Brand Names as Keywords in Sponsored Search Advertising

The business models of major Web search engines depend on online advertising, primarily in the form of keyword advertising. In recent years, a controversy has gained notoriety worldwide, in both the international court systems and the media. It concerns a form of potential “bait and switch” advertising where a consumer, searching using the brand name of one company, is presented with an advertisement by a competitor of the searched-for brand. We refer to this practice as “piggybacking.” In the U.S. in particular, the legality of this practice, and the potential liability of the search engines for contributing to trademark infringement, is unclear. However, the eventual resolutions of the issue could significantly and negatively impact the business model of Internet search engines. In this paper, we investigate the actual prevalence of piggybacking of major brands in U.S. search engines. We submitted 100 search queries consisting of top global brand names to three major search engines. Analysis of 2,350 advertisements from search engine results pages showed that just 4 percent were triggered by competitors’ trademarked terms. There was even lower use of those trademark terms in the ad text. Thus, overall competitive piggybacking does not appear to be a deceptive or widespread phenomenon. Implications for this are discussed, and suggestions for future research are presented.