Are PPC Trademark Hijackers Costing You Money?

BrandVerity recently released a report that sheds light on one of the issues we’ve been talking about for years: PPC trademark hijacking. In the e-commerce world, branded search advertising can be one of the most effective digital marketing channels, bringing in purchase-minded visitors for relatively little spend.

But here’s the rub.

According to BrandVerity’s report, brands are losing tens of thousands of visitors per month from other sites bidding on trademarked brand names and using them in their ads. But these tactics are doing more than stealing traffic from retailers, they’re also costing them money by

  • Negatively impacting the ROI of affiliate programs
  • Driving up the costs of branded search campaigns
  • Lowering the CTR (click-through rate) of branded search campaigns

What’s Happening

BrandVerity monitored core brand keywords of over 250 popular, consumer-facing brands from ten different industry categories during Q4 of 2014.

To get the most comprehensive and clear picture of what types of ads appear on search engines when potential customers search for their brand, they looked at three different types of ads:

Brand Ad – an ad placed by the brands themselves on their own brand terms.


Trademark Usage – an ad placed by competing advertisers on branded keywords who also used a given brand’s trademark in their ad copy (which tends to convey that the given advertiser has a symbiotic relationship with the brand).







No Trademark Usage – an ad placed on a brand’s keyword by another advertiser (who is not the brand) and DOES NOT include the brand’s trademark in its ad copy.







Through their monitoring process of each of these ad types, BrandVerity was able to estimate the traffic loss for brands in each category. And the results are pretty staggering.

*For an in-depth review of their benchmark estimates and the brands and categories they evaluated, we highly recommend downloading their full report, which is available as a free download from their site.

Here’s what the findings looked like for the clothing & apparel and online retail industries:

Clothing & Apparel

For their report, BrandVerity evaluated twenty-five of the most popular brands (based on monthly search volume in the United States) that produce clothing, apparel, accessories, and similar items.

Here’s what they found:


According to BrandVerity’s report, Q4 saw a notable increase in trademark usage by comparison shopping engines (CSEs) and resellers – especially on Google.

So what should a clothing & apparel brand do if it wants to increase its direct online sales?

BrandVerity suggests that these brands need to be more strategic in deciding which brand terms its marketing partners are allowed to bid on and which they are allowed to use in ad copy.

Online Retail

BrandVerity based this category on the top one hundred brands represented in Internet Retailer’s Top 500 Guide from 2014. Traffic loss for online retail:


In Q3, search arbitrage (diverting clicks away from the retailers’ sites and driving up the cost of their paid search campaigns) played a significant role in the online retail category. The good news is that this was almost a non-issue for Q4.

So what was causing the traffic loss?

Primarily, it’s from trademark (brand) bidding.

Brands in this category can experience very different types and levels of trademark bidding. There’s no real consistency or a single advertiser to point a finger at. So for a brand in this category, BrandVerity suggests:

  • Renegotiating terms with retail partners.
  • Issuing a truce with competitors to reduce competitive bidding on their brands terms.
  • Reining in affiliates that bid on brand terms (as seen on AOL and Yahoo).
  • Run tests, such as an auction insights report in AdWords or Bing Ads, to gain insight into how the brand is being targeted.

Holiday Shopping Season

While all brands monitored by BrandVerity experienced traffic loss in Q4, brand bidding increased significantly for all categories during the peak holiday months (Nov – Dec.31st). In some cases, Trademark Usage doubled after Black Friday.

This is a particularly challenging time for brands because –although the brand bidding stakes are high – they are often so busy during this time of year that they don’t have the time to implement compliance processes. One suggestion is to trial a paid search monitoring tool prior to the start of the busy season and use it through December so that brands can collect data and monitor it when the holiday shopping frenzy quiets down.

The Takeaway

Trademark bidding is so important because it can significantly drive up your marketing expenses and inflate the performance of certain channels that didn’t really do much work.

The most immediate impact of trademark bidding can be felt in your PPC campaigns. Increased competition for branded keywords will drive up cost per click as you have to bid higher just to maintain your current rank. A branded paid search campaign should be an easy win. If you don’t control how your trademarked name is being used in search you could be costing yourself a lot of money.

Trademark bidding can also drive up costs in the affiliate channel. When people click on a branded at that an affiliate is running and then make a purchase after visiting that affiliate’s site, you may have to pay that affiliate a commission. That sale then gets rolled into the affiliate channel’s revenue numbers.

The problem is, this affiliate sale isn’t really incremental revenue, since the customer was already searching for your brand name and likely would have made a purchase anyway. In this way the cost of your affiliate program can become easily inflated.

It’s critical that your affiliate management team – whether in-house or at a 3rd party management agency – pay close attention to what every single affiliate is doing. Clear terms and conditions must be established regarding how affiliates can/cannot use the brand for marketing (e.g. name, logo, images, etc).

Affiliate reporting should also overlap with other marketing channels and the percentage of new customers gained from affiliate marketing efforts should be readily identifiable. Ideally new customers would be more than 50 percent of affiliate sales and overlap with other online marketing channels claiming the same new customer would be less than 30 percent.

Lastly, another important strategy is to use independent brand/trademark monitoring services (such as BrandVerity) to ensure that affiliates are not using the brand in paid search.

Contact us to learn how we can help optimize both your paid search and affiliate marketing programs.

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