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Microsoft Updates Policy to Allow Use of Trademarked Keywords

in Search Marketing Both comments and trackbacks are closed.

Recently, Microsoft’s Bing and Yahoo! Search – also known as the Search Alliance – announced a change to their trademark policy for the U.S. and Canada that is scheduled to go into effect on March 3. The update means that third-party advertisers will soon be able to use trademarked terms as keywords, as they’ve been able to do within Google since 2009.

What’s The Change?

Microsoft says it “will no longer investigate complaints about trademarks used as keywords,” meaning that advertisers are now allowed to bid on any trademark term regardless of their relationship to the trademark owner. This modification puts Microsoft’s trademark policy in-line with Google’s policy updates in June of 2009. Prior to this update, Microsoft had restricted the purchasing of trademark terms to select third-party advertisers. An example of their allowances would have been granted to authorized resellers, among a few other exceptions.

While Microsoft is loosening its policy for purchasing trademark keywords by third-party advertisers, Microsoft is not altering the current policy for trademarks in ad copy. They will continue to authorize exemptions to “ensure the quality and accuracy of ads on Bing and Yahoo! Search and to help our users avoid confusion.” The current policy for ad copy is more in-line with industry standards allowing advertisers to utilize trademark terms in ad copy if it is in reference to reselling authentic goods/services, informational websites (i.e. product reviews) and dictionary-uses of terms.

What Does This Change Mean For Marketers?

When Google allowed third-party advertisers to bid on trademark terms, this change impacted most advertisers either positively or negatively, and similar results are expected for Microsoft’s marketers.

Companies that sell a variety of trademarked goods/services like multi-product retail stores (i.e. JCPenney) and travel aggregators (i.e. Expedia) could benefit from this change:

-If a third-party advertiser bids on an established trademark term related to its goods/services, it can generate additional awareness, produce more qualified visitors and increase overall channel acquisition.

-If the third-party advertiser is authorized to have the trademark in ad copy, implementing an ad highly relevant to a brand search query boost platform quality scores and drive lower cost traffic, especially helpful for a retailer with ROI goals.

If a company distributes its products through multiple channels and sells directly through its website (i.e. Sony), this trademark change has several negative consequences:

-It puts the responsibility of managing who shows on brand terms solely on the trademark owner. For example, aggressive verticals could see increases in competitive bidding on trademark terms. In which case, resolving this issue would be the trademark owner’s responsibility.

-Trademark owners will have less control as to how their brand terms are used. Although it may be in a distributor’s best interest to not bid on certain brand terms, there are no Microsoft restrictions preventing this action.

-Being that the search marketplace pricing is based on an auction model, new competition on brand queries could impact Cost Per Click (CPC) on terms that are traditionally lower cost. The slightest raise in cost could greatly alter overall campaign performance.

-If additional advertisers were to display against a trademark query, the owner’s ad will no longer “own the page.” As a result, traffic could be distributed across the landscape resulting in lower traffic and returns.

Our Recommendations

When Google revised its trademark bid policy in 2009, 360i recommended that all marketers examine how this policy change may impact their campaigns and to develop a plan of attack to either take advantage of the revised policy or to defend their brand. Because Microsoft’s trademark modification is similar to Google’s policy, our recommendations are similar.

If you are an aggregator or reseller, you should consider the following:

-Review your current Yahoo/Bing keyword list to determine if you are already bidding on relevant brand or product terms. If you are not, you should consider expanding your keyword list to include these terms.

-Provided that your partner or supplier that owns the trademark does not object, update your ad creative to incorporate trademark terms. This will allow you to take full advantage of the expanded opportunities that this new policy provides and should likely increase the response to your search ads since consumers are often more likely to click on ads that include real brand or product names.

However, if you own these brands/trademarks, you should consider the following:

-Decide with your marketing and legal teams to define what rules, if any, you want to put in place to restrict third-party advertisers from trademark terms. Communicate these rules accordingly to your distributors and partners. There is no one right answer to whether or not a brand should allow their partners to utilize their brand terms.

-Work with competitors to develop an agreement not to advertise on each other’s trademark terms. This can be mutually beneficial by encouraging ethical behavior and preventing artificial CPC inflation.

-By Hank Beaver, Associate Media Director, and Bruce Williams, Associate Media Director, with Kenny Hamner, Media Supervisor, and Brad Renner, Media Manager.