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Weekly UpdatesNumerous third-party travel vendors have made a practice of using hotel chains' trademarks in the course of posting offers on the websites and in search engines. A problem occurs when the hotels' trademarks become part of sponsored links posted by the third parties, because customers who seek a particular chain may be "hijacked" to a third-party site. Searches on two leading search engines, Altavista and Google, found that organic (nonsponsored) searches for specific hotel names returned the hotels' names two-thirds of the time. However, sponsored links appeared around the organic results three-quarters of the time. The study found that 183 third-party firms were using pay-per-click advertising in hotel searches, and 14 of those were competitors that had bid on hotel chain's keyword triggers. The remainder were online intermediaries of various kinds that not only bid on trademark terms but also used those trademarks in their advertising copy.
Having outlined the legal position in relation to the use of trademarks in pay-per-click advertising, this study investigates trademark use in hotel searches. Using a randomly selected sample of ninety hotel properties worldwide, searches were performed on two leading search engines to investigate whether third parties were using hotel trademarks in their paid placement. Findings indicate that abuse is rampant. While hotels perform well in organic search, they are usually preceded by or surrounded by paid listings abusing their trade names. Customers are potentially being diverted to competing websites, and urgent action is needed to reclaim hotel trademarks in the online search environment.
Keywords: search engine marketing; trademark abuse; hotel sector
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Since its launch in the early 1990s, the worldwide web has continued to grow at a phenomenal rate. Although its rapid expansion and unstructured nature make it difficult to measure, a recent study has estimated that the web has grown from approximately 1 billion web documents in 2001 to more than 11 billion in January 2005 (Gulli and Signorini 2005). Navigating this ever-expanding sea of data has become a considerable challenge. Search engines--sites that maintain indexes of web content--facilitate such navigation by allowing users to specify words or phrases and returning a list of pages that potentially match the user's information needs. Google, the world's largest search engine, is estimated to have indexed more than 8 billion pages (Sullivan 2004c) and to be used in nearly two-thirds of consumer searches (Hitwise 2007).
At first, search engines were unbiased by commercial considerations and, thus, displayed results that provided the most relevant answers to user queries (Sullivan 2002). Even when advertising appeared on pages, the ads were generally banners displayed across the top of the page and were clearly differentiated from search results. Today, however, search engines are struggling to meet the substantial costs of maintaining their databases and improving their technology (Princeton Research Associates 2002). For this reason, many now market their ability to route consumers towards specific websites (Martin 2007). Like tour guides supplementing their income by bringing potential customers to restaurants or gift shops, many search engines now actively direct users to sites that have paid for placement on their results pages (Lastowka 2002).
In most cases, such paid placements, as they are known, are based on advertisers competitively bidding for the keywords under which they wish to be displayed on a pay-per-click (PPC) basis. For example, an online sports retailer might wish to appear whenever users enter "running shoes" as a search criterion so that anyone searching for these words would be directed towards that site. Controversy has arisen in this regard, however, over the use of trademarked terms as keywords, because of the potential for competition with the owner of the trademark. For example, absent a specific arrangement with the manufacturer, can the online shoe retailer bid on the keyword "Nike" or use the trademark "Nike" in the text of its sponsored link, if it thus potentially diverts shoppers who might otherwise have bought directly from Nike.com, the website of the trademark owner?
While trademark use is still a developing subject, this article examines the legal and ethical position surrounding the use of trademarks in paid search engine advertising. Furthermore, given the importance of search for travel distribution, the article surveys the use of trademarks in paid advertisements displayed during searches for hotel properties to establish whether hotel trademarks are currently being abused by third parties in the paid search environment. For context, I begin with an overview of search engine marketing, followed by a discussion of the legal position surrounding the use of trademarks. Having reviewed the research methodology, I outline selected findings from the study and offer recommendations for industry practitioners as to how to better protect their brand in the online environment.
