Google Lawsuit Issues: What Is Brand Siphoning And How Does It Affect Mary Kay Cosmetics?
In Online Brand Protection, Google, Search Engine Marketing | 11 comments | permalink
My company’s co-founder, Tina Rawlins, and I, have a great deal of experience cleaning up the mess Google creates by allowing third parties to advertise on our clients’ trademarks. Today I am going to discuss Brand Siphoning, which is a form of Traffic Diversion, as outlined in our Brand Command methodology.
What is Brand Siphoning?
Angie McCloskey at MediaPost’s Performance Insider touched on this issue last month: “I am surprised time and time again when I search in Google and see that there are many large brands and advertisers who allow — and, more important, pay — their affiliates to leverage their brand name through paid search tactics.
They are unknowingly allowing this to happen, or are doing this because it is a no-risk media proposition to drive new customers on a performance model by their affiliates. Several years ago this may not have been a big deal, because paid search was not a mainstream “shopping” channel for consumers, but today, the majority of consumers use paid search as their preferred channel to begin their online shopping experiences.”
Biznology Blogger, Mike Moran, chimes in on Angie’s statement: “Certainly Angie has a point. If you’ve spent years building your brand, why would you want to cut affiliate marketers in on the sale when your customers already search for branded keywords?”
Angie and Mike make excellent points. In the context of search engine marketing, affiliate programs should only be utilzed by companys in two scenarios:
1. Affiliate programs are ideal for new or unknown brands. Good luck finding a lot of successful affiliates wanting to promote you, though.
2. Affiliate programs may be an option for popular brands if their search engine marketing only appears on non-branded (non-trademarked) keyword searches, and their messaging is tightly controlled by the brand to ensure consistency (the opposite of confusion), compliance, and ethics.
Aside from affiliate marketers, there may be additional groups of Brand Siphoners to look out for as a brand marketing practitioner:
1. Independent Representatives (direct selling companies like Avon and Herbalife)
2. Resellers
3. Vendors
The goal of these Brand Siphoners is to harvest the low-hanging fruit for effortless profit. Everytime I share research with the leadership of a new corporate client, the light bulbs turn on causing an array of responses from anger to astonishment. The depth of Brand Siphoning runs deep into branded keyword variations (trademarked phrases) presenting all types of confusion and misinformation.
It is the responsibility of the brand’s leadership to take back their brand back and engage consumers directly, before it suffers from Brand Erosion.
Another thing to point out here is Brand Dilution. The lesser the perceived quality of the brand marketing extension, vis a vis ”partners” and third parties, the more probable it is that the brand image deteriorates. When evaluating brand marketing extensions, the perceived quality of the brand tends to be examined.
A great example of how this dilutes and degrades a brand’s quality is the screenshot below displaying the results of a branded search for Mary Kay Cosmetics.
It is important for me to point out that Mary Kay’s leadership does not utilize Google’s current trademark policy which would block the use of the Mary Kay trademark by unauthorized parties in the titles and copy of paid search ads.
By Mary Kay allowing independent representatives to advertise on the search engines for branded keywords (trademarks) they are creating a vacuum of confusion and competition. These independent reps feel the need to one-up the other, which leads to inconsistent messaging, deceptive claims, and shady guarantees.
The first paid ad on the screenshot sells the Mary Kay Revitalizing Mask 2 for $14.00, and the second ad sells it for $10.00. This leaves potential customers thinking, “this is confusing, am I being scammed?” Do I need to even comment on the other ads here?
When the leadership of Mary Kay digests a fresh perspective, they will take back their precious brand, engage consumers directly, and assign direct retail sales and leads to independent representatives participating in a paid lead program, easily created and managed by corporate, garnering positive ROI. This is a process our company has been very successful at executing.
By doing this, Mary Kay would accomplish four things:
1. Control Brand Messaging, dilution
2. Ensure compliance
3. Create an even playing field for independent representatives who tell prospects about Mary Kay, only to have the prospect research Mary Kay online and buy from another representative
4. Create a new profit center by selling highly targeted prospects to highly motivated independent representatives
This brings me back to the Google Lawsuit. Once Mary Kay has implemeted Google’s current trademark policy, they will only have to deal with A) Monitoring their trademarks to send out Cease & Desist letters to unauthorized advertisers, B) Monitor their trademarks to catch Google allowing Ads using a Mary Kay trademark (a weekly occurrence), and, C) Continue paying ridiculous pay-per-click fees–that is, until Google loses a trademark infringement lawsuit.
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It sounds like piggybacking? I know when I see the example of seeing it for 14.00 and 10.00, the first thing I think of is scam. Great article!!!!
Jeff, you appear to be a very dedicated reader, thanks for your enthusiasm. What do you do for a living?
Tom
I work in admissions at Kaplan university online.
I hope Mary Kay does enforce its trademark rights. This sort of thing happens with lots of companies, especially those that are work at home type companies. Hopefully this will set a precedent for the others.
Tom, I thought your article was interesting and I agree that diluting a brand is not good for the company, but I think there is something much larger to consider here that you’re missing for your own personal financial benefit:
I don’t believe these advertisers are trying to claim themselves as the company name, it just seems they’re writing about services they provide for such companies. I used to be a Ford mechanic. Based on your arguments, I could never advertise in print or mass media that I work only on Fords because I would be siphoning off the name for my personal benefit, or the local used car lot cannot advertise they have a Honda or Nissan for sale on their lot to those that may be looking on Google for a good used Nissan. I used to even have a huge “Ford repair” sign.
Yes, it is true that I am siphoning off the Ford name, and no doubt every independent Ford dealer WILL back you 100%, sponsor you and throw money at you because they don’t want the little guy like me stealing repair work from them.
