Google Updates Trademark Policy: Open Season for Paid Search Advertisers

In an announcement made yesterday on Google’s paid search advertising blog “Inside AdWords”, the search monolith declared “we are adjusting our trademark policy in the U.S.” This change of policy comes on the heels of the Texas based software company, Firepond, recent filing of a class-action lawsuit against Google for alleged federal trademark violations.

Google explains that the change is “an effort to improve ad quality and user experience”. Hint: this is code for “an effort to increase ad revenue from AdWords advertisers”. The policy change will allow some ads to use trademarked terms in the ad text, regardless of the trademark owner’s approval. This may result in paid search ads being less generic and more effective (more clicks) — which would improve Google’s bottom line.

The issue of trademark bidding and registered trademarks in ad copy is not new. In fact, Google has been very successful at fighting similar lawsuits filed against them in the United States; but does allowing free use of trademark bidding and registered trademarks in ad copy improve or hurt Google’s “user experience”? Is there rampant confusion about brand identity on Google search result pages?

For marketers, the larger issue may be, is bidding on competitor trademarks bad business? How will this policy update effect paid search strategy in the future? Will we see a change in the way paid search marketers bid on keywords and write ad copy?

The controversy over this topic does not appear to be going away any time soon. What do you think? If this is legal, is it ethical? Will this ultimately hurt Google’s “user experience” or help it?

I personally feel that the biggest winner with this policy change will be the consumer. This change will create more competition and less “ownership” of search result space. Simply put, competition is a good thing. Competition is essential because it leads to one very important thing — innovation.