Imagine you discover an open online auction, where free access is given to anyone with enough money to qualify for the bidding. The auctioneer steps in, and the first item up to bid is…your brand name! You observe as your most precious family heirloom is offered to the public to be parcelled out without your consent. Faceless strangers from different countries place their bids, forcing the price higher and higher in an ever-increasing spiral.
You soon realize that this auction does not operate within traditional rules. In fact, all the bidders can take home a piece of the item up for bid and use it as they please, whenever and wherever they want on the Net, as long as the bid price remains within their reach.
When the smell of instant notoriety and high online traffic volume is up for bid, the takers are many. In this perverse online auction, power struggles are played out, with market share and reputation at stake.
Much to the dismay of luxury brand owners, this online brand name ‘keyword’ auction takes place every day behind the closed doors of the search engines in every connected marketplace in the world, with any indiscriminate player who chooses to bid.

A rose by any other name would not smell as sweet
Historically, luxury watch brands have been inextricably connected to the name of a founder or creator. Generations pass and ownership may no longer be in the hands of the descendants of the founding family, but the name with all its essence, remains the anchor of the brand’s identity and market share. That’s why watchmakers protect and nurture the aura surrounding the mythical names of their ancestors with great care and protocol.
One way of doing this is by harnessing the powerful reach and penetration of Internet search engine marketing to build product awareness, underpin brand loyalty and increase lifetime customer value. Despite keyword auction aberrations, luxury brand owners recognize the strategic importance of leveraging their precious brand names by running keyword campaigns in a host of key markets.
Taking full advantage of the psychological ‘window of opportunity’ that opens every time an Internet user navigates the search engines, companies participate in keyword purchasing of their own brand names in order to attract and build confidence in the minds of potential and existing consumers.

When the gavel falls the auctioneer counts his profits
But brand owners are not the only ones reaping the benefits of keyword campaign opportunities. The flip side to this e-marketing success is the insidious Internet phenomenon so elegantly called ‘positionsquatting’. Positionsquatting is the abusive exploitation of a brand’s name and notoriety through the ‘purchase’ of search engine keywords.
By purchasing visibility linked to specific keywords, advertising for any number of competing sites can appear as a result of a brand name search. Often referred to as ‘Adwords’ by Google terminology, these sponsored links pollute search results listings and deviate traffic, with auction players ranging from authorized dealers to counterfeiters and grey market players. For the most part, linked sites do not have any affiliation with the brand in question, potentially damaging a brand’s reputation and value.
The companies behind usurping sites have it easy, exploiting established and coveted brand names without having to invest in all the marketing required to grow and maintain brand equity. Like a parasite extracts all the ‘good’ nourishment, they use keywords to reap the benefits of years of successful brand building, while driving keyword CPC prices higher in the process.
As the ‘host’ vessel continues to nourish itself in an attempt to survive, so brand owners are left fitting the bill for the abuses of the system. Depending on the size of the connected population of that market and the popularity of the brand name, snowballing keyword prices result in artificially inflated costs and a lower return on keyword campaign investment for the brand owners.

What does this brand name auctioning translate to for the search engines? For Google alone their 2005 yearly take on keyword selling amounted to almost $3.5 billion, with that figure more than doubling every year. Overall, Paid Search generated an estimated $10 billion globally in 2005, and that figure is expected to grow 41% in 2006 to more than $14 billion. (Piper Jaffray, January 2006; E-Consultancy Internet Statistics Compendium)

Private bidding – leveraging restricted access to regain control and lower keyword prices
But now, with the support of an experienced Internet agency and the latest online technologies, a brand owner can know the scope of the problem in each market. By measuring keyword price inflation and investigating diversion to illicit sites, a company can take action to regain online control over its brand name.
Recent legislation and precedent court decisions have made this possible by introducing much-needed regulation concerning search engine keyword selling.
As it stands, companies have no authority to close down the auction ‘houses’, but they can have their say in who’s invited to bid. By restricting keyword purchase access to the brand owner and specified authorized parties, the sale price is not pressured as high as it would be in unrestricted bidding, and grey market and counterfeit ‘usurpers’ are blocked from using brand keywords to establish sponsored links.
With few players, keyword CPC prices quickly return to their natural levels. Extrapolated to multiple markets and high click volumes, the keyword campaign savings can be dramatic. Moreover, the search engine results listings are wiped clean of ‘hijacking’ deviations to counterfeit or grey markets, resulting in immediate increased traffic to authorized and corporate sites.
The result is greater return on investment, wider visibility and a natural barrier to protect a brand’s identity, reputation and equity. To reap the greatest long-term benefit, most brands find it effective to mandate an agency to continually monitor application of the ruling in each market and signal any abuses as soon as they may occur.
If you are concerned about positionsquatting, you can click on www.brandsweeper.com for a free diagnostic of the scope of your brand name’s online exposure and possible illicit use in key markets.*

*A special service for Europa Star subscribers, in collaboration with IC-Agency


Source: Europa Star October-November 2006 Magazine Issue