47% Affiliates Who Use Paid Search Bid on Trademarks. Surprised?

Yesterday, The Search Monitor released their January-June 2012 findings regarding affiliate involvement in paid search. The official press release read:

From January 2012 to June 2012, almost 70 percent of affiliate marketers on the major search engines (all Google networks, Yahoo, Bing, and Baidu) bid on trademark terms (47.22 percent) or, even more startling, direct linked (22.32%) from their paid search ads.

Here’s the accompanying chart:

Two comments on the undoubtedly interesting stats:

1. It is not surprising me that over 47% of “affiliate marketers on the major search engines bid on trademark terms.” I’ll tell you even more: some of the largest brands will do this (until you catch them). Another reason for proactive affiliate program management (integral component of which is policing of compliance with merchant’s TOS).

2. While for years I’ve been advising merchants against allowing trademark bidding on search engines, I don’t necessarily agree that DTM linking should be bundled into the same group as TM bidding. In some cases it does make sense to allow affiliates direct-to-merchant PPC ad linking (e.g.: when a merchant isn’t running any PPC of their own; or when they allow affiliates to bid on certain/competitive terms).

Other than these, this is definitely going to be some sobering data for some merchants.

What do you make of these?

15 thoughts on “47% Affiliates Who Use Paid Search Bid on Trademarks. Surprised?”

  1. Pingback: Marketing Day: August 31, 2012

  2. I’m surprised it’s that low.

    Always been one of the most controversial topics since…..forever.

    A lot of advertisers bow to the pressure of their PPC guys to stop affiliates, but if it’s not affiliates sending traffic to you, it’s your competitor sending traffic to themselves.

    I know which I’d prefer.

    1. Thanks for your comment, Jim. Always useful to hear/read a different take on the subject.

      I still believe there is between no to very little value in allowing affiliates to bid on trademarked (TM) keywords (and variations of thereof) and URLs as keywords. I do have a couple of clients who do allow TM+ paid search bidding (precisely because of what you have mentioned above).

  3. Geno,

    What do you think of brand bidding on coupon keywords. For example:

    Brand name vouchercode
    Brand name couponcode
    Brand name discount

    I see a lot of couponsites doing this and sending traffic to their sites with a overview of coupon codes of the brand. We use couponcode sites because some can get us additional sales when they promote us by e-mail or social media. But I don’t like the SEO or SEA focus of these sites trying to rank #1 on brand name + couponcode keywords.

    What’s your opinion about that?

    1. Bob, I’ve seen it work both ways: to the merchant’s benefit (especially when these TM+coupon/promo/voucher/discount affiliates are competing against the merchant’s direct competitors doing the same), and to not much benefit at all. So, normally it’s contingent on what else is happening in the same space.

      Another related “technique” is bidding on “TM vs Competitor’s TM” type keyphrases.

  4. Hi Mr. Prussakov,

    Its been really great learning about affiliate marketing from your books, articles, interviews etc. Sorry to go off topic from this blog because I could not find a place to ask questions on your website which are out of the topic of blog. or may be there should be a place on your website/blog where people can ask random questions about affiliate marketing. I mean a place for general public on your website where they can comment without going into any archives or categories.

    Ok, so my question is about creating of a conceptual model on affiliate marketing. I am making master thesis on affiliate marketing campaign planning for both affiliates and advertisers. It would be great if I could have some of your ideas on creation of conceptual model on affiliate marketing.

  5. I understand what you’re saying here and read your Trademark Violators article. In that piece you say “Many merchants are not doing this, and as a result, paying for something that naturally belongs to them in the first place.”

    While I agree the merchant – first and foremost – should have ownership over that, is it entirely the fault of an affiliate if the company is ignorant to that fact? Going along with what Jim said, if a consumer is getting to a merchants site through an affiliate, when they otherwise wouldn’t have, that to me is a sound investment worthy of compensation. Especially if that traffic is being directed away from competitors.

    Is it fair to intentionally prey on the naivety of merchants? Probably not, but as you’ve made clear, it really is on the advertiser to keep that from happening. And if the merchant isn’t going to pursue that PPC avenue on their own, perhaps they’ve lost something by stopping affiliates.

    Great post and a really interesting trail of links within it. I feel pretty torn on the subject and would love to read more on Trademark Bidding. Thanks!

    1. Thank you for your thoughtful comment, Christelle. Yes, once can almost argue it both ways — it is up to the merchant to prohibit this from happening (and enforce it), but if they aren’t doing it (forbidding+policing, or their own paid search) TM-bidding affiliates could well be worth the merchant’s “money”… However, there’s one caveat worth pointing out here: in most cases had it not been for the TM-bidding affiliates, the merchant would’ve gotten that traffic (due to their organic rankings) anyway.

  6. OK, taking this a stage further.

    How about where the brand terms are misspellings, ambiguous.

    I used to have a client who was an affiliate running insurance offers for Tesco. In the course of setting things up we found 62 variations where the word Tesco or insurance were misspellings and when the searches were made on Google and Yahoo (at the time) Tesco’s themselves didn’t show up at all.

    I would want to make it a closed group and I would expect any affiliate to run both brand terms and brand and generic and maybe even generic alone, with a minimum level of sales/spend/traffic to be delivered and make it a pitch process for those that want to be in, then everyone else is out.

    Contentious as always.

  7. Hi Guys,

    I’m still confused. I’m in the midst of working out a deal in which a few publishers may have the permission to bid on our keyword terms. My concern is that by doing this, would our cost go up for the PPC?

  8. Geno sorry I didn’t respond to your initial follow-up question.

    Tesco’s didn’t react because they didn’t know they existed.

    If the terms and conditions have specific words that are not allowed then we assume everything else is fair game.

    To answer your question Khurram your costs could be higher, but you might suggest to the publishers that they can’t bid more than a certain price, the Adwords algorithm doesn’t mean that if you are bidding more you will appear higher and typically what we find is that because publishers who are NOT the brand can be more ruthless in terms of page layout, if they are good they could almost always do better than you as the brand advertiser.

    I do go back to my original comment that if you don’t have other publishers on the brand words you are likely to have competitors, and I think I’d rather have allies than enemies bidding on the terms.

    Be sure to choose the publishers based on their sending traffic to you for generic terms or as a compromise “brand + generic” (an example of that might be “nike shoes” for the nike brand.

    Make absolutely sure the wording in your terms and conditions is not ambiguous. You can’t use words like “etc.” or “variations” and expect publishers to not be annoyed if you hit them retrospective.

    If you are smart you can piggy back their traffic using display advertising and Google Analytics to get super cheap retargeted traffic and that might be your trade-off with the publishers.

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