Google eases trademark restrictions on some U.S. ads

SAN FRANCISCO (Reuters) - Google Inc is lifting restrictions on the use of trademarked terms in its U.S. online advertising system, a move that could increase friction between the Internet giant and brand owners.

The new policy will allow businesses to place trademarked terms directly in the copy of text advertisements that run in the U.S. starting next month, the company announced in a blog post on Thursday.

The move, which Google said will improve the quality of its advertisements, comes as advertisers have begun bidding less money for the individual search terms that their ads appear alongside and as Google's revenue growth slows in the dismal economic climate.

Until now, Google has forbidden companies from placing trademarked terms in their advertising copy unless they owned the trademark or had explicit permission from the trademark owners.

That policy was the equivalent of a supermarket promotion in a Sunday newspaper that only listed generic products like "discount cola" instead of the actual products for sale, Google said in its blog post on Thursday.

The new policy will allow resellers and informational Web sites to use trademarked terms in their copy in certain situations without seeking permission from the trademark owners.

The move represents the second recent loosening of Google's policies on trademark use. Earlier this month, Google said it would allow companies in 190 countries outside the US to bid on trademarked keywords that act as the triggers for their own advertisements.

Google is also facing new legal challenges from trademark owners.

On Monday, Firepond, a Texas software company, filed a trademark infringement suit against Google seeking class action status for all Texas trademark owners.

Brand owners have historically had serious concerns about Google's policy with regards to trademarks, said Eric Goldman, Associate Professor of Law at Santa Clara University School of Law.

Google's latest policy change is "kind of like pouring gasoline on the fire," he said.

The change may help consumers better understand sponsored search results, by allowing the advertiser to reference trademarks in their marketing pitches, Goldman said. But he predicted that the change could spark more legal challenges.

Google Senior Trademark Counsel Terri Chen acknowledged some people might be unhappy with the change, but she said she believed the ads would be well-received overall.

Chen said the policy was well-established legal principle in the US. Google is changing the policy now, she said, because it was more comfortable it had a process in place to monitor situations that don't comply with the new policy.

One in three mobile users who recalled seeing a mobile ad said they responded to it in some way, according to Q4 2008 research conducted by Limbo and GfK NOP.

Among iPhone users, that response rose to one in two.

The research indicates that iPhone users are more than twice as likely as non-iPhone users to browse the mobile Web on their phone and more than three times as likely to use location-based services, including maps, restaurant locators and friend finders.

Among iPhone users, SMS, mobile Web and in-game ads were all about equally likely to be recalled, at around 18%, while mobile TV and video ads experienced 6.6% recall and mobile radio 11.1%.

Limbo, a mobile social network, found that 33% of non-iPhone mobile users recalled seeing mobile advertising in Q4. Some 41% of iPhone users recalled seeing commercial messaging. Most of the ads viewed were SMS messages.

“iPhone users do more things with their phones. They’re more likely to use SMS, location-based services and networks,” said Rob Lawson, Limbo’s CMO and co-founder, who attributes the difference to ease of use and the availability of diverse applications. “I think over time we’ll see that gap between iPhone and non-iPhone users start to narrow as people move away from pure SMS handsets.”

Mobile ad spending is expected to increase in 2009, according to JPMorgan’s “Nothing But Net” report, which forecasts spending on mobile messaging will rise 40% to $2 billion in 2009, and again to $2.9 billion in 2010.

As more consumers segue to Web-enabled mobile phones, the prospects for marketers looking to engage them with more than text messages should improve, Mr. Lawson said.

Branded PPC: Search Ads Can Offer Great ROI, Along with Some Challenges

SUMMARY: You have a solid SEO strategy. So, is bidding on your branded keywords for these affordable and flexible ads a waste of money?

