How ethical and legal is PPC advertising from your competitors?
Companies are commonly using PPC campaigns that use specific keywords of products, trademarks, and trading names that they do not own, simply as a competitive advantage. Is this an issue? If so, what can be done? If you report it, are companies going to act appropriately?
Definitely seems to be an issue with copyright and TM. A company would have a right to sue a business riding on the skirts of their good will. The first notice is normally a warning to refrain from using the said company's name and to remove the ad. Next course of action is a legal notice for trademark violation.
This is known as "brand jacking" and is no different that radio or TV commercials that call out a competitor (call it "Brand X") and they compare and contrast their product or service with that of Brand X.
This practice of marketing is old as the dawn of time. It can be effective as long as your SEO or marketing adhere to Google guidelines.
Ray Badger's delineation is spot-on. However, we should leave legal questions to the lawyers. I have an opinion, of course, but I'm not qualified to respond to that issue in a legal context.
On the ethical side, it is, of course, dead-wrong to use someone else's intellectual property without permission from the owner(s). I suspect a letter or e-mail from a lawyer to a transgressor will stop most instances of abuse. However, I hasten to add that I've never been in that situation.
I did encounter a situation a couple of years ago where a doofus in Australia purloined, word for word, a definition I had developed for 'strategy'. He obviously was a member of a LinkedIn group where I had posted the definition. When I called him on it, he got defensive and told me to 'prove it'. So I did. Never heard from him again.
He didn't change his behavior, of course. But I'm still on the lookout for any posts from him in groups of which I'm a member. I'll call him out in front of everyone if I see one.
He also applied to become a member of a 'closed' LinkedIn group that I founded in 2013. Needless to say, I turned him down. He didn't like it. Tough. I told him I didn't knowingly allow 'crooks' in my Group. He really didn't like that. I told him that he had confused me with someone who gives a da** about what he thinks.
Google Adwords allows it and it is neither illegal or unethical.
What is both illegal and unethical is running an ad that gives the buyer the impression that clicking through will take them to a website selling the competitors product. It would also be ineffective and make potential customers angry.
Not only is using their name as a keyword ethical it is also legal and ethical to name them in your ad. "Comparative Advertising" is allowed pretty much everywhere in the world. As far as I know the UK was the last to allow it when they changed their trademark laws in 1994. Pepsi and Gillette are two companies with a long history of running comparative ads It's also quite common in the auto industry. To list your competitors and explain the advantages you have over them is fair and ethical provided you do not lie or mislead anyone.
If you use your competitors name as a keyword, it's best to make your ad headline very clear that you offer an alternative product. Not only is it better for the person searching, but it eliminates any claims from the competitor that you are trying to mislead people.
That this can be done unethically is certain. But trying to keep a competitor from doing something unethical is probably a waste of time and energy. Don't forget that when you purchase PPC keywords you're purchasing from the very companies that then turn their bots, robots, and spiders loose to bogus-click the very terms you've paid for. The other (ethical, but exasperating) result of using PPC to advertise is that when anyone searches for a keyword related to your business, he will get voluminous results: all your competitors on the same pages, and you might not have paid enough to even end up on the first page, yourself.
One of the ways to get around being victimized by unethical PPC practices is web banner-advertising. Up until about 6 months ago this was affordable only to the Fortune 1,000. Now it is affordable to much smaller companies, and is proven to be very cost-effective.
For a free report on how this works, go to http://www.amp-up.com.
It's not unethical (unless they're trying to confuse people). When someone is searching for a specific product are mostly looking for it to solve a problem they have. If they find other ways to solve the same problem they're better off for it and a more informed consumer. Avoiding discussion of competition leads to less informed consumers and a less competitive (and less efficient) market.
You appear to be asking two separate questions. What would you consider PPC advertising from your competitors? You appear to be asking whether you could have PPC ads from your competitors on your own site if you are running, for example, Adwords ads on your website. In that case, it would be both ethical and legal, but why would you want to do it?
On the other hand, after reading the details, I now understand the actual question you wanted to ask. You want to know if it is ethical and legal for, for example, Coca-Cola to run PPC ads for keywords containing the word "Pepsi".
I actually had a situation years ago where an SEO prospect was working on getting her website ranked for a similar product to hers, thinking that people who are looking for the competing product would see her website, and buy her product instead. With the advances that have occurred over the years, I don't think anyone could get away with trying this today, in either SEO or PPC. Even if they could, it probably wouldn't work.
Google doesn't like people who try to "game" the system, and their various algorithm updates should be proof of that. If someone is looking for a particular brand of product, Google wants to provide results related to that particular product and brand, whether in the organic listings or PPC. Therefore, if you are listing an ad under a particular brand of product, the web page you are linking to better be related to the product and brand being searched for.
Now let's look at it from the marketing point of view. If you want visitors to your website to buy your product, wouldn't it make more sense to list your ads where your potential customers are looking? Instead of trying to steal your competitors customers, your efforts would be better served working on getting your own.
Is it ethical to try to steal your competitor's customers? That's up to the individual, but I would say "No". Is it legal? I'm not a law expert, but I believe it is. In my view trying to steal your competitor's customers would alienate those you are trying to reach, would not bring sufficient results to justify the effort, and may even harm your reputation.
The reason to get a trademark is to protect your product/brand name. Using someone else's TM'd logo/product name with the intention of causing confusion is clearly a legal issue. Big companies routinely go after even the smallest infractions in order to protect their brand. There is no one to "report" such an infraction to -- other than the offending company itself -- with a letter from a lawyer telling them to cease and desist. If a name of a product isn't trademarked, you don't have the same protection -- which is the reason companies go through the trademark process. You can't protect keywords, so that's not an issue.
Ethics are in the eye of the beholder. Clearly, they're aware of what they're doing. I wouldn't imagine someone would stop just because you ask nicely.
There are two separate issues here. Legal is one and ethical is another. From a legal standpoint they could be required to list something to indicate that your product name is registered or trademarked but I do not believe it is illegal to use it in pay per click.
Ethical is another story and it is something I would never do but of course everyone has their own ethical standards.
For what it is worth one of my major competitors has a pay for click that should someone search for my product the first thing they will see is that "(his product) beats (my product)". It doesn't really. Do i complain or sue, no. Do I respect him, NO!!!!!. Do I care, not all that much it just makes me think more about ways to beat him in the market place but always with a high ethical standard.