Who Says Users Don't Want Competitors' Ads in Search Results?

from the complex-markets dept

A couple of years back we noted that the Utah legislature was considering legislation that would have banned companies from buying search ads related to their competitors' brand names. EFF and others said the law was likely unconstitutional, but the legislature passed it anyway. The legislation was such a disaster that last year the Utah legislature repealed it. Incredibly, despite all the negative publicity the 2007 bill received, and despite assurances from legislators that they'd learned their lesson, the backers of the legislation haven't given up. This year they introduced yet another bill restricting keyword advertising that passed the Utah House but died in the Utah Senate a few days ago. Given the tenacity of the bill's sponsors—1-800-Contacts is reportedly the leading backer of the proposal—the proposal may very well come back in future years.

Proposals to regulate keyword advertising have come in for a lot of criticism, but one person who's willing to defend the Utah proposal is Harvard's Ben Edelman. He argues that the Utah bill is necessary to avoid consumer confusion. He suggests that when consumers search for a trademarked term (say, "Hertz"), they're expecting to see search results related to that company, not to the company's competitors. He argues that if a consumer really wanted results from a variety of different companies, she would have chosen a generic term like "car rental" rather than a specific brand name. But James Grimmelmann points out a couple of problems with this reasoning. First, it shows an awfully low opinion of the intelligence of the average consumer. More importantly, there are circumstances where a consumer wants to see ads for a firm's competitors. For example, a consumer may be considering buying a particular company's products, but might want to check out that company's competitors before making her decision. Searching for that company's name is a quick and easy way to find out which other companies consider themselves to be in the same market. In contrast, the customer may not know which generic terms precisely describe that company's market. In Grimmelmann's example, it might be easier to ask for all companies in the same market as "Godiva" or "Hershey's", rather than having to describe precisely which segment of the chocolate market we're interested in.



Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Coward, Mar 16th, 2009 @ 4:45pm

    a good example is the cotton swap market, most people in the west side of America call them "Q-Tips"

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Weird Harold, Mar 16th, 2009 @ 5:10pm

    Where this runs into problems is the Hertz example. If you know enough to know the brand, then the brand deserves the space. You should not be able to buy ads based on another company's name.

    Now, if someone types hertz rent-a-car, it would be more than acceptable to buy ads on rent-a-car or rent AND car, or some similar scheme.

    If I can't use a company's name in the meta tags or keywords of my site to attract business, why can I buy ads when people are very specifically looking for their brand?

    If the consumer wants more choices, why not type "companies like hertz" or "rent cars like hertz"?

     

    reply to this | link to this | view in thread ]

  3.  
    icon
    Mike (profile), Mar 16th, 2009 @ 5:40pm

    Re:

    You should not be able to buy ads based on another company's name.

    Why not? That's called effective advertising... being able to compare yourself to competitors when people are looking for competitor's products. That's why it's perfectly legal to have a supermarket offer coupons for competing brands near one brand.

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    ehrichweiss, Mar 16th, 2009 @ 5:48pm

    I was THRILLED!!

    I was thrilled a while back while searching for some martial arts videos on ebay and at the bottom(actually just below) of the list they had a link to a place that rents martial arts videos. Since I have no problem buying them, being able to preview them and then buy them was phenomenal since I didn't have to waste my money on piss-poor videos.

    Yes, I know this isn't exactly what you're talking about but this technically was like putting the competitor in the search results since the rental site was not an ebay seller. This was the most helpful thing I've seen from ebay in forever.

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Go Figure, Mar 16th, 2009 @ 6:10pm

    Searching

    Do yellowpages make a point to not put competing company ads on the same page?

    I didn't think so.

    In fact, they intentionally group like products for your convenience.

