Knowledge is the Foundation To Success  

Some businesses choose to advertise on competitor names while others don’t. Is it worth it & what is the risk?

Google allows AdWords customers to advertise on trademarked terms in the U.S. & research indicates that U.S. courts have so far agreed that it is not illegal to advertise on competitor names, as long as the message is not misleading. However, the rapid adoption of the Internet as a tool to find products and services has resulted in trademark law getting challenged and changed on a regular basis, so there is still uncertainty in this area.

I would like to start out by making it very clear that I am not a lawyer. However, per Jeffrey A. Babener, who is an attorney with Babener & Associates, “Generally, a seller or imitator may use a competitor’s trademark when advertising the seller’s product so long as the competitor’s trademark is used in a truthful way, such that its use is not likely to create confusion in the consumers’ mind as to the source of the product being sold”

“Over the years, many different legal theories have been used by competitors in an attempt to stop the use of their name or product … Actions have been brought for disparagement, trade libel, defamation, trademark infringement, unfair competition and misappropriation of a name. The successful cases have, for the most part, involved false advertising and unfair competition through the misrepresentation of one’s product, causing consumer confusion… A seller may be held liable for unfair competition under federal and state laws where the seller misrepresents either the seller’s, or the competitor’s products. ”

Some U.S. courts have upheld that advertising on a competitor’s name is legal.  For example, In J.G. Wentworth SSC Ltd v. Settlement Funding LLC, 2007 WL 30115 (E.D. Pa. Jan. 4, 2007), the court granted summary judgment to the advertisers based on the lack of evidence of consumer confusion. There are other examples as well.

Businesses can partially protect themselves by trademarking their name so competitors cannot use their name in ad copy, but again, this process does not prevent competitors from using trademarked terms to advertise on. Advertisers can click here to review AdWords Trademark policy detail and access their Trademark Complaint Form.

Interestingly, when it comes to advertising on a competitor name, large companies basically have the ability to bully smaller companies into submission, and here is why. If Business A is upset about Business B’s decision to advertise on Business A’s name, Business A can then have their lawyers issue Business B a Cease & Desist Letter. If Business B decides not to listen, they may then be setting themselves up for potential litigation. I am trying to simplify something rather complex, but the bottom line is that even if Business B has done nothing illegal, they may still find themselves in a position where they have to defend themselves. The cruel reality of litigation is that it can easily cost $100,000 in legal fees. Furthermore, a company cannot defend itself as an individual can, so a lawyer must be hired to defend a business (with certain exceptions that might apply to small claims court). Again, I am not a lawyer, but this is my understanding.

In the end, it appears that advertising on competitor names is legal and usually OK to do. If a competitor is upset, they will usually have their lawyers provide a Cease & Desist Letter, at which time you may want to comply with their request as litigation is incredibly costly. It must be understood that advertising on competitor names has the potential to result in unforeseen grief, litigation & legal fees, so it is important to understand your risk.

At JumpFly, we leave the choice of advertising on competitor names to the client. For those that have done this, it has often proven valuable and provided a very favorable ROI. However, this action can certainly lead to grief if a competitor is infuriated and willing to try and litigate, even if they would likely lose. So if you choose to go down this path, it must be done carefully & without confusing potential customers. Sadly, businesses advertising on competitor names that find themselves in litigation will likely find that even a victory in court still results in defeat in the pocket book.

In the past few weeks, quite a few JumpFly clients who advertise on Google AdWords have been reaching out to ask about the seller star ratings that are now showing up in sponsored link ads shown on Google.  So, we did a little digging to answer the question:

How can I show my Google AdWords ads with Seller Ratings Extensions?

Here is what we found out: Only certain ads are eligible to appear with the new Seller Ratings Extensions and none of the current account settings need to be changed in order to be eligible.  Once a Google AdWords advertiser meets the criteria listed below, the distribution of their ads with the Seller Ratings Extensions is automatic.  This means that the ads are automatically opted in to showing seller ratings with the ads on Google Product Search.

Here are the criteria:

* Advertiser’s campaign must be opted in to Google search.

* Advertiser’s campaign must be targeted to the United States ONLY.

* Advertiser’s business must have at least 30 unique reviews and a rating of four stars or higher on Google Product Search.

* Advertisers do NOT have to have a Google Merchant Center account to be eligible to have their ads shown with the Seller Ratings Extensions.

* Advertisers will only be charged if the headline of the ad is clicked on.  Clicks on the review link are free.

While this is a wonderful extension to Google’s ever growing list of product extensions designed to help merchants provide their potential customers with highly targeted and relevant information when searching, some merchants may not be too keen on the idea.  To opt out of this extension, the merchant will need to complete a form requesting that Google disable the Seller Rating Extensions in their ads.  Google does not recommend this as the Seller Rating Extensions “is likely to increase the amount of qualified traffic” to their website from their ads.

Personally, I think this is a marvelous addition to Google arsenal of Ad Extensions.  With the internet FULL of sites like Yelp, Ripoff Report, Consumer Reports, Trip Advisor, Epinions, etc. it’s blatantly obvious that reviews and ratings matter to the average consumer.  This is Google’s way of inching one step closer to the ideal, perfectly targeted and extremely relevant PPC ad. If you think that your business could benefit from a professional PPC Management Company, please feel free to contact Jumpfly.  PPC is all we do.

A big thank you to whoever at Google came up with the idea for the Broad Match Modifier. You made my day.

The broad match modifier is a new keyword targeting option. (The existing match types are broad, exact and phrase.) I’m a firm believer in using exact and phrase match terms in an account, but am very leery of using broad match. Broad match allows Google to show on searches that they think are related to your keywords. I use this example when I’m explaining broad match to clients: you are a fruit seller and all you sell is apples, so you advertise on the keyword apples. Google decides that an apple is a fruit, therefore they could show you on searches for oranges or bananas. Not a good use of your advertising dollars.

A couple other examples from my clients at JumpFly: how about finding out one of your clients ads is showing on the term “nudist camp?” (My client runs a kids summer camp.) Or how about a moving company spending thousands of dollars on what turned out to be the term “movie” because Google was mapping to the word “moving.”

So broad match has not been my favorite match type, unless a client has a large budget and wants huge amounts of traffic.

But with the new broad match modifier, I can try more broad match terms for my clients because it gives me more control. Basically, when I put a plus sign in front of a keyword, Google will know that that particular term has to be in the search or will match on close variants. (Close variants include misspellings, singular/plural forms, abbreviations and acronyms, and rood words, like “floor” and “flooring”.) Here’s an example: if the term is +golf +shoes, your ad will show for “gulf shoes” or “golf sport shoes”.

Broad match modifier just came out of beta testing in the UK and Canada. I’m looking forward to seeing how it works for my clients, as I’m doing my own beta testing for a few clients. If it works, I’ll start adding it to more of my clients accounts. If you are interested in seeing how the broad match modifier might be able to work for your business, contact a professional PPC Management Company.