Branded pay-per-click keywords can offer great ROI, push down competitors’ ads and present some challenges as well. Includes exclusive data from MarketingSherpa’s 2009 Search Marketing Benchmark Guide.
A solid SEO strategy often will get your website to the top of results pages for searches containing your brand name. Some marketers use this ranking to justify not bidding on their brands for paid search ads. After all, you’re already the top organic result for a branded search. Why spend money on ads when searchers can click on your organic link for free?

That sounds logical, but it’s not always the case. Bidding on your brand name can provide value. The ads can push down your competitors’ ads on search results pages. They can be easily changed to highlight a sale. And they can be a really inexpensive way to add value if traffic and revenue rise incrementally.

Discover the benefits that branded terms can bring, the challenges they present, and tips for using them.

Benefits of Branded PPC

Relatively Low Cost

Bidding on branded keywords can be cheap – depending on your brand name and your industry. Look at this exclusive data from the MarketingSherpa 2009 Search Marketing Benchmark Guide.

o Cost Per Click by Keyword Type
-High-performing brand term CPC
Average: $1.83
Median: $1.00

-Low-performing brand term CPC
Average: $0.85
Median: $0.38

One-of-a-kind brands generally benefit from lower CPCs on branded terms.

George Michie, Principal, Search Marketing, The Rimm-Kaufman Group, and his team manage search for 100 to 120 retailers with an average annual paid search spend of $1 million each. Most of his clients pay between 5 cents and 10 cents per click on branded search ads, he says.

Ian Lurie, President, Portent Interactive, says his clients with unique brands pay between 10 cents and 25 cents per click.

“In terms of click fees, the conversion rates are so high that, relatively speaking, it tends to be 1% of what a retailer spends on advertising,” Michie says.

o Generic brand names

Steven Broussard, Director Marketing, Golfballs.com, does business with a common brand name.

“My name is what I do, it’s the foundation of my business,” he says. “I don’t look at the word ‘golf ball’ as a brand term that I have to bid on. I look at ‘golf balls’ no differently than I’d look at ‘drivers’ or any other product line. It just happens to be my name.”

Since ‘golf balls’ is so common, Broussard sees higher CPCs on his “branded” terms. His average CPC is 78 cents for phrases, such as ‘golf balls’ and ‘golfballs’ in broad, phrase, and exact match, he says, and he receives about a three-to-one investment on the terms.

High ROI

People searching your branded terms are more likely to visit your site than if they search for a generic term or a competitor. That occurrence, coupled with the high-quality score and the low CPCs you can get with your branded terms, typically equals great ROI and conversion rates.

“One client is getting 17% conversion on a typo of their brand name, and they’re getting 19% conversion on their brand name in paid search,” Lurie says. “So they’re paying maybe 25 cents a click, and their per-visit value, their per-click value, is $8. It’s a radical return on investment.”

Broussard says that one of his “hugely successful” search campaigns targets keywords around personalized golf balls. It runs during the holidays and around Father’s Day.

“By far, that is my flagship campaign. Even during the non-holiday seasons, it ranks near the top,” he says.

Push Down Competitors’ Ads

Bidding on your branded keywords can combat your competitors' ads because your ads are more relevant. That gives your ads a higher-quality score, lower CPC and better position. For many brands, the quality scores for branded terms should be so good that their average CPCs are a pittance, compared to their other terms.

Bidding on your own branded terms also can push some of your competitors’ ads down, below the fold, or onto the next results page. You’ll likely snatch a few clicks away from them, and you can get the top ad positions more easily and affordably than they can.

If you have an affiliate program, bidding on your branded keywords will also help you sell products without having to pay fees to those who are likely bidding on the same terms.

More Control Over Messaging and Links

You have more control and can change the messaging in your paid search ads more quickly than in your organic links. This is important for marketers with good copywriting skills. Your paid search ads can emphasize a sale or the number of days left in an offer.

You also have more control over the links in your paid search ads than in your organic results. For example, if you created a microsite for a new product, that site might not be ranking well in organic results. But you can easily link to it from a paid search ad. You cannot simply change the URL of an organic link or redirect users without SEO consequences.

