Analysis finds Big Impact of Google’s Trademark Policy Change in Norway and Sweden

September 23, 2010

My first-week analysis of Google’s new keyword policy is indicating that about 50% of both Norwegian and Swedish advertisers that previously enjoyed trademark protection are now impacted.

The new changes that were put in place on September 14 2010 now makes it possible for competitors and other advertisers to bid on previously trademark protected keywords. So who’s taking advantage of this opportunity and what should brand owners do?

While it’s still early days, it gives a good indication on how hungry local advertisers are to make the most of this opportunity, and also what segments are most impacted.

From zero to ten competitors overnight

A good example of a brand that previously didn’t have any competition in either market for their main brand term is Dell. Shortly after the policy change the scenario looks very different, with up to 10 competing ads.

While price comparison and auction sites are dominant across several industries researched, in the case of Dell there are also clever marketers of complimentary products – such as ink refills and laptop batteries – that are now taking advantage of this opportunity.

Results from research of over a hundred large brands in each market (see methodology below).

Big impact on the travel industry

Similarly to what I’ve observed when these changes came into place in the UK in 2008, the travel industry is heavily impacted. While competing airlines for the most part aren’t yet bidding directly against each other, price comparison sites and aggregators are invading the space. This is likely one segment that will remain impacted as the ads for the most part are highly relevant to the consumer and thus likely achieving a good CTR and consequently a good Quality Score.

When analysing the changes for all airlines that are flying in and out of Sweden and Norway – and that are assumed to previously have had trademark protection – there is without fail now increased competition on their brand terms.

Trademark protection still gives an edge

Google has so far only lifted the trademark protection regarding keywords for these markets. This means that trademark owners still has a powerful tool to differentiate their ad copies and achieve a better CTR in order to minimise brand leakage. In comparison in the UK and US, retailers that are selling the trademarked product are allowed by Google to also use the brand term in their ad copy. This is an important indication of what might eventually happen in the rest of Europe.

What should impacted brands do today?

In short – if you’re a brand owner, you need to monitor and measure how this impacts your AdWords campaign performance. Carefully track cost-per-click and click-through-rates. In certain cases it might be as easy as reaching out to the companies advertising against your brand and trying to work out an agreement. In other cases you might need to be more creative in minimising brand leakage.

Finally it’s worth noting that not all brand bidding observed in the research is necessary on purpose. For advertisers currently using broad match keywords in their campaigns, Google might decide that a generic term (or even the own brand) is related to that of a competitor brand. Google may therefore trigger the ad against a competitor search. That’s both the benefit and issue of the  expanded broad match. To avoid these complications advertisers need to revise their keyword lists and in particular negative keywords.

If a brand has an an affiliate campaign now is also a good time to remind affiliates to not bid on competitor brand terms (assuming that is the strategy), to avoid creating any badwill from competitors.

Research methodology

The study tracked a bit over a hundred large brands in each market on their respective local Google sites. The focus was on brand keywords for which there were only one official advert or zero adverts. This indicated that there was a trademark restriction in place. The number of adverts shown against each brand keyword was then tracked for about a month prior to the changes taking place on the  14th September 2010, and compared to the period thereafter.

While the sample set might not be completely representative of the Google advertising market as a whole, it still clearly illustrates the point that the changes are having a big impact on brands.

Before (Norway): Telenor enjoying zero competition for its own brand term in Google prior to September 14

After (Norway): Competitors bidding on the Telenor brand term in Google

Before (Sweden): Dell having no competition on Google

After (Sweden): Dell waking up to a different competitive landscape

Finally it’s worth noting that not all brand bidding observed in the research is on purpose. For advertisers currently using broad match keywords in their campaigns, Google might decide that a generic term (or even the own brand) is related to that of a competitor brand and consequently trigger the ad against a competitor search. To avoid these issues advertisers need to revise their keywords list and in particular negatives.

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Rob Barham September 23, 2010 at 8:14 am

A review of ad text might be useful for brand owners ie. adding “Official Site”

Magnus Nilsson September 23, 2010 at 8:42 am

Rob, that’s a good tip. Thanks

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