What is Deceptive Keyword Bidding on Google AdWords?

This is a common puzzle because there appear to be two classes of people that advertise through Google AdWords, those that bid on a half-dozen keywords or so, and those that bid on thousands of keywords at a time, if not hundreds of thousands.

But let's start at the beginning. When you see Google AdSense advertisements show up on a page -- as you do just above on this page -- Google's ad engine has ascertained a primary topic and keyword phrases for a given Web page (or, in the case of a search engine results page, it's keyed off the actual search terms used). Google has a massive storehouse of advertisements each of which is associated with some number of keywords, as few as one or as many as thousands of combinations.

Further, keywords can be exact matches, phrase present matches and broad matches. For example: [camera lens] is an exact match and that advertisement will only be shown when someone types in the search "camera lens". Not "lens for camera" not "nikon camera lens". A phrase match looks like "camera lens" and matches "nikon camera lens", but not "lens for camera", and, finally, camera lens will match the search "repair lens for nikon camera".

For each keyword associated with an advertisement, advertisers bid, that is, they indicate how much they're willing to pay for each click-thru resulting from that ad being displayed. As you might expect, the bidding required to be a top ad listing for a keyword like "buy digital camera" is going to be quite a bit higher than for [best preschool in Omaha].

So we've gotten through the basics of AdWords. Now let's talk about deceptive bidding. If you agree that those ads can be pretty effective -- and they are to a remarkable degree -- then it stands to reason that someone advertising would want to have their ads show up for as many relevant keywords as possible. If you're selling spyware removal software, for example, you'd want to have your ad show up for as many related searches and on as many spyware-related pages as possible.

Now, what happens if the company advertising spyware removal software starts bidding on keywords that aren't related to their product, in the interest of garnering more traffic. Not a great strategy and AdWords self-corrects because ads will be dropped if their display-to-click ratio goes too low. But... what if a company bids on keywords that are for a competitor?

My colleague Wayne Porter of Revenews brings up just this problem in his recent article Deceptive Term Bidding in the Spyware Space, wherein he decries that "it causes us deep concern when we have to explain to customers that the program they thought was ours, and purchased from a deceptive ad, had nothing to do with us at all. This is not just trademark infringement this is COMMON SENSE. If an ad says Find Peanuts here and you click through and they sell you motor oil...well you get the idea."

The gist of Wayne's complaint is that when people searched Google for his company's domain name spywareguide.com that an advert for Yahoo's free anti-spyware toolbar popped up through AdWords and that it was somehow misleading for Yahoo to have an ad tied to their domain name.

But I cannot agree with him. First off, Yahoo and other spyware companies might well have bid on broad terms like "spyware" but bid very low, so that a search for "spywareguide" or "spyware guide" wouldn't show Yahoo on the first page yet show up near the top on more narrow searches like "spywareguide.com", but in the general, there's no trademark violation and I just don't see where there's any conflict or deceptiveness.

Trademark-wise, Google no longer prohibits bidding on competitor's trademark symbols and brand identity anyway. According to Google's trademark policy, "As stated in our Terms and Conditions, advertisers are responsible for the keywords and ad content that they choose to use. We encourage trademark owners to resolve their disputes directly with our advertisers."

Don't get me wrong. There are clearly cases when companies have deceptive advertisements and are exploiting the system (an example would be if a third party manufacturer bid on "ipod case" and then had an advertisement that presented themselves as Apple Computer itself). But I think Wayne's tilting at the wrong windmill here, Quixotically.