Earlier this month @SMNWebcasts tweeted:

Naturally, I was among the first folks to request the whitepaper; but only now I’ve finally found time to blog about it.

The case study starts by quoting some sobering statistics from an analysis by Artinsic Interactive of “hundreds of advertisers”:

There are no hard and fast industry numbers to quantify the dollars missattributed or lost by hijacked brands, but …an average of 40% misattribution per advertiser is not unusual … and for some advertisers, it can hit 90%. Applied to projected advertiser spend on affiliate marketing, that could represent revenue misattributions of as much as $1.6 billions (40% x $4 billion) for advertisers using the channel by 2014.

While the former observation about (misattribution from 40% to 90% per advertiser) matches my own observations over the course of eight years, the latter statement may be a bit far-fetched as many of the larger affiliate programs are taking the issue extremely seriously, and monitoring such behavior.

Having said the above, I applaud Atrinsic for bringing attention to the subject of “chronic brand abuse” which happens when paid search affiliates violate merchants’ PPC bidding rules. Their case study vividly illustrates how and why trademark violators do what they do, what it means for merchants who have trademark violators aboard their affiliate programs, and what they can do to prevent this from happening. They also give some solid practical advice on protecting your brand from PPC violations. I appreciate seeing that they’ve used my blog as one of their references; but moreover I appreciate the practical angle of their white paper. Here are, for example, their “five best tips for locking down your brand”:

1. Know Thyself – Or “understand what is going on with your campaigns”, equipping yourself with ways/tools to track your brand activity constantly keeping an eye on such KPIs as “CPCs, conversion, and click through rates” as well as “rank fluctuations over time, your market share deviation as compared to control group,” and also “to your hot competitors”.
2. Know thy Enemy…and thy Friends! — Monitor “what your competitors are doing compared to you including the top 10 biggest competitive threats, top 10 new competitors, and top 5 gainers and losers in terms of market share”; plus track also what your affiliates are doing to drive their traffic to you. I love their advice on manual approval of “everyone who comes into your program”. See, for example, this article of mine on it.
3. Set the Rules and Make them Stick — Amen again! I’ve written (and spoken) time and again that you want to have precise “publisher and affiliate guidelines” and then police compliance with them.
4. Integrate Search and Affiliate — I agree with the idea of integration so that date could be correctly interpreted and acted upon. I do not agree with the advice that “your affiliate program should be managed by the same division/person that manages your paid search campaigns”. It is enough for the affiliate program manager and your PPC manager to work closely together; and for the latter to have access to all relevant reports.
5. Work with a Trusted Provider — This one is natural.

Overall, it’s an excellent case study — otherwise, why blog about it? — every affiliate, merchant, and affiliate program manager must review. Once again you may request it from Search Marketing Now here.

Trademark violations happen in multiple forms, but the more frequent ones are: bidding on trademarks in paid search campaigns and registering domain names with merchant’s trademarks in them. Both of these methods yield fairly easy money to violating affiliates, and neither of these will ever stop.

Also, just because you may have prohibited trademark use (in one form or another) in your affiliate program’s Terms of Service, doesn’t mean it’s not gonna happen in your program. It happens in every program out there, and if you do prohibit trademark bidding (or trademark use in domain names), you want to have good tools to police affiliate compliance with these rules.

Today I’d like to bring you 5 such tools:

1. iTrademarkBidding — This is a free, open source solution for monitoring trademark bidding. They “use proxies in most US states to monitor trademark bidding” on three major search engines: Google, Yahoo and Bing. “The information is recorded every hour allowing you to know who was bidding on your keywords.”

2. Brandverity PoachMark – Developed by Andy Skalet and David Naffziger, graduates of University of Colorado at Boulder and MIT respectively, PoachMark has been built exclusively with one aim in mind — to meet the paid search compliance need. This excellent piece of software counters the techniques used by more sophisticated black hat affiliates (such as referrer laundering, geotargeting, dayparting and id obfuscation). BrandVerity also manages and maintains two important databases of rogue affiliates: PoachMark Pool and The Affiliate Watchlist.

3. SearchMonitor — The Search Monitor focuses “real-time competitive intelligence to monitor brand and trademark use, affiliate marketers for compliance, and competition on paid search, mobile search, organic search, local, social media, and shopping engines worldwide in every language.”  The Affiliate Monitor can be effectively used to police affiliate marketers for compliance with affiliate program Terms and Conditions, and not only with restrictions pertaining to keyword bidding. This tool also allows you to police direct linking ad copy rules, and keyword rank. With reporting you have choice of viewing it online or receiving email reports. 

4. AdGooroo Trademark Insight –  In the fashion very similar to that of the above-quoted tools, Trademark Insight provides 24/7 automated brand monitoring by identifying advertisers who are bidding on or using your brand terms in their ad copy. Each license enables merchants to monitor up to 200 variations of a single trademark on 8 search engines in 46 countries. You also have options to view copy and average position of competing ads and identify the ad servers and individual affiliates in infringement.

5. CitizenHawk — In case you are prohibiting affiliate utilization of your registered trademarks in their domain names, there are also tools to police cybersquatting. This particular one is a really good tool. Their unique technology “identifies instances of cybersquatting that infringe on a company’s trademark, sends notices of fraudulent activity to domain owners, interrupts the flow of money being paid to cybersquatters and automates legal action to get fraudulent sites stopped for good.”

The above isn’t a ranking of any sorts (just a list of the more robust tools available out there). If I have missed a tool that belongs here, please do let me know about it by using the “Comments” are below.

It isn’t unusual to see the following affiliate paid search policy set out and enforced by a merchant:

In the vast majority of cases the above PPC policy is one of those best practices that every affiliate program should implement. The reason is obvious: such affiliate activity adds no value to the merchant, and serves a purely parasitic purpose.

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 [more here]

Now, imagine my surprise when I see the same merchant (whose paid search restrictions I’ve started this post with) having the following affiliates (highlighted) on board:

If you go to page 2 of Google results for the above-shown key phrase, you’ll actually see more of similar affiliate websites — those with keyword-rich domain names where one of the “keywords” is the merchants trade name.

How is this different from paid search trademark poaching? It isn’t.

A merchant has just asked:

I have an affiliate that just registered “trademarknameproducttype.com” and is going to start marketing our new [trademark name] product line. Is this acceptable? I know he’s doing marketing for us, however he’s using our trademarked name.

The intent of the above-quoted affiliate is obvious — to get the traffic which would search specifically for the merchant’s trademarked brand in combination with a popular keyword for the type of product. Keeping in mind that most search engines love keyword-rich domains [see this post and this poll, for example], the above scenario is really no different from trademark bidding in paid search. Just as it is with TM PPC bidding, the merchant should answer the following two simple questions:

• Does this affiliate marketing method add value?
• Can it generate incremental business/sales?

If the answer to any of the above two questions is negative, then there is no reason to allow this in your affiliate program. You also want to spell this restriction out in your program’s TOS.

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.