Challenges in Branded Keywords

Agency Fee Structure

If you’ve outsourced your paid search program, you should not have to pay huge agency fees on revenue generated through branded search. You’ve done most of the hard work already.

“Most of the folks who are searching for a retailer by brand name are doing so because they’ve been driven by other advertising, or by word of mouth, or by their own history with the brand.”

“Click fees to the engines are going to be relatively small. It’s the agency fees that you have to watch out for,” Michie says.

o Pay by spend, not by revenue

Paying an agency based on the amount of money it makes for your company makes sense. But it can be the wrong structure for paid search. Branded searches are driven by marketing that has little to do with an agency’s work. Also, branded ads are among the least expensive and best converting.

“The real work of paid search is on the non-brand stuff,” Michie says, adding that he sees about 99% of paid search spending done on non-branded keywords.

Generic Brand Names

Having a generic brand name can be great for driving people who search for a product to your site. If your website is CarMirror.com, and someone searches for ‘car mirror,’ there’s a good chance the searcher will click on your organic link.

However, there are two sides to the search coin for generic brand names. CPCs for generic terms, such as ‘car mirror,’ are likely to be higher than a unique brand name (e.g., ‘AutoZone,’ if it’s your brand name).

This is the position Broussard finds himself in at GolfBalls.com. His CPCs are a little higher for keywords that include ‘golf ball’ than the CPC other brands pay for their branded terms. He handles it by ignoring that his brand is ‘Golf Balls,’ and treats the term like any other keyword.

“If the phrase ‘green grass’ would affect ROI positively, it would be part of my keyword campaign,” he says.

Affiliates, Distributors and the Competition

You will not be the only organization bidding on your brand. Here are three of the usual suspects and ways you can deal with them:

o Affiliates, hands off

Your affiliates sell your products, so they’re likely targeting the same types of keywords. This drives up your CPCs and fees paid to affiliates.

Some marketers avoid this issue by forbidding affiliates to bid on their branded keywords. This prevents affiliates from piggybacking on your other marketing efforts and makes them work harder to find new customers.

“We advise all of our clients to keep everybody from bidding on your brand to the extent possible,” Michie says.

o Play nice with competitors

Competitors will often bid on one another’s branded keywords, sparking a bidding war. Some larger and well-established firms are willing to play nice, Michie says. Sometimes, a simple email or phone call requesting that you not bid on one another’s brands is enough.

o Distributors

You may also compete with your distributors on branded keywords. To determine if you should care, find out if the ROI of a direct order generated through a branded paid search is greater than the ROI of a customer purchasing from a distributor.

o Don’t get carried away

If you notice your CPCs getting higher and higher for branded keywords, you can fight back. But remember that you likely have the highest-quality score.

“I would never say, start doubling and tripling your spend, just to keep that number-one spot for your brand name,” Lurie says. “I just don’t worry about it that much because, eventually, the quality scoring is going to catch up with your competitors, and you’re going to end up back at the number-one spot anyway.”

Tips for Bidding on Branded PPC

Tip #1: Incremental revenue required

Every paid search campaign is original. Only you can determine if bidding on branded keywords is worth the investment.

When are the ads not worth the investment? If your traffic from paid and natural search combined stays roughly the same, or is not justifiably increased by the amount you’re spending on the branded ads, they’re not a good idea.

When is bidding on branded terms worth it? If you observe an incremental increase in traffic from your paid and natural search combined, bid away.

Tip #2: Monitor the competition

Get a look at the landscape first if you’re considering bidding on your branded keywords. Research your branded searches to find out who is advertising on them and where they’re driving traffic. This can help guide your decision.

Also, keep an eye on your branded campaigns once they’re running.