Search Engine Basics
Search engines have become an essential tool, with search volumes increasing at more than 20 percent per annum as users seek information on the web (Sen 2005). However, research has shown that the vast majority of searchers do not look past the first page of results (iProspects 2006), and few engage in search refinement such as query reformation (Zhang and Dimitroff 2005). Furthermore, research by Granka, Joachims, and Gay (2004) shows that searchers view the results listing linearly starting from the top and click on the first "promising" link. The chances of being considered drop considerably after the top five, a situation attributed to searchers' disinclination to scroll down. Thus, gaining a favorable position in results listings is vitally important for anyone wishing to gain exposure to the online consumer. Search engine marketers use two main techniques to try to ensure favorable positioning. Search engine optimization (SEO) focuses on manipulating site structure and content so that one's link is be naturally ranked highly under particular search terms, while paid placement instead pays for position, as will be discussed below.
Organic Search Engine Optimization
Search engines use specialized software programs, known as spiders, to crawl the web, classifying each page they encounter and adding it to their databases so that it will subsequently appear in search results. Marketers try to manipulate these spiders by modifying the HTML code of their pages (for example, the title tag, meta-tags, headings, or links) or their page content to try to convince the ranking algorithm to give the page in question a higher position than others displayed on the same search result listing (Sen 2005).
Organic SEO, as this process is known, suffers from several limitations. First, the search engine spiders' algorithms are both complex and secret, making it difficult to establish what modifications are needed for better positioning. Algorithms also change frequently, and thus any gain achieved may subsequently be lost. Each search engine stresses different issues, and thus optimizing for one engine may hurt positioning on all others. Last, the spiders must actually visit and reevaluate the pages for changes to be taken into account. Although spiders return periodically, it can often take several weeks for the results of an SEO campaign to become visible (Sen 2005). Thus the SEO process is time-consuming and costly, with little guarantee of success in terms of consistently high rankings. Marketers have to adapt to ever changing classification strategies to improve rankings or even just to maintain their current position (Pastemack 2006). Such limitations are driving many online marketers towards using paid placement.
Paid Placement
Instead of spending time manipulating site code or content with little guarantee of success, marketers can pay for positioning in search results (Sen 2005). Such sponsored links are acquired by competitively bidding on specific keywords, usually on a PPC basis (Sullivan 2004b). For example, if an advertiser wished to appear in top position for "running shoes," he might agree to pay 25 cents per click. If no one else offered to pay more, then he would appear in the top spot. If someone else later decided to pay 26 cents, then he would fall to second place, unless he subsequently increased his bid to regain the top position (Sullivan 2004d).
Several paid search networks exist, with the largest being Google AdWords and Yahoo! Search Marketing (formerly known as Overture) (Krol 2006). These are networks in that in addition to displaying ads within their own search results, they also syndicate sponsored listings to third-party sites (Sullivan 2004b). For example, Google places ads on the search results pages of other search engines (such as Ask.com and AOLSearch), next to email messages on its GMail system, and on content sites (such as the NewYorkTimes.com, HowStuffWorks, and MySpace), as well as a vast number of smaller sites that allow Google to crawl their content and integrate relevant ads into their pages in return for a revenue share as part of its AdSense program (Sen 2005). Yahoo! Search Marketing follows a similar strategy, with some of the sites it supports including Altavista, CitySearch, CNN, and National Geographic.com. Thus, the influence of being successful in paid search is much broader than just the ads that appear on the search engine's own result listings.
Sponsored listings are usually (but not always) segregated from organic search results and labeled as advertisements.
Google, for example, normally displays its PPC ads, known as AdWords, down the right-hand side of the screen, separated from organic results by a vertical bar (Burden 2005). Yahoo!, in contrast, displays its sponsored listings above and in the same format as its organic results, but with the term "sponsored" appearing in small text beside each link. Google also sometimes positions sponsored matches above its organic listing, but shaded in a different color to set them apart from organic search results. However it is questionable whether consumers actually distinguish between sponsored and organic results, especially on syndicated sites where differentiation is not particularly clear (Lastowka 2002). With traditional media like newspapers or television, consumers are able to identify ads as they usually look different to normal content and over time they have established criteria to help them determine which is which (Sullivan 2004a). On the web, however, sponsored listings have only become commonplace relatively recently, and thus users have not had much time to develop clues as to what is an ad and what is unbiased content (Sullivan 2002). According to Jansen, Brown, and Resnick (2007), even if searchers recognize a link as sponsored, they are unconcerned and will click on it if it is relevant.
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