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.

Over the past few days I have reviewed over a hundred of affiliate applications into a program I manage, but 3 particularly stood out. One of them was from the UK, one from Serbia and one from Indonesia. These applications can be gathered into one group, because all three had one thing in common — established trademarks in the domains of their websites. Here are some interesting screenshots:

Both iPhone and Travelocity are registered trademarks which belong to Apple Inc [TM registered on 9 Feb 2010] and Sabre Holdings Corporation (owner of Travelocity.com) respectively.

None of the above applications were into Apple’s or Travelocity’s affiliate programs. But does this mean there is no reason for concern? Quite the contrary! If they are squatting on trademarks of other merchants, there is no guarantee that they won’t do the same to you. I declined each of the above affiliate applications, and suggest that other affiliate program managers handle such situations in a similar manner.

Related posts:

• Affiliates, Domain Names and Trademark Violations
• Since When Has Typosquatting Become Acceptable?

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 friend, and fellow affiliate marketer tweeted:

If you are looking for tool to monitor affiliate (and competitor) bidding on your trademark, AdGooroo does seem to have a free option offering a “24/7 monitoring of 6 search engines in 20 countries” with a “deep analysis of over 155 ad servers and affiliate networks” [more here].

You can open a free account with them if you want to monitor 1 trademark (which can be increased to 10 trademarks if you refer three friends — edit: as of January 2010, this offer is no longer valid, and they only offer free accounts for 1 trademark). Here’s what their website says about the monitoring for infringements by affiliates:

Sounds like a must have for merchants who need a tool to monitor trademark violations, as well as for affiliate program managers who operate programs which prohibit trademark bidding. I will play with it, and let you know how it works for me. Thanks for that tweet and email, Rehan!

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.