“Never take your hand off the wheel when it comes to bidding on your brand name,” Lurie says. “Don’t just build a campaign, bid on your brand name and then look at it a year later. You need to keep an eye on who else is bidding and why, because that can be a valuable warning about affiliates who aren’t behaving themselves or competitors who are taking a new tactic and trying to win customers away from you.”

Tip #3: Don’t forget misspellings and customer language

People talk about your company in their own language, which can deviate from your language. If you’re bidding on branded keywords, be sure to investigate common misspellings and spacing differences, such as “MarketingSherpa” and “Marketing Sherpa.”

Also, check out the online social networks that your customers use to find the different ways they refer to your brand.

“If huge fans, customers that really like you, start coming up with different phrases and terms around you, you want to know if those phrases or terms cross over from being descriptions to being additional kinds of brands,” Lurie says.

Tip #4: Isolate branded terms in an ad group

Your branded terms will likely have a good-quality score, so Lurie suggests giving them their own ad group. He also suggests having a separate ad group for the terms in broad match, phrase match, and exact match – even though there will be some overlap.

“Generally, you’re going to get a super-high clickthrough rate on exact match, a slightly lower clickthrough rate on phrase match, and a much lower clickthrough rate on broad match…Phrase match is probably going to be your real money ad group. Your exact match will get a super-high clickthrough, but not as many clicks.”

“We usually like to try to group stuff that’s going to have a high-quality CTR together, because then you get a higher-quality score and your bid cost is going to go way, way down.”

What demographic uses UGC and social networking in travel

February 13, 2009

In contrast, when it comes to social networking sites, like Facebook and MySpace, there is a definite discrepancy in the age of regular users.  EyeforTravel found that 70% of the 18-34 age group have used social networking sites in the last 30 days, compared to only with 35% of 35-49 year olds and 12% of 50-64 year olds. 

So why do the over 35’s feel more comfortable reading user reviews over participating social networks?  Firstly, travel-specific user-generated content sites, like TripAdvisor, are easy to use and very accessible.  The search functions are clear and quickly give people access to vast amounts of specific, relevant content.  This is not the case for social networks. 

Secondly, travel-specific UGC sites rarely require people to log-on or leave personal details, something which older people may see as an obstacle.  Reading user-generated content is more passive and less personally intrusive compared to actively participating in online social networks. 

Lastly, compared to social networks, the benefits of UGC sites are obvious.  For the over 35 age group, who are reading online hotel reviews, they can immediately see the opportunity to save money, avoid making bad decisions and get demographically suitable advice.  The benefits of social networking sites on the other hand, are not so clear.  The over 35 year age group tends to have more money to spend so it makes sense for them read customer feedback before making large purchases, such as travel.

On the other hand, there is a distinct portion of over 35’s who are perfectly poised to take advantage of the social networking phenomena; The Business Traveler.  This group tends to have greater connectivity and has access to state-of-art handsets and laptops.  Plus, they tend to spend more of their time online.  They are also more likely to accept impartial advice from fellow business travelers with the same requirements.  After all, you don’t need to be someone’s “friend” to get advice on traversing Chicago O’Hare on a Friday night. 

There is great potential for the business traveler to use social media to increase efficiency, access business-specific information, such as suitable restaurants for clients, and get updates on delays and adverse weather conditions.  Social networking sites TripIt and LinkedIn have recently made moves to exploit this opportunity.  The TripIt application on LinkedIn allows users to notify potential clients of upcoming trips. 

“TripIt was selected by LinkedIn as their travel application precisely because an older more professional audience is using social networking tools like LinkedIn and TripIt. The focus of these second-generation tools is on providing social utility and mobile convenience that provide information when and where people need it,” commented Gregg Brockway, TripIt Co-founder. Gregg Brockway and LinkedIn’s Lucian Beebe will be speaking about how business travelers can productively use social travel services at work at EyeforTravel’s Social Media Strategies for Travel Conference on March 10-11 in San Francisco.  They will explain which types of content, advertising and applications appeal to, and directly benefit, the business traveler. 

