscrupulous) competitors out, or don't let your affiliates bid and preserve the integrity of your trademarks while tracking the PPC revenue stream separately from the affiliate marketing stream.
What seems to get lost in the shuffle in our discussions is the actual consumer. You know, the guy who actually is typing in the little search box? All that poor guy wants is to get where he's going. And he knows exactly where he wants to go when he types a brand name into a search engine - but that's a blog for another day, though.
A friend passed me a link to this blog, where the author has uncovered what I hope is a strange phenomenon with regards to correcting consumers on brand names. The long and short of it is that the Lego company doesn't want you to use the term "Legos" to describe their building brick toys. If you go to www.legos.com, they'll tell you that themselves. (Until they see the crazy amount of hits to this URL that don't make it on to www.lego.com and decide to make it a redirect.)
Thank heavens they don't have an affiliate program. Can you imagine their trademark bidding rules?
What's interesting about a company standing behind their brand this strongly (going as far as scolding consumers for getting the name wrong) is that this truly is the opposite end of the spectrum from what we sometimes see in our industry - merchants who are not protecting their trademark brand names at all.
Clearly, there has to be some middle ground. Or does there? Should merchants be guarding their brands like a pack of attack dogs? Or should they remain hands off and let the customers - or affiliates - shape their brand?
Posted by on September 19, 2005 09:48 AM
Comments
Patrice, I have written extensively about the user experience that Publishers can help provide to both users and merchants through trademark bidding. The merchant can protect their mark by having the Publisher sign a limited license for use of the marks.
If a merchant selects only the best Publishers, their VARs if you will, then they can promote different messaging to capture different users. Some users might not click on an ad for the merchant but may if they find they can get a coupon or cashback. Who knows what will light a consumer's fancy. Well, smart marketers know and you can often find them for cheap through affiliate programs.
As for Lego, rumor is Lego has an affiliate program in the works. As for TM bidding, wouldn't Lego prefer to get sales through the affiliate channel as opposed to having it go to retailers such as Amazon, Boscov's, Constuction Toys and Overtstock or even eBay and shopping comparison engines? That's who is bidding on "lego" today in AdWords.
Posted by: David Lewis at September 29, 2005 06:11 PM
Hi, David:
Based on your comments, when consumers type "Dell" or "FootSmart" or "Hickory Farms" into a search engine they're setting themselves up for a browsing experience. You're suggesting that they are not really looking to get themselves to that destination; rather, they're looking to browse a bit. In fact, you suggest they're looking to browse ads.
Seriously? You believe that this is what consumers do and is what advertisers find benefit in?
To answer your question, Lego would want to sell direct - incurring their own marketing costs - and achieve the fattest margin possible. That means they'd prefer to sell direct - no affiliates, no distributors.
Suggesting that an affiliate is more cost effective is a big assumption. This assumes you understand what Lego's costs are with sales attributed to their distributors (who buy AdWords). It also assumes that affiliates don't... uh-oh... trade on Lego's brand name to net the commission because as we all know, allowing affiliates to bid on one's brand merely intercepts traffic bound for the advertiser's site and assigns a cost (commission) to it. It does not, IMO, drive out competitors. Here is a great example. There are countless others. How is Hickory Farms benefiting here? They're not. There are lots of competitors in here. Some might say "then get more VAR affiliates in there." To which I'd say, "you'd better be ready to then assume those extra costs" (commissions).
In the end, this whole "let affiliates bid on your brand" debate hinges on an assumption. That is, a significant portion of users type brands into search engines and then go looking around for other places to shop! You'd better snare them with affiliates that (as you suggest) offer different ad copy. With all due respect, HU? Perhaps you are suggesting that Hickory Farms would benefit from your ad suggesting the consumer, who was primed to buy from having received a catalog, offering them a COUPON?
Not to be overly combative but do you worry about delivering customers to your advertiser partners that become "trained" to expect coupons for *every* purchase they make? Do you worry about coupon-based affiliate sites taking otherwise coupon-insensitive customers and turning them into hesitant customers?
Again... I'm not put off by the debate so much as I am with this notion (and gaming of the fact) that consumers, apparently, are simply too stupid or easily distracted to find the "real" Official Site URL.
Posted by: Jeff Molander at September 30, 2005 12:14 PM
See my comments to your similar article at http://www.revenews.com/jeffmolander/archives/001076.html
BTW, if users aren't looking to browse and won't be distracted by competitors, why should it matter if a merchant's VARs (good Publishers) are bidding on trademarks? Based on your argument, it won't matter. Then again, if you carry out your argument, the user will go straight to the merchant's website, especially if they have a catalog in front of them.
Posted by: David Lewis at October 11, 2005 07:48 PM
Why will it matter? Because it generates un-needed cost at no benefit!
Again, my favorite example can be found here
See any confusion as to where to go if you're a consumer? I suppose you would argue that a link to your site would benefit the site owner.
C'mon, David. If you carry my argument through you don't end up teaching users how to use their browser bar. You know that users use Google as they should their browser bar. Don't get all silly with me, brotha.
Posted by: Jeff Molander at October 13, 2005 11:51 AM
ARELIS is a software program that helps you to build a business network (link partners) quickly and easily.
Lego my trademark!