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    Weird Harold, Mar 16th, 2009 @ 6:38pm

    Re: Searching

    Show me the "HERTZ" page in your yellow pages, and then we can talk. There isn't one. It's a page called "car rental". As different as night and day.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Weird Harold, Mar 16th, 2009 @ 6:41pm

    Re: Re:

    Mike, standard answer. You own a McDonalds franchise. As each person comes in the door, a guy jumps out, hands them a coupon for Burger king, and offers them a free taxi ride to the door.

    Is that fair marketing?

    In the supermarket, the brands are together (all soups in the same area). There isn't an "only Campbell's soup aisle", so it doesn't work. I am sure that there would be issues if those coupons were stuck right on the competitors cans, or on point of sale material provided by the company.

    Again, shading something to make something else look right.

     

    reply to this | link to this | view in thread ]

  8.  
    icon
    Danny (profile), Mar 16th, 2009 @ 6:41pm

    They try harder - or at least they spend money advertising they do

    I may want to rent a Hertz and therefore type "Hertz" into my search engine. But it seems to me it is good practice to permit Avis to place an ad on my search results as they may have information to share with me that I never knew to inquire about.

    Giving consumers competitive information only increases consumer knowledge and, therefore, buying power.

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Michael J. Ryan, Mar 16th, 2009 @ 7:11pm

    What about...

    There are lots of instances where the trademarked name is the common term... examples: "Coke", "Zerox", "Q-Tip" (mentioned above). I may well want a competitor, and can think of more times I would want it, than not. I mean, I am perfectly capable of scrolling past an ad, to the search results when I am not.

     

    reply to this | link to this | view in thread ]

  10.  
    icon
    Mike (profile), Mar 16th, 2009 @ 8:16pm

    Re: Re: Re:

    Mike, standard answer. You own a McDonalds franchise. As each person comes in the door, a guy jumps out, hands them a coupon for Burger king, and offers them a free taxi ride to the door.


    Is that fair marketing?


    Hell, yes. So long as the other guy isn't standing on McDonald's actual property. But if he's on public sidewalk or something, then it's absolutely fair marketing. Why do you think companies are allowed to put billboards up directly in front of competitor's buildings?

    In the supermarket, the brands are together (all soups in the same area). There isn't an "only Campbell's soup aisle", so it doesn't work. I am sure that there would be issues if those coupons were stuck right on the competitors cans, or on point of sale material provided by the company.

    Wrong again, Harold! I should start keeping a WH is wrong counter. Actually, most supermarkets these days print out direct coupons in response to certain purchases. I bought some Liquid Plumr recently and I got handed a coupon for Drano on the way out.

    Again, shading something to make something else look right.

    Nope. Just pointing out how you're wrong again.

     

    reply to this | link to this | view in thread ]

  11.  
    icon
    Yeebok (profile), Mar 16th, 2009 @ 11:50pm

    Re: Re:

    I could be searching for a frequency measuring device .. and have my term misinterpreted for a company that rents the name being searched for.
    As a result I go for Hertz, get only Hertz rent a car ..

    By the same logic each advertiser should also get their own separate 2 page spread in the yellow pages. After all you don't want to see Joe's Plumbing when you're actually looking for Kym's Plumbing, do you ? :)

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    R. Miles, Mar 17th, 2009 @ 4:18am

    My $0.02 (bailout money spending)

    Who Says Users Don't Want Competitors' Ads in Search Results?
    Me, that's who.

    I don't want to see competitor results when I add a specific search criteria (and I'll dismiss the electrical unit relevance this time).

    If I wanted competition results, I would type "car rental", not a specific brand.

    This reminds me of the generic use of "Coke". When I type in "Coke" using Google, I see no competition ads for Pepsi, 7up, etc.

    Nor would I want to. When the use of keywords by competitors is allowed, Google takes one less step of becoming a less useful product when it's going to spend more time displaying competitor ads, rather than relevant information.

    But what the hell does my opinion matter. If Google is true to its word by returning results based on user input, then this should clearly show just how fucking stupid people really are when using the search engine as a tool.

    It's just a matter of time before Google because less useful to me.

