Google recently announced that starting on June 15, advertisers will be able to include trademarked terms in their ad copy for ads served on Google’s search and content networks in the United States. Ads meeting the following criteria will be allowed to include trademarked terms in their ad copy:

• Ads that use the term in a descriptive or generic way, and not in reference to the trademark owner or the goods or services corresponding to the trademarked term.
• Ads that use the trademark in a nominative manner to refer to the trademark or its owner.

Google explains that the main driver for this policy change is to enhance the user-experience. Advertisers will be able to create more descriptive ads, rather than having to resort to creating generic non-branded ads.  For example, under the old policy, a sports retailer might not have been able to promote brand-name athletic gear directly within their ad copy. This prohibited the advertiser from properly advertising trademark-protected sports brands. The resulting ads were overly generic. Users did not find the ads compelling and click-through rates suffered. This negatively impacted both the advertiser’s Quality Score as well as the user’s perception of ads shown by Google.

What Does The Policy Change Mean For Advertisers?
The updated trademark policy creates new opportunities for online retailers and distributors.  By allowing advertisers to include branded terms in their ad copy, Google has empowered them to create more targeted ads and to build more granular, brand-based ad groups.
 
While the policy change brings obvious benefits, it will also bring new challenges and responsibilities. Because Google will no longer offer system-wide trademark protection, advertisers will need to monitor how their brand is represented. In the past, advertisers could gain a degree of trademark protection by filing a trademark protection request with Google. If the request was approved, Google would not allow third-party sites to include the advertiser’s trademarked terms in their ad copy.

What Can I Do Now To Protect My Brand?
Google’s decision to take a less prominent role as trademark arbitrator may leave some advertisers feeling helpless. In reality, the situation is not so dire. There are several steps advertisers can take to continue to protect their brand and to ensure that they are not misrepresented.

1. Bid on Your Brand - As the saying goes “the best defense is a good offense”.  It’s more important than ever for advertisers to bid on their own brands. In the past, some advertisers would argue against this because in most cases their trademarked terms were protected under Google’s old policy and competitors were not allowed to mention the brand in their ad copy.
2. Create Branded Display URLs - Include branded terms in your display URLs by adding a “/trademarked term” at the end of the display URL.  After scanning an ad for relevancy, users often check the display URL to determine whether the site will offer what they are searching for.
3. Make Peace With Your Competitors - Nobody likes a dirty fight. Rather than getting into bidding wars over branded terms, make peace with your competitors. Respect each other’s brands. Rather than focusing on stealing impressions and click share, put emphasis on building your brand. In the long run, this strategy will help everyone connect with more qualified prospects.
4. Clearly Define Rules for Resellers/Affiliates/Distributors - If you are an affiliate manager, manufacturer, or distributor you should have a unique set of rules that govern your affiliates and resellers. Keep in mind that your affiliates add value to your online business by reaching audiences you normally wouldn’t have access to. Don’t let them cherry-pick conversions for a brand that you have developed over the years. If necessary, set bid caps on your trademarked terms, or don’t allow your affiliates to bid on your trademarked terms at all. Some affiliate managers also develop lists of restricted terms.

What Does The Policy Change Mean For Google?

1. Better User Experience - Google’s reputation as an advertising platform depends on their ability to present relevant ads. Lifting restrictions on the use of trademarked terms in ad copy will allow advertisers to write more descriptive ads stemming from more granular brand-based ad groups.
2. Google’s Confidence in the Quality Score Calculation - By lifting trademark protection of ad copy, Google is making a bold move in its faith in the Quality Score system as an effective means of automating trademark protection.
3. Trademark Arbitrator No Longer - For several years Google has provided advertisers with the ability to protect their brands upon request. Often trademark protection requests took several weeks to process. While this service offered advertisers brand protection and peace of mind, it was a labor-intensive process for Google. The policy update should lessen Google’s burden in this respect.

What to Expect
 
Short Term Implications
Expect advertisers to experiment with new strategies to exploit Google’s trademark policy changes. Many affiliates are already hard at work setting up new campaigns. It will be interesting to see how this works out for them and whether competition for branded terms prices these advertisers out of the market.
 
Expect to see an increase in competition for branded terms. This will most likely translate into higher costs-per-click for advertisers. However, I don’t expect to see a drastic change in click-through rates or costs-per-click for established brands or trademark owners like Best Buy and Zappos.  Established brands will continue to hold the upper hand over third-party advertisers because of their high Quality Scores for their brand terms.

Long-Term Implications
The trademark policy change will be a win-win for searchers, advertisers, and Google - which is effectively automating its brand management by relying on the power of the Quality Score. This is a bold move by Google and demonstrates their confidence in AdWords’ ability to weed out irrelevant ads.
 
In order to appease AdWords, and to rank in a cost-effective manner, advertisers will have to ensure that they point branded keywords to highly relevant, branded pages. This will greatly improve user experience and will of course, funnel directly to Google’s bottom line.
 
Tony Soric, Clickable SEM Guru
 
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