An advertiser on Google used keywords of a competitors to show their ads in Google Adwords. This is quite common. But then what they did was to use these keywords as the headline of their ad. I would regard this as unethical. The businesses involved were two car companies, Kloster Ford and Charlestown Toyota. The company using their keyword phrases (the actual business names) was Trading Post, a competing business. What Trading Post did that was unethical, was to have in the headline of their ad, the names of their competitors’ businesses. So that people may have clicked on these ads thinking they were going to Kloster or Charlestown websites, only to be taken to Trading Post. (More here.)
Trading Post settled with these businesses, but it didn’t stop there. The ACCC then decided to go after Google for allowing these ads to appear in the first place, and also for not making sufficiently
clear the difference between advertising and organic search links.
As an advertiser on Google, I do have some strong opinions on all these matters.
Firstly, I believe that the Trading Post use of the business names of its competitors in the headlines of its ads was deceptive conduct. This was passing themselves off as their competitor which is not only unethical, it is also illegal. However, I am unsure whether this was deliberate. One of the little known features of Google Adwords is the ability to insert the chosen keywords into the ad headline automatically. So you may have a hundred keywords, and rather than writing out a hundred ads, one for each keyword phrase in a headline, you can do it once. So Trading Post may have identified this as a keyword phrase they wanted, and it automatically was added to the headline. I would regard this as careless, or even negligent, but maybe not deliberate. But, of course this is wide open to debate.
The second issue is the use of others keywords, so your ad appears alongside your competitors. Now, as long as you are not passing yourself off as your competitor, I don’t see this as such an issue. It is like parking a car with your signage on it in front of your competitor’s store in a public parking space. They may not like it, but it is not illegal. As long as the signage says nothing defamatory, this is ok. I may not do it myself, but in the commercial cut and thrust, it is ok.
If you type in well known brands of cars such as BMW, you will see ads for other car businesses. But unless they are trading in BMW’s you won’t actually see the name BMW in the ad. What Trading Post did, was to use their competitor’s name in their headline- a step too far.
Putiing aside the morality of this, I also question the value of this type of advertising. If I type in “Kloster Ford” and I click on a headline saying “Kloster Ford”, it is pretty clear I am looking for their website (as opposed to just Ford Dealers). So if I get diverted to Trading Post, I am probably going to be annoyed. Not a good first impression for your website visitors to have! The marketing value of being on the same page, but without the name “Kloster Ford” in the ad is more debatable. Since in adwords, you only pay if someone clicks on your ad, if you have a compelling call to action, there is little downside. Unless the ACCC decides to get involved!
While the issues with Trading Post are fairly straight forward, the question of taking on Google is less clear. They are being held to account because they allowed this type of advertising in the first place. The only way that Google could stop this kind of advertising is with human screening of the millions of ads on their website. And even then, they would not stop the really determined. We have also seen similar issues with people unethically putting ads in eBay. It is my belief, that there should be an easily accessible complaints process to Google where someone feels they have been hardly done by, with Google sanctions: like ejection from their search engine- for the worst offenders. This is probably the best penalty you can think of. It would be like being barred from the Yellow Pages.
If the ACCC is successful, and I am sure this would be appealed if they were, you would have the situation of a small market trying to dictate to Google. May they then introduce special pricing to Australia, or maybe just decide just to make their search engine unavailable here.
The other ACCC complaint is that there is insufficient differentiation between organic and paid listings. I believe they are clearly marked, and the statistics are that organic listings are three times more likely to be clicked on than the ads. So I think that is a clear sign that most users can differentiate between the two as well.
Another point is that you can optimise your website (or I could anyway) so that you are on the front page in organic search. So is there really any difference in the end? It is all advertising.
This case is being watched worldwide as it has major implication for the search engine industry.
Over to You. What do You Think? Post Your Comments Below.
Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems.