Fashion brands count the cost as holiday spike sees trademark bidding surge 31 Jan 17
Third-party advertisers bidding on trademark terms in online search results spiked by 21% across the fourth quarter of 2016, with leading brands estimated to have lost 46 million clicks across the three month period. For key brands in the clothing and apparel sector this has been translated into approximately $300,000 in lost revenue.
The data is included in new research from monitoring firm BrandVerity, which evaluates the paid search landscape on keywords related to over 250 consumer-facing brands across ten different industry categories. The purpose of the study is to ascertain the types of ads that appear on search engines when potential customers search for a brand and how much traffic brands may be losing because of it. To facilitate this analysis, three types of ads are considered – those placed by brands on their own brand-related terms (‘brand ads’), ads placed on a brand’s keyword by a third-party advertiser which the brand’s trademark is also used in the ad copy (‘trademark use’) and those placed on a brand’s keyword by another advertiser that does not then include the trademark in its ad copy (‘no trademark’).
Last year we reported that, after a decline across the first two quarters of 2016, in Q3 the number of third-party advertisers bidding on trademark terms on Google jumped by a third. This upward swing continued in the fourth quarter, with trademark bidding spiking by a further 21% across the sample universe on all engines, with an estimated 46 million clicks lost by brands. While trademark bidding increased on every search engine, the biggest jump was seen on Google, with ‘trademark use’ up by 21% on the previous quarter and the ‘no trademark’ segment rising by over a quarter (26%).
In a separate report titled ‘Paid Search Trends 2017’, Brand Verity suggests that the bounce-back in trademark bidding over the second half of 2016 could be attributed to advertisers adapting their campaigns to Google’s Expanded Text Ads. Additionally, the fourth quarter was always going to be a competitive one in the online advertising world, with holiday season driving more consumers online and outlets and brands keen to get a slice of their shopping spend. However, while the first half of 2016 suggested that trademark bidding may be slowing down, by year end it has become clear that companies cannot be complacent as they seek to maintain competitive edge.
In terms of the different segments, the clothing and apparel category experienced the largest spike, with a 43% increase in trademark bidding. On Google, trademark bidding in this sector doubled, with trademark use up 100% on the previous quarter and ‘no trademark’ rising by 116%. Utilising rjmetrics.com’s economic behaviour model, the report estimates that 86,800 clicks were lost and, on a 5% conversion rate this equates to a loss of 4,340 customers and $308,000 in revenue (per brand).
While in the clothing and apparel sector brands and trademark bidders were pretty even in terms of the overall advertiser mix when it came to impressions, in other sectors trademark bidders were clearly winning when using brand names. In the home services sector, trademark bidders received more than double the number of impressions than the original brand. In the consumer electronics sector, the brands were similarly lagging far behind trademark bidders, resulting in $95,600 in lost revenue per brand over the quarter (calculated according to average order spend utilised in rjmetrics.com’s industry statistics).
As we have mentioned when covering previous versions of this research, not all trademark bidding is infringing and where trademark bidding is undertaken by third parties that are channel and marketing partners, some of these lost clicks will find their way to the legitimate brand site(s). However, the study does provide insight into the scale of revenue that can be lost to third party bidders. For those tasked with monitoring use of their marks and protecting their brand against infringement, the data on lost clicks and revenues may be a useful tool when lobbying management for increased budget.
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