Advertisers Threaten Google over Search Oversight

04 June 2008

MOUNTAINVIEW, California: Google is facing growing unrest among its larger online advertisers over its perceived tardiness in tackling the problems of "piggybacking" - a practice whereby smaller marketers lure web users to their own sites by using major brand names or taglines in the text of their search ads.

The search titan insists it has the situation under control, but advertisers such as Marriott International, InterContinental Hotels, American Airlines and others claim use of their names in the text of other companies' search ads confuses customers and increases their costs.

They are now threatening to review their entire online presence, which could impact on Google's increasing expansion into display and video web ads.

Declares Michael Menis, Intercontinental's vp of global marketing services: "This does play into our decision of overall spending - it has to."

The company allocates more than half of its online marketing budget to search ads to generate sales. "Any research will tell you search is the place where people research travel," adds Menis.

John Gustafson, director of distribution and internet strategy at Northwest Airlines insists: "If Google has an inability to help us resolve issues about abuses of our brand, that would impact our decision to participate in future forms of advertising."

Google says it investigates claims of piggybacking and tries to stop the practice.

Proclaims product-management director Richard Holden: "We have a long-running policy where we don't allow advertisers to use trademarked terms in ad text to avoid creating any user confusion."

Professor Eric Clemons, from the University of Pennsylvania's Wharton School believes piggybacking is a significant problem for big online marketers and, if it continues, companies will have to pay more to advertise in search engines because rising demand will force up the cost of key words.

Some marketers are demanding that Google and its search rivals, like Yahoo and Microsoft, create an automatic system that will permit advertisers to use other companies' names and slogans in the text of search ads only if they have permission.

But Google insists its system works. Claims Holden: "We are trying to balance advertisers and trademark owners and user interests."

Data sourced from Wall Street Journal Online; additional content by WARC staff