Does Your Affiliate Program Add Value – Part 2 – Trademark Bidders

So in the second part of my series, Does Your Affiliate Program Add Value, I want to cover Trademark Bidders.  They are those people that “only want to poach off of people who are already your customers, have seen your ads or are in your shopping carts but leaving to look for a coupon”….so can they actually be good instead of just taking from your own current customer base?  The truth is that in some situations Trademark Bidders can be very good for a company and add a ton of value, you just have to know how to work with them and how to manage them.

The Bad About Trademark Bidders.

The truth is, at least in my opinion, is that trademark bidders do not have your best interest in mind.  They are only going to send people to your site through PPC by bidding on your trademarks, which means these “customers” are technically already customers of yours or already know about you.  They aren’t sending you anyone new or introducing anyone new to your site.  Many of them will never run real PPC on generic and long tail or non-trademark terms.  Unfortunately there are tons of them out there and they do everything from day parting you out, to geo targetting so that you never see their ads or how they are driving sales.  What you can do however is use Brandverity.com, which is my personal favorite trademark bidding monitoring software.  So lets go over the bad types of trademark bidders and then the situations where trademark bidding can be a good thing.

• Bidding on your domain name – If someone is bidding on your domain name, the customer is someone who was typing it in to go to your site already.  Many people type the domain name into Google or Yahoo or Bing instead of their browser window, and when they do, the Trademark bidder takes advantage and shows an ad.  The ad will either take the person directly to your site, or possibly to their site first or to a redirect from their site.  In this situation the trademark bidder is not adding value.  In fact if they show a coupon code after the trademark bid, they are not only taking someone who was already going to your site, but they are now reducing your margin by the cost of the coupon, their Affiliate commission, the network fee and any manager or management fees you are paying.
• Bidding on your trademark, but not the domain – If your trademark is specifically only about you and you are the only Merchant that sells the product or service for your trademark, or it is very unique name wise so that the person obviously knew about you ahead of time, the Trademark Bidding Affiliate is probably not adding value.  It is a very similar situation to the scenario above.  The person knew about you and you spent your time and money getting them to find you.  Now the trademark bidder is just trying to make money off of your hard work.  That does not add value.
• Bidding on your trademark plus coupon code – This is one where there is almost no value added to you as a Merchant.  The reality is that if someone is already looking for your domain + coupons or your trademark + the words coupon codes, they are ready to shop and already your customer.  By having an Affiliate bid on terms like bluewidget.com coupons, they are only poaching and reducing your margins from a customer you have spent money on or worked hard to bring in yourself.  They could also be overwriting a cookie from another Affiliate who referred the new customer originally.  In this case, it makes your conversion rates look lower for the value adding Affiliates who send new customers and you will eventually lose them and be stuck with Affiliates who aren’t adding value.
• Your trademark plus location – One of the other ways that trademark bidders make money is by bidding on phrase and exact matches like your store name + city or town name.  For example Walmart Washington DC.  They may also geo target this one.  By doing this it becomes harder for you to catch them and they still can earn an easy profit.  In my opinion, this does not add value either.

The good in Trademark Bidding Affiliates.

So now that we covered some of the bad aspects about trademark bidding Affiliates, here is the one situation where I think it can be beneficial to the Merchant.

When your company name is extremely general or your url is like weddinggifts.com or halloweencostumes.com, you are going to have a ton of people bidding on it regardless.  They will not only bid on terms like blue widgets which is general, but they will also try bidding on bluewidgets.com.  In this case you will find that it is expensive to cover yourself on your own company names.  There will be competition bidding on these terms and you probably want as much of the real estate as you would want to have.  This is also true on one word domains which are also general.   Having trademark bidders bid on the terms, but not your url can benefit you because they will give you extra space in the paid ad space.  So here is what I recommend doing to gain as much space as possible with as little damage to your own margins as possible.

• Allow trademark bidding, but put in restrictions so that Affiliates are not allowed to link directly to your site.  Instead they have to link to their own sites and they are not allowed to offer coupons or discounts.  This gives you more of the available spaces in the PPC advertising spots.
• If there isn’t much competition bidding on yourdomain.com, then you should probably put in a second restriction that says you can bid on the general term “blue widgets” but you must add the domain name and misspellings of the domain to your negative keyword list.
• The next restriction I would place is no bidding on yourdomain.com + coupons, coupon codes, etc… That is a trademark bid that is specifically trying to poach someone from your shopping cart.  However if you have a single word domain like Christmas or Halloween, then if they aren’t bidding on the url but the general term like Christmas Coupons, then I would say that’s ok since there is a natural search volume for it anyways and you want coverage both in the SERPs and PPC space.

99% of the time trademark bidding is not a way to add value to your Affiliate program.  Instead it takes credit for sales you would have had anyways, but in a way that is much less severe than adware.  There are a couple of situations where trademark bidding can be beneficial, but they are much fewer than you will be lead to believe.  If you found this post helpful, subscribe to my newsletter to receive the rest of the series, as well as my other posts via email the minute they go live.  You can also share it on Twitter, Facebook, Sphinn, etc… if you’d like, or just leave a comment below.  The next post in the series is on adware and parasites.