Interflora Vs Marks and Spencer – Adwords row

Some of you may haven heard in the news today about the Interflora Vs Marks and Spencer row, over the use of the search term ‘Interflora‘:

This screen clipping was taken a few moments ago, and as you can see, in the ‘sponsored adwords’ listing, both Interflora, M&S, and ASDA are all bidding on the search term ‘Interflora’, in the ‘Pay Per Click’ ‘sponsored links’.

Firstly, from the people I’ve already spoken to today, there is some misunderstanding between paid listings, and natural listings:

  • Natural listings are the search results that appear with a white background, on every search results page.  Whereas sponsored listings are paid for advertising links (which may or may not take you to the product or service you’ve searched for).
  • Natural Search listings can be improved through having a great website, and naturally working on your Search Engine Optimisation (SEO).  This are the most valuable placements to have, as many users will prefer to click on the natural links, rather than the paid links.
  • The PayPerClick (PPC) advertised listings, as seen in the above example (with the faintly shaded background) are the search results which either appear above, or to the top right of every search page. 
  • With PayPerClick, Companies can thus pay Google (which is part of the reason the stock value of Google is so high) to appear high on this listing.. the more you offer to pay Google for each person who clicks on your link, the higher in the rankings you will appear.

The minimum bid is 1p (or in reality it’s more like 2p), but there is no upper limit I’m aware of (you just need to work out the value to yourself of someone clicking through..

  • If you have a product that sells for £10, and you make £1 profit on each item: if 10% of the visitors to your website purchased one item, then the value to you of each click would be 10p (so you’d need to set your bid to a lower value to ensure you can still cover your costs, unless of course this £10 product is a ‘loss leader’ to help get customers to buy other products too).
  • However, if your product sold for £10,000, with a £2,000 profit margin, and 10% of the visitors who visited your site from your chosen search term, then the average value of each click would be £200, so the amount you bid on each click could of course be much higher.

This is the reason why companies cold call many businesses, and guarantee you ‘first page on Google’.. this is easy, if you pay enough for the relevant search term, you can appear as high as you like for those search terms.

However, the interesting thing about this case is that Marks and Spencer are using a worldwide registered trade-mark as a means to promote their own competitive services (even though the trademark phrase itself doesn’t appear in the advert, nor on the associated page with it).

I know that Red Letter Days used to be very clear to their resellers, that as part of the agreement to resell Red Letter Day vouchers, the resellers were not allowed to bid on the search terms directly related to their brand (ie ‘Red Letter Days’).  However, in this case, M-and-S have not entered into such an agreement, as they are attempting to sell their own competitive product/service instead.

So it’s understandable for the case to now reach the high court.  Trademark and Copyright rows are rarely simple.
By my understanding, you are typically only allowed to quote someone else’s trademark; with their permission, if you are a licensed reseller of their product (ie Starbucks coffee), or for a news feature or similar.

But then, many trademarks/brand names have become a generic description of a product (ie ‘Tannoy’ rather than a ‘public address system’, ‘Hoover’ rather than ‘vacuum cleaner’, etc.) so in these cases, you could argue it would be ‘fair’ to associate your competitive product or service with such a name.

I look forward to seeing how the case continues.