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Online Search Impact of Third-Party Trademark Usage

Study on Google's 2009 policy change allowing resellers to use trademarks in ads, impacting trademark holder clicks and clutter. Management insights on combining legal and marketing in online trademark policies.

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Online Search Impact of Third-Party Trademark Usage

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  1. How Does the Use of Trademarks by Third-Party SellersAffect Online Search? Lesley Chiou and Catherine Tucker

  2. When searching for the trademark doubletree on Google

  3. Search engines have turned trademarking policy upside down. • Resellers of branded products often want to match and personalize their ads to someone's search by using a trademarked brand name. • Brand name trademark holders’ lawyers do not like this. • We study empirically whether they should

  4. Study Policy Change on Google • Google changed its policy in June 2009 for search advertising • Allowed resellers of goods to use other firms's trademarks in the ad copy • Other search engines did not change their policies and act as control group

  5. What we find • When resellers were allowed to use trademark in their ads • Decrease in paid search clicks for trademark holder's ad • Increase in people clicking on the trademark holder's main (non-paid) listing • Advertising clutter literature can explain this • When all ads look alike customer tend to ignore them

  6. Managerial Insights • Trademark policy online should not just be governed by traditional legal issues but also marketing considerations • When others feature a firm’s trademark in their ads, that this can benefit their trademark holder • Therefore firms should consider benefits of loosening their trademark policies online

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