P&G Digital Guru Not Sure Marketers Belong on Facebook

Advertisers Shouldn't 'Hijack' Conversations, but Applications Hold Promise

Published: November 17, 2008

CINCINNATI (AdAge.com) -- Social networks may never find the ad dollars they're hunting for because they don't really have a right to them, said Ted McConnell, general manager-interactive marketing and innovation at Procter & Gamble Co., at a Nov. 15 forum on digital media.

In a talk to the Digital Non-Conference, a program by Cincinnati's Digital Hub Initiative presented by the Ad Club of Cincinnati and attended by about 190 people, Mr. McConnell pointed to the drumbeat of complaints about social networks being unable to monetize their sites.

"I have a reaction to that as a consumer advocate and an advertiser," he said. "What in heaven's name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?"

'Who said this is media?'
He went on to apply a similar standard to the broader world of consumer-generated media. "I think when we call it 'consumer-generated media,' we're being predatory," he said. "Who said this is media? Media is something you can buy and sell. Media contains inventory. Media contains blank spaces. Consumers weren't trying to generate media. They were trying to talk to somebody. So it just seems a bit arrogant. ... We hijack their own conversations, their own thoughts and feelings, and try to monetize it."

While it's not a company policy, but rather a personal preference, Mr. McConnell said, "I really don't want to buy any more banner ads on Facebook."

That's not to say he believes P&G should end all involvement with Facebook. He cited Facebook applications as a potentially valuable vehicle for advertisers, one in which they can create an environment that's favorable for their brands and consumers alike.

Uncomfortable about targeting
But while he appreciates the power of targeting afforded by Facebook, Mr. McConnell said, it also makes him uncomfortable.

He said a subordinate of his did an experiment in which he set out to use Facebook to find a 22- to 27-year-old female P&G employee living in Cincinnati "who likes sex and Cocoa Puffs -- that was literally the target ID he asked for Facebook to find." And he found such a person.

"So the targeting is fantastic," Mr. McConnell said. "You can do really amazing things. But I'm not so sure I want to be targeted like that. ... I don't think everything every consumer says to someone else and writes down is somehow monetizable by the media industry."

Inventory explosion
More broadly, Mr. McConnell said he believes marketer dollars will continue to flow online, but that won't necessarily be a boon to online publishers, because online display inventory continues to grow faster than the dollars going after it.

He cited research by Morgan Stanley showing cost-per-thousand rates on banner ads falling from $3 to $1 on average during this decade. And despite rapid growth of internet audiences in markets such as Brazil and China, he said, advertisers are able to pay CPMs of about 5 cents because of the even more rapid explosion of inventory there.

"Fragmentation thwarts artificial scarcity," he said, noting that CPMs for rich media have held up somewhat better. Search CPMs are growing largely because of Google's quality-scoring system, he said.

Despite the growth of online classified-advertising alternatives, Mr. McConnell said, classified revenue for offline publishers continues to dwarf online classified spending, leaving plenty of remaining revenue for newspapers and room for growth for online alternatives.

But the divergence of fortune for pay-per-click and other performance-based models vs. CPM-based models will only intensify as the economy worsens, Mr. McConnell predicted. "'Spray and pray' is a little harder to do when you're under economic pressure," he said. "So performance-based advertising will gain share over CPM."

Boutique segment a distinctive set

STR - 11.17.08

 

Whatever adjective you choose to use—hip, alternative, fresh or unique—boutique hotels are a distinctive and interesting group of hotels to analyze.

While the definition of a boutique hotel can vary widely, most agree that product offerings/assets in this space offer and promote a distinctive, urban/metro, contemporary and avant-garde feel. Disagreements about the definition of “boutique hotel” probably exist among both hoteliers and consumers, stemming from personal taste in FF&E packages (décor), atmosphere and architecture, both exterior and interior.

