Reseller Questions (Part 1): When is it OK for Resellers to Bid On Your Terms?

Jennie Scholick Aug 26, 2014

When it comes to brands that that both sell their own products and work through retail partners, issues surrounding brand bidding can be complex and confusing. While we have written about these issues before, both in our Report on Hotels, OTAs, and Paid Search and in a blog post we published in January, the fact of the matter is that there is no single answer or absolute best practice. On the one hand, resellers bidding on a brand’s terms allow that company’s products to dominate the search results and increase the chance of a sale. On the other hand, partner bidding may cut into profits and potentially harm your customers’ experience with your brand. Direct sales may be lost, customers could have negative experiences on your resellers’ sites, and resellers may even make false promises in their advertising.

This post is the first in a series that will delve into this issue a little more deeply. We will explore the question we posed earlier this year--“when is it okay for resellers to bid on your brand terms?”--in hopes of suggesting some best practices. Posts will approach this question from a variety of industry angles, including consumer electronics, fashion, housewares, and telecom.

In this first post, I am going to lay out some of the broad issues pertaining to partner bidding as well as provide examples of the most common, uncomplicated things we see in the course of our regular monitoring.

What does partner bidding usually look like?

Let’s say I’m looking to buy a new KitchenAid mixer for a friend’s wedding this summer. I type “kitchenaid mixer” into Google and get the following ads at the top of my results page:


KitchenAid

The first listing is for KitchenAid’s own website, directly linking me to their mixer order page. The next two ads are for KitchenAid authorized retail partners: Macy’s and Lowe’s. Both links take me to the respective retailer sites, with the Macy’s site filtered for KitchenAid and the Lowe’s site listing KitchenAid products ahead of other competitors.

So what’s the problem?

In this case, there technically isn’t one. The above result is just about the best case scenario for partner bidding: KitchenAid’s own site is ranked first, followed by authorized, comparably-priced retailers highlighting their brand. Any competing brands are shut out of the results and KitchenAid has a fairly high chance of converting a sale.

There is, however, a potential downside for KitchenAid. For one, the company may miss out on a direct sale, potentially minimizing the efficiency of the sale and directing customer loyalty toward the retailer’s brand rather than their own. Additionally, because Macy’s and Lowe’s (as well as many others) are bidding on their brand, PPC costs for KitchenAid are going to increase.

When can partner bidding go wrong?

Although the impact of partner bidding on the brand is fairly neutral in this case, a variety of other issues can crop up around partner bidding that are far more complicated and can potentially do substantial damage to a brand. Here are just a few questions to consider:

  • What happens when a partner outbids a brand?
  • What if the partner makes misleading claims in their ad copy?
  • If the partner’s landing page is not brand specific?
  • If the partner provides a poor customer experience?

The upcoming series of posts will provide examples of many of these scenarios and dive deeper into their potential impact on your brand, as well as offer some suggestions on how to monitor this activity and minimize its negative effects. If there are any specific questions you have or topics you’d like to see covered, let us know in the comments below or by reaching out to us!

Topics: Affiliate Marketing, Trademark and Law

What you don't know will hurt you. Start monitoring and protecting your brand.
Don't Miss Out

Get the latest insights on brand protection, compliance, and paid search delivered right to your inbox.