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AdWords Trademark Policy Change: Possible Consequences

Last week, Google’s Dan Friedman wrote via Google AdWords’ official blog “..we are adjusting our trademark policy in the U.S. to allow some ads to use trademarks in the ad text. This change will bring Google’s policy on trademark use in ad text more in line with the industry standard.”

This development allows advertisers who don’t own a trademark keyword to incorporate them into campaign ad copies in many countries (China and Hong Kong isn’t in the list yet). This comes after the same ruling was imposed in the UK early last year.

As Google expands its relaxed policy on trademarked keywords, this means possible nightmare to trademark owners and boon to businesses longing to get the chance to incorporate these terms into paid search campaigns but were restricted by Google AdWords policies that allowed rightful owners to file a complaint and overturn ads from competitors. Until now.

Personally, I like this development. It makes ads more accurate. If these trademark-suppressed ads appear on the newspaper, I would be puzzled what product “buy portable mp3 player on sale” ad was actually referring to. Zune, iPod, Creative?

adwords-lcd-tv

This overhaul by Google presents the following consequences:

  1. Improved Google Income. This is almost immediately a given, as the floodgate of opportunities opens up by advertisers who are putting in more money into keywords they’re previously forbidden to bid to.
  2. More Competition. As expected, allowing trademarked keywords to be used by everyone else apart from the ones that own them will bring in more competition.
  3. More Expensive Trademark Keywords. Increased competition brings in more expensive trademarked keywords since more advertisers try to bid for terms like iPod, Bravia or Philips. Additional costs not only cover keyword bids, but also on the effort of keeping ad placement more prominent and therefore more effective. Agencies could charge more to adjust campaign strategy based on these changes.
  4. Keyword Costs Normalize to Realistic Levels. It is safe to say, by intuition, that keyword bid costs will skyrocket upon implementation of Google AdWords’ more permissive policy. But realistically, such scenario may not be sustainable and costs will drop after weeks, enabling advertisers to bid for keywords that still allow them to yield respectable ROI.
  5. Better Quality Ads. With more competition, advertisers are poised to create better quality and more appealing ads. That’s because advertisers can now combine both branded and generic terms and aim to improve AdWords Quality Score reduce costs and operate more efficiently.
  6. Trademark Owners Increase Budgets. Google has been trying to ask blue chip clients to increase budgets and this time it might successfully persuade them to do so, to keep ahead against competition.
  7. Trademark Owners Explore Other Options. This policy change could make trademark owners cry foul. How can our brand be used (or misused) by our competitors after we built it and took care of establishing its well placed reputation? As such, these companies could go elsewhere online — say social media — to seek more opportunities to promote their products and services online, instead of increasing their budgets.
  8. Google Risk for More Lawsuits. Not all countries and states have the same policy regarding use of trademarked terms. And this could mean Google, if it wasn’t very careful in selecting which countries and states this new policy should take effect, is bound to be sued by big and small trademark owners.

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Elmer W. Cagape is an SEO consultant based in Hong Kong. Into Seinfeld, Toad the Wet Sprocket, space exploration, comedy films, digital marketing and travel. Follow him on Twitter (@elmercagape).

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