Trademark Violators -- a Type of Parasite « Affiliate Marketing Blog by Geno Prussakov

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While parasitism in affiliate marketing frequently being synonymized only with downloadable applications that intrude with the end user’s shopping experience with a purpose of facilitating cookie setting/swap on the customer’s machine, the term should really include everyone who is extracting wealth from merchants/advertisers without assisting them in any way to produce it. Trademark poaching is one of these cases.

Trademark poachers, or trademark violators, are affiliates that either exclusively or along with other keywords bid in their paid search campaigns on merchants’ trademarks, URL(s). as well as variations and misspellings of these. The sole purpose of such activity is to divert the trademark traffic to go through affiliate links/ads first. This sets an affiliate cookie on the end user’s machine, and should the latter place a sale/lead through within the cookie life duration, the trademark bidding affiliate will earn the commission on that sale/lead.

While there can be exceptions (e.g.: merchants with unknown brands, or those whose names consist of generic terms like “calendars”, for example), it is normally in the merchant’s best interest to restrict trademark bidding, and police it. While in case with “calendars”, Calendars.com should not restrict affiliates from bidding on key-phrases involving the world “calendars”, they should by all means prohibit bidding on their URL as a keyword (as they are doing now).

Many merchants are not doing this, and as a result, paying for something that naturally belongs to them in the first place.

Earlier this year Revenue magazine wrote:

Trademark poaching is attractive because of the low barrier to entry. For just the price of a PPC ad, publishers can quickly generate handsome commissions without the usual affiliate administration overhead, and reducing the steps from click to purchase increases the likelihood of a purchase.

One PPC affiliate, who asked not to be named, says there is a “pack of about 30″ PPC affiliates that closely monitor the list of new merchants at every network and “crank up campaigns on them all” in order to profit from this behavior.

This is true. It takes seconds to put together a paid search campaign, and multiple rogue affiliates are continuously taking advantage of merchant naivete (in keeping an open PPC policy) centering these campaigns on merchants’ trademarked terms and URLs only.

Review your affiliate program agreement today, and make sure you are clear on your stance regarding trademark bidding.

About Geno Prussakov

CEO & Founder of AM Navigator – an award-winning OPM agency. Founder & Chair of Affiliate Management Days conference. Author of bestselling "A Practical Guide to Affiliate Marketing" (2007) and "Affiliate Program Management: An Hour a Day" (2011), speaker, consultant, and affiliate marketing evangelist.

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3 Responses to “Trademark Violators — a Type of Parasite”

  1. Sharon M. says:

    Thanks, Geno, for another timely post. As a merchant, our program agreement specifically prohibits trademark bidding, but as you pointed out there are packs of affiliates who try to not only bid on our trademarked terms. They often have the nerve to not only use our term but go as far as sending them directly to our site and expect a commission! Direct To Merchant PPC (DTM PPC) adds salt to the wound! It’s not always easy to catch them either – they geo-target their links so they’re not visible in the merchant’s area and they run their ads overnight or at unusual hours. A merchant has to be especially diligent to try to keep up with them. I’m still a newbie at catching them, but with more good articles like this I’ll have a better chance of catching them before they cheat me out of more commissions!

  2. Amit says:

    No offense, but its a very high level and generic post which puts the blame squarely on the affiliates. All the points are true provided a merchant doesn’t allow TM bidding. But if that’s not the case, then TM bidding by affiliates isn’t totally a parasitic behavior.

    If that was the case, then CJ won’t be asking merchants to consider alloing TM bidding by affiliates.

    The following text is copied from a ABW forum post Good points from CJ this morning on working with PPC affiliates about the aforesaid CJ webinar.

    2. If you are going to allow trademark bidding, do so in a way that allows competitive blocking. This means the merchant gets the top spot and your affiliates get to kick out competitors bidding on your TM. With this strategy in place you know that your chances of converting a sale will be better than just allowing your competition to steal your customer away.

    3. Allowing trademark Coupon Searches helps customers find what they need when they know what they want. This doesn’t mean you have to post your coupons everywhere, this just means that someone is delivering what your customer wants when they type in “[your company name] coupon code”.

    4. Google is only able to show one results per URL per search for particular keywords. This means that by allowing direct linking to your display URL will result in either you or your affiliate’s ad showing up for a search. If you communicate your terms at the beginning, then this could actually be a good thing:

    Merchants have to be clear in their T&C about whether they allow TM bidding, if they allow direct linking. Not having a clear T&C and then blaming affiliates to be parasites isn’t fair either.

  3. Geno says:

    Sharon, glad you’ve found the post to be of help. Watch out for geo-targeting and dayparting too.

    Amit, the post isn’t putting “the blame squarely on the affiliates”. My conclusion says: “Review your affiliate program agreement today, and make sure you are clear on your stance regarding trademark bidding” — if you allow – say it; if you don’t – state which terms affiliates must stay away from.

    However, there’s a flipside to this whole issue. It is a fact that there are affiliates out there that do nothing but look for merchants with open (or non-existing) paid search bidding policies, but bid on trademarks alone.

    Is it always bad to have an affiliate bidding on your name? No. I did say that “there can be exceptions”. Is it always bad to have an affiliate bidding on your URL (targeting those visitors that instead of typing in your ABCWebsite.com URL into their address bar, type it into a search engine’s search box)? Absolutely.

    Yes, every merchant must have a program agreement where all dos and don’ts (especially the “don’ts”!) are clearly spelled out. Do they? Many don’t. Is that the main problem? One my conclude so. But in my opinion it is frequently simply being used as an an excuse to bid on trademarks. Should Lowes start an affiliate program tomorrow, and not clearly spell out that affiliates cannot bid on “Lowes” and “Lowes.com”, it would be very hard for anyone to even start making a coherent argument about the value added by affiliate PPC bidding on these terms.

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