     

    reply to this | link to this | view in thread ]

  13.  
    icon
    Steve R. (profile), Mar 17th, 2009 @ 5:23am

    Abusive "Search" Tactics

    It's fair game for competitors to be listed in the search results. What I find irritating and abusive are "fake" search results. For example, I was searching for a replacement watch battery through Google. I received a whole bunch of hits, but many of the sites didn't even have the battery in stock!

    Competition is good, but trying to entice you to visit a site when they don't even have the product being searched for is plain wrong. It defeats the whole purpose of searching! Besides, if someone pursues an unethical business tactic to get you to buy, they are probably unethical to begin with.

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    Weird Harold, Mar 17th, 2009 @ 6:19am

    Re: Re: Re: Re:

    Thanks Mike. You realize for Hertz, their name is their property? So basically, someone standing on their name is standing on their property.

    I would also say for a college graduate, you don't have strong reading skills. You got handed a Liquid Plumr coupon on the way out, fine. I said " I am sure that there would be issues if those coupons were stuck right on the competitors cans, or on point of sale material provided by the company."

    Your example is neither of those. Many stores coupon when you pay to influence your NEXT purchase, but not your current one.

    So sorry, you are wrong. Next time read my post, okay?

     

    reply to this | link to this | view in thread ]

  15.  
    identicon
    Chris, Mar 17th, 2009 @ 6:24am

    Competitors' Ads Benefit the Consumer

    My example: I was going to download a new version of a firewall program so I typed the name of the program into Google. Up came the web page of the company supplying the firewall program I was looking for but there were also some ad supported links clearly marked as such for the competition. One of the links was labeled as "Still using X? Try out Y." I clicked on that link as I have never heard of this product before and after looking over it I realized this product is much better then what I was using and I switched. I have been using the new firewall program ever since.

     

    reply to this | link to this | view in thread ]

  16.  
    identicon
    Weird Harold, Mar 17th, 2009 @ 7:40am

    Back on point for the article, "Who Says Users Don't Want Competitors' Ads in Search Results?" - users want lots of things. I drive a car, I would like free gas and tires, thanks. I like hockey, so I would like tickets in the front row to always be $1 and I want to be able to buy them 10 minutes before game time without a lineup.

    Asking consumers what they want isn't going to get you very good answers most of them time, because they usually want to pull the blanket to their side of the bed as much as possible.

     

    reply to this | link to this | view in thread ]

  17.  
    identicon
    Gene Cavanaugh, Mar 17th, 2009 @ 12:22pm

    keywords in advertising

    Agree again, Mike, but I will add that there is no customer confusion. If a customer searches for "Hertz", the customer will know that "Avis" is not "Hertz". The professor needs to retake his Constitutional Law courses.

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    Dan, Mar 18th, 2009 @ 4:41am

    Re: Re: Re:

    Wierd Harold

    This would rig true if the customer were at the McDonalds franchise but by searching on a engine the customer is effectively looking down the street and has yet to decide to go into McDonalds. If on his look down the street he sees Burger King or any other it is his free choice to go in and have a look. If BK happens to look more attractive due to there advertising then good for them.

    D

     

    reply to this | link to this | view in thread ]

  19.  
    identicon
    Anonymous Coward, Mar 22nd, 2009 @ 3:30am

    While competitor keyword ads seems OK to me, what is NOT OK is doing a site-scoped search and getting "sponsored links" that are not at that site occupying the first three of the ten results. In the little box at top right would be OK, but not in the main block of search results. Everything there should be from the specific site.

    If I search for "foo site:example.com" I'm clearly stating that I'm only interested in hits from example.com, numbskulls-at-Google!

     

    reply to this | link to this | view in thread ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Follow Techdirt
A word from our sponsors...
Essential Reading
Techdirt Reading List
Techdirt Insider Chat
A word from our sponsors...
Recent Stories
A word from our sponsors...

Close

Email This