Google and Ethics

    April 3, 2007

I have been consulting on internet marketing for over a decade. In my career I have seen many unethical things, from Fortune 500 companies performing many questionable actions, to observing sales agents selling on a fundamentally wrong foundation.

When doing consulting I like to debate and examine very complex issues regarding the marketing and sales cycle. When debating these issues, I always make sure that “ethical” and “legal” are clearly defined as separate things. In fact, I often see companies doing things that are unethical- yet legal (in this case, the legal issues are being argued).

Last week I was giving a consultation to a new client of ours that is a business with a national presence. We covered the basics of what they were doing for internet marketing, which included a variety of search terms and pay-per-click campaigns.

(SIDE NOTE: I endorse a variety of PPC campaigns depending on the needs of a specific client. Like any advertising there is usually a good foundation for specific and applied use of different marketing tools.)

In this case, the keyword being purchased was the trademarked name of the business itself. The organization has such authority and brand recognition that the average CPC of the keyword was $7.53. According to the Google Keyword Estimator Tool, a daily average of 45-60 clicks per day or an average daily budget of $550 was required to have the keyword.

Now looking at the results for this business, if you do a search for its single word proper name, all ten paid spots on Google are sold. However 50% to 80% of the spots are being sold to a different marketing and department group within the same company.

Why is this unethical?

At an average CPC of $7.53 and 45-60 clicks a day per spot, that is an average budget of $550 per day, $16,500 per month, or $200k per year, per spot.

That equals an annual revenue of over one million dollars in advertising sales for Google on the Trademarked name, which is not being sold to competitors or news sources, but to the very company who owns the name.

Google has managed to create an audience where marketing folks within the same organization are bidding against themselves without having a complete understanding of who they are bidding against. Take, for example, two marketers in the same company unknowingly bidding against each other.Marketing Agent A in the Northwest office is bidding against Marketing Agent D in the Southwest office. Both A and D suffer, while Google generates ample amounts of profit and the prices continue to raise.

Someone should really be looking at those ads and figuring out if they are authorized sites and branches of the same business (and if so, why they are spending so much on a search term they own the top results for anyways) or if they are competitors that are placing advertisements on a trademarked name.

Google has an official trademark policy for TM violation. They are kind enough to detail how to remove the TM violation, but they are also kind enough that they fail to mention issues like these are being argued in courts around the world.

If your company has a presence that has national name and brand recognition, someone in your marketing group should be spending a few hours of their time drafting an official company policy regarding competing against pay-per-click campaigns of other departments or resellers. In the case of the example of Marketers A and D, their business, failing to implement such a policy, could be costing itself over a million dollars a year.

Google is laughing all the way to the bank. The client in question already has the organic results for the first eight sites on the page when you search for the proper name. I am having severe difficulty coming up with a reason why any business would spend a million dollars or more buying CPC ads that they already have results for.