In a move that is sending shockwaves throughout the digital marketing sector, Google's controversial decision to allow anyone to bid for trademarked keywords is set to have a major impact on the industry. Tipped to send prices skyrocketing, the decision could leave the search giant open to legal challenges from the major UK brands likely to lose millions as a result.
"This is an incredibly bold move that has taken most of the sector by surprise. It will certainly lead to a big change in the way that advertisers and agencies manage their search campaigns. It could also have an impact on the UK digital agency landscape with agencies running on pure performance deals taking a big hit "said Lyndsay Menzies, Managing Director of bigmouthmedia UK.
"Our international offices have been working with such a system in the US for years and we know how to deal with it, but the news is likely to precipitate massive changes in the market as brands move budgets about within digital channels to maximise return.
Bringing the UK and Ireland into line with its North American business, which has operated such a policy since 2004, from May 5th Google will allow open keyword bidding on all terms. This means it will now be possible for more than one advertiser to appear in the list of sponsored links that appears after a user has typed in a search query using a trademarked term.
While bad news for major brands, the move is likely to be good news for smaller competitors looking to close the gap, although a question mark now hangs over what effect it will have on the millions invested every year in keyword bidding. Industry commentators also believe that some major price comparison sites and aggregators could see advantages, while the change is likely to further fuel industry rumours that Google are planning to make a bid for Expedia.
This announcement is also likely to have a profound effect of all affiliate partners, with the ability to bid on competitor keywords greatly increasing the scope and range of their operations.
"Google's revised rules for UK and Ireland will add new layers of complexity to the search landscape. Look at affiliate marketing and PPC: many brands restrict their affiliates from brand bidding but these policies now need to be reviewed," said Andrew Girdwood, bigmouthmedia's Head of Search.
"It may now make sense to let affiliates brand bid, compete using trade names against brand competitors and bring a stable cost-per-acquisition model to the auction market that Google has just made volatile."