At STR, we objectively define hotels in the segment as having an actual or estimated room rate (ADR) of $175 or higher and a room count of 150 to 300 rooms. We also include major players in the boutique segment such as: Morgans Hotel Group (previously Ian Schrager Hotels), Kimpton Hotels, Joie de Vivre, Starwood’s W Hotels, recent product offerings from InterContinental Hotels Group’s Hotel Indigo brand, John Russell’s NYLO brand, Starwood’s Aloft and a number of independents that meet the definitional and objective criteria for the segment.

The boutique hotel segment is a collection of approximately 450 properties and 55,650 rooms accounting for less than 1.5 percent of all rooms available for rent in the United States. Growing in popularity and becoming a hip alternative place to stay for business and leisure travelers alike, the segment experienced notable supply growth in excess of 5.0 percent, starting in the late ‘90s and peaking at just over 7.0 percent before 9/11 and the resulting industry downturn. Currently, the 3.8-percent growth in room inventory outpaces the national average of 2.3 percent for the 12 months ending September 2008.

 

A tough operating environment has reduced demand for rooms 0.2 percent nationally while demand growth for boutique properties has grown by 2.5 percent in the latest 12-month period ending September 2008. Despite favorable levels of demand for the segment, the aforementioned 3.8 percent growth in supply yields a 70.6 percent absolute level of occupancy, which is a decline of 1.2 percent from a year ago.

Soft demand/occupancy in this current downturn has, in turn, affected rates. While the industry at large increased rates at just over 4.0 percent, hotels in the boutique segment were able to raise rates by 5.5 percent in the 12-month period ending September 2008.  However, this level of growth was markedly off from the 10.0 percent to 11.0 percent level enjoyed by the segment in both 2006 and most of 2007. The US$130 premium in ADR commanded by boutiques is certainly noteworthy and can be attributed to the distribution and density of product in major metro markets.

 

Revenue per available room growth of 4.2 percent came from the heavy contribution of the 5.5-percent growth in ADR and the 1.2-percent decline in occupancy. More importantly, RevPAR growth for the segment outpaced the national average of 1.7 percent. Similar to the ADR premium enjoyed over industry average, boutiques posted a US$100 premium in the absolute level of RevPAR for the 12 months ending September 2008.

 

 

If we look beyond this hopefully short downturn and into the future, the boutique segment appears poised to post favorable levels of performance and continue to be a viable option to the traditional hotel room and stay. New entrants into the competitive landscape like Aloft, Indigo, NYLO, and Edition—the Marriott/Ian Schrager partnership—will certainly shape this dynamic segment for years to come. Retiring baby boomers, Gen Xers, emerging Gen Yers and those consumers looking to escape big brands will certainly seek alternative, hip and unique surroundings, experiences and aspirations perhaps only a boutique hotel can offer. 

How Much Will Online Travel Slow? 

Nov. 13, 2008 - Online travel bookings will total $98.2 billion in 2008, up just 9% over 2007, according to PhoCusWright. The company said that some online travel providers would fare better than others, with rail sales growing by 28%, while hotel bookings would rise only 8%.

If the numbers prove true, this will be the first year of mere single-digit growth for US online leisure/unmanaged business travel. However, online growth will still be twice as high as that of the total travel market.

PhoCusWright said that reasons for online’s continued success included consumer comfort with online purchasing, perception of the Web as having the lowest prices and supplier disincentives for booking through other channels. The company also said sales from leisure/unmanaged business travel sites will represent 36% of the total market in 2008, up from 34% in 2007.

eMarketer’s most recent online travel sales estimates for the US were created in August 2008, in the midst of the economic slowdown but prior to the financial industry crisis. At the time, online leisure and unmanaged business travel sales (including airline, hotel, rental car, vacation package, intercity rail and cruise) were predicted to grow 12% this year to reach $105.1 billion.

Jeffrey Grau, senior analyst at eMarketer, said that if the market were being assessed today, the estimate would be lower and more in line with PhoCusWright’s.