The internet company is scrapping rules that prevent advertisers from bidding on branded keywords protected by its trademark complaint investigations policy.
The change of strategy, which comes into effect on 5 May, could pave the way for a bidding war on branded paid-search terms. BMW, for example, will now be free to bid on keywords trademarked by competitors such as Audi and Mercedes-Benz. This means that a consumer using Google to search for the term BMW could, for the first time, be delivered sponsored listings for rival marques.
The change is expected to lead to a significant increase in the price of branded paid-search listings. Advertisers have traditionally been able to purchase trademarked keywords cheaply, enabling them to generate significant profits from their sponsored search activity.
'This will undoubtedly create click-price inflation and may have a negative impact on ROI for search advertisers,' said Charlie McGee, managing partner at MEC Interaction. 'Marketers will have to reassess their paid-search strategies.'
Google claimed that the changes would allow it to give users 'greater options' and help them make 'informed decisions'. However, the fact that it experienced its first
decline in paid advertising clicks between December and January, according to comScore, has led to speculation that Google's policy revision has been motivated by a desire to drive profits.
'This seems like an attempt by Google to increase values and volume of bids on a huge range of terms,' said Gavin Sinden, digital strategy director at Equi=Media. 'This is very difficult to justify in terms of its stated policy of trying to serve the consumer by increasing relevance.'
The change brings the UK and Ireland into line with the US and Canada, where Google has been operating this policy since 2004. 'Advertisers are accustomed to the fact that users searching for their trademarked terms as part of a phrase may see ads from competitors,' said Matt Brittin, director of Google UK.
Separately, it emerged last week that Google is axing 300 staff following its acquisition of online advertising firm DoubleClick, which was completed last month. A quarter of DoubleClick's US employees are being laid off as part of a plan to integrate the company into Google's existing operations.
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