What has been the impact on the top 100 brands since Google controversially removed trademark protection? Harvest Digital's planning director was asked to investigate.

On the 5th May 2008, Google introduced a highly controversial policy change removing trademark protection from U.K. brands. The change meant that anyone could place a paid search advertisement against a registered trademark. Major brands were up in arms amidst widespread predictions of rising bid prices and lost traffic. So two months after the changes, what has been the impact on brand searches?

We conducted a study of search results pages from brand searches on 100 major U.K. brands to look at what is happening on the ground. Looking purely at searches for the key brand terms like 'Tesco', 'HSBC' and 'Easyjet', we were interested in overall levels of PPC activity. The picture that emerged is very different from the free-for-all prediction before the 5th May. In fact the immediate impression is how little paid search is now occurring around brand searches:

• Almost half of all brands -- including companies like HSBC, Tesco and Marks and Spencer -- are not bidding on their own brand terms.
• 14% of our surveyed brands showed no paid search activity.
• Bidding by direct competitors on brand terms is largely restricted to two sectors: finance and travel.

It is worth reminding ourselves that Google has not removed ALL brand protection in paid search. Trademarks still need to be respected in Google Adwords copy -- so whilst anyone can bid on a brand term, only the brand owners and partners can use it in copy. That places competitors at a severe disadvantage because Google's quality score puts a high weighting on click-through rate -- and clearly people searching on 'Ford' are more likely to click through to a listing from Ford. Consequently, competitors will have to pay considerably more per search than brand owners for traffic. This also means that brand owners should have little difficulty in maintaining a top position in paid search -- there are only a few examples where the brand owner was not number one for paid and natural search on their key brand term.

Regardless of whether there are 'gentlemen's agreements' operating in certain sectors, this disparity in bid prices would inevitably make it harder to establish a decent return on investment for competitive brand bidding. 

Overall paid search activity level on brand searches
For each brand search we counted the number of Adwords placements on the first search page. On a typical Google search page you would expect to see up to eleven Adwords placements -- but even in the highly competitive finance sector we only tracked an average of five placements. Some of the brands showing most paid search activity are generic terms that have never been given proper trademark protection: companies like Go Compare, Compare the Market and Cheapflights. Competitive brands can legitimately use words like 'compare' in their ad text -- which would increase click through rates and hence reduce the cost-per-click.

Brand owners bidding on their own brands
42 out of 100 brand owners are not bidding on Google for their own brand terms. These brands clearly take the view that customers will find them through natural search alone. This must be disappointing for Google, where the argument has always been that traffic from search is maximised by being top of both paid and natural search.

Companies in the technology sector were least likely to bid on their own brands however are most likely to have partner/affiliate bidding on their brand terms. This reflects the way that many technology brands -- like Nokia or Sony -- sell largely through channel partners.

Bids by competitive brands
Next we looked for evidence of bids by direct competitors against brand searches. Before the switch, Hitwise confidently predicted that;
'…UK Internet users currently searching for 'Tesco' on Google will not see paid search entries from Tesco's competitors, but from May 5 this will no longer be the case.'

Yet even after the 5th May this position hasn't changed. In fact a search for Tesco shows no competitive activity -- and Tesco is not even bidding on its own brand term.

Competitive activity was strong in the finance sector, over half of all brands competing against their rivals for brand searches. Travel also showed some competition, but all other sectors studied -- retail, automotive, technology and telecoms -- showed little or no competitor activity. 

It's a question as to whether this represents a missed opportunity by sectors outside of travel and finance -- or whether companies in travel and finance are indulging in tit-for-tat competitive bidding which is ultimately only benefiting Google.

Activity by affiliates and partners
Technology and automotive show high levels of partner and affiliate bidding reflecting their sales channels. For instance a search on 'Ford' showed PPC ads from a range of Ford dealerships as well as a link to the official Ford website. Retail showed the lowest level of affiliate bidding -- surprisingly because retail is a big area for affiliate marketing. If affiliates are coming away from brand bidding, this is certainly because the cost per sales they are seeing is uneconomical.

Some brands are using affiliates to 'fill out' the search page for brand searches and make it difficult for other brands to gain traction. A search on 'Sky' is a good example -- the official Sky.com site takes position one, and the next five positions are Sky affiliates. So all roads lead to Rome -- or in Sky's case, to Brentford.

Conclusion
The overall picture on brand bidding shows large differences between different sectors, with some showing little or no competition whereas in others companies are clearly bidding against competitor brand terms.

However, even in finance, some of the largest brands have essentially opted out of Google Adwords as a traffic driver for their key brand terms. The brand-bidding landscape seems to be settling down in many sectors into a tightly controlled environment where brands seem to be able to dictate which partners bid on their brands and indeed whether or not they need to bid on their own brands at all.

Finance and travel are the exceptions rather than the rule: brand managers in these sectors need to be clear that their bidding on competitive brands is actually paying dividends. 

Mike Teasdale is planning director, Harvest Digital.