Reseller Questions (Part 2): What are the Dangers of Partner Bidding?

Jennie Scholick Sep 2, 2014

The issue at the core of partner bidding is the lack of control that brands have to enforce rules and regulations regarding how resellers use their brand terms. This blog post will look at what harmful partner bidding most often looks like and begin to explain the options a brand has to protect against it. Future posts will go into more depth about industry specific types of problematic partner bidding and the steps that a brand can take to minimize the impact.

For a moment, let’s summarize our KitchenAid example from the previous post. That example showed us what seemed like an ideal situation for the brand. In it, the resellers’ ads had the following characteristics:

  1. appeared below the brand’s own ad on the SERP
  2. provided a link to a brand-specific product page, and
  3. gave the consumer a positive customer experience.

A less ideal--or even downright bad--situation looks more like this:


KitchenAid-Bing

In this case, a search for “kitchenaid.com” (spelled correctly even!) on Bing resulted in an ad for PartSelect.com at the top of the page. In this case, we see someone using a search engine as a navigation tool but the first hit she sees is not the website for which she was looking. That’s not a great situation for KitchenAid: they should want their ad to hold that top spot.

What makes it worse is that while PartSelect.com does sell KitchenAid products, they don’t sell basic consumer appliances--which are probably what most people searching for KitchenAid are looking for. Instead, they sell parts to fix one’s KitchenAid appliance. If that is what the consumer is looking for, great; if not, he or she may come away feeling frustrated at the experience.

An even worse example can be seen in the following image:


KitchenAid-mixer

In this case, someone searching for “kitchenaid mixer” on Bing gets four search ads above the organic results--and only one of which is a retailer of KitchenAid mixers. Both PartSelect.com and SmallAppliance.com sell parts, but not mixers, and Calibex.com is a comparison shopping engine, leaving only the Macy’s link as a true reseller of KitchenAid consumer products.

The downsides are numerous for KitchenAid in this instance: competitive bidding increases the price of their keywords, customer satisfaction and loyalty will decrease, the increased friction may lose them a sale entirely, and the list goes on. While there are advantages to allowing partner bidding by reputable retail channels, there needs to be a coordinated process so as to filter out negative results like those shown above.

So why isn’t this just standard trademark poaching?

A lot of brands probably see this kind of keyword bidding as exactly that: incontrovertible trademark poaching. But it’s not really that simple.

First, the terms of service enacted between resellers and brands often don’t include restrictions on bidding on brand names. And, as mentioned in our first post on this topic, there are good reasons to want at least some of your resellers to bid on your terms, so putting those kinds of terms in your agreements requires careful forethought.

Second, because these sites are indeed selling KitchenAid products (albeit, not the exact ones that a consumer is searching for), in Google or Bing’s eyes, these companies are entirely in the right--they sell the relevant brand, therefore they can advertise it and bid on brand terms. The fact that the brand might feel differently (is selling KitchenAid parts the same as selling a KitchenAid mixer?) has no bearing on the search engines’ policies. Google, for example, clearly states that if “The ad's landing page is primarily dedicated to selling (or clearly facilitating the sale of) the components, replacement parts, or compatible products relating to the goods or services of the trademark” then it is allowed to use a brand’s trademark in its ad text.

Ways to Prevent Harmful Partner Bidding

So what can a brand do? Monitor, monitor, monitor. Knowing what keywords are being bid on by partners allows a brand to alter both their own bidding in paid search and potentially change terms of service agreements with resellers when they come up for renewal.

Do you encounter this kind of partner bidding? What’s your technique for encouraging positive and avoiding negative partner bidding? Let us know in the comments below or contact us directly at BrandVerity!

Topics: Affiliate Marketing

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