So, you suggest congress should pass laws that state that only the owner of the trade or brand has EXCLUSIVITY and NOBODY else can ever speak or write the trade or brand when it’s used DESCRIPTIVELY or to get the attention of a particular market in advertising for profit?
That goes against the entire principles of the free enterprise system. If Ford dealers took care of 100% of their customers, people wouldn’t seek out independent mechanics like me, but the reality is, Ford doesn’t take care of a LOT of people, and MANY people who drive cars have had a bad experience with a car dealer repair shop at one time or another. I know LOTS of people who will NEVER go to the dealer, but if I was not allowed to advertise that I repair FORD vehicles, then it would be a HUGE disservice to both the consumer and me - it would be almost impossible to find me. Do I generate customers word-of-mouth? You bet! I’m the best! But many of those people first found me from my advertisements… in fliers, printed ads, the yellow pages, and, yes, even ON-LINE on Google AdWords…using the FORD name!
If I just advertised “mechanic” I’d have every Honda, Chevy, Nissan, Toyota, and Chrysler at my door…and I’d be wasting my time as well as theirs because I don’t work on these vehicles.
Also, as someone who tried a couple MLM companies and failed miserably with only HUGE credit card debt and a bankruptcy to show for it, I can assure you that as much as the “BRAND” of these companies is important to THEM, maybe if they took better care of the people who financed that brand (us consumers) in the first place, Google wouldn’t have 10,000 advertisers trying to reach all the people who are or have failed miserably, like me. That “BRAND” sure didn’t hold my marriage together, oh, but they PROMISED success!
Obviously, it’s a simple law of supply and demand. If Mary Kay was teaching all their sales reps how to be successful, all these so-called trainers wouldn’t be spending hundreds and hundreds of dollars on Google advertising… because there would simply be no market demand. You pay +$3.00 for gas because of your demand, yet Exxon makes +$50 BILLION in profit? It doesn’t cost THAT much to refine oil. If nobody bought gas, it would still be $.20 a gallon.
Why would so many trainers be so profitable finding people who are LOOKING to be successful in Mary Kay? Call me crazy, but I’m going to go out on a limb and say that maybe it’s because Mary Kay isn’t taking care of it’s people like it should, and then guys like you come around and say, “Don’t worry about not teaching your people to be successful - we’ll help you make all the other guys go away.”
I mean, seriously… are the top execs at Mary kay sitting around actually saying, “Oh, my God! Look, Fred, ANOTHER one of our reps who took that Dan Kennedy MLM training course made ANOTHER Million in sales this month. We gotta put a STOP to this! Hello, Tom?” Yeah, right.
Yet, when was the last time you saw Mary Kay advertise, “Attention Magnetic Marketing people: learn how to be successful” or something like that? You’ll NEVER see it!
So, in reality, from an objective perspective, it appears like you’re just looking to dig into the pockets of these large, profitable MLM companies under the guise of “brand protection” while protecting the reality of a HUGE failure rate of MLM businesses in the US - this is PROVEN, published FACTS and is EASILY availbe from the Federal Government, and I have seen the STAGGERING numbers. When, the truth is, if it wasn’t for the success of so many members in the organization who have apparently received quality training, companies like Mary Kay wouldn’t even have deep pockets for you to dig. It is naive to believe that 100% of the people who actually ARE successful in these MLM companies got their training from the “BRAND” company.
Maybe these trainers might know something the “brands” don’t?
In the long run, you’re just going to hinder the success of the MLM companies as well as continue to restrict free speech on the Internet and other media. You’ll see ads on Google for the used car lot division of Nissan that read, “And come see our ‘other’ brands in stock if you don’t like Nissans (we’re not allowed to print their names anymore).”
Good luck with your cause. I’m sure you’ll make a $-killing-$.
David
David,
Thank you for taking the time to comment. You make some well thought out points and I want to address them.
First off, Google has an optional policy that will prevent unauthorized parties from using a brand’s trademark in the heading or text of an ad.
The reason they do this is to preserve their business model. In a trademark lawsuit against Google (Geico v. Google), the Eastern District Court of Virginia found a likelihood of confusion for sponsored listings featuring a trademark in the heading or text of the listing:
“…the district court found that the “extremely high” percentage of respondents who experienced some degree of confusion when viewing these advertisements was sufficient to show that there was a likelihood of confusion present when GEICO’s marks appeared in either the heading or the text of a Sponsored Link advertisement.”
“Google advised the district court that it had no contrary evidence. Thus, the district court held that GEICO had established a likelihood of confusion and had therefore shown that Google violated the Lanham Act with regard to those Sponsored Link advertisements that included GEICO’s marks in the headings or text.”
You make the point of a Fair Use example–using a trademark to describe something. In your example, you should have the right to describe yourself as a Ford mechanic, and you are right.
However, this is not a game Google wants to get into–trying to determine internally what is Fair Use and what isn’t, so it just makes sense to block unauthorized usage at the trademark holder’s request.
For some industries, it doesn’t make sense to block third party usage because the companies depend on it. This is why Ford, Chrysler, GM, etc., do not implement Google’s trademark policy. To reiterate, it should be up to the trademark holder.
The next point to make is that we have successfully executed our strategy with a couple of mlm brands and the results are very impressive. We will be serving up a white paper to display how many areas of business our solution positively affects–most importantly compliance and the bottom line!
We will continue to move forward and help mlm brands build and maintain successful enterprises online.
Tom,
Your position on the topic is certainly appreciated, although not accepted.
No doubt both of us are educated and life-experienced enough to know that statistics can be used to prove any position, so I’m sure you will come out with a mountain of evidence supporting yours and you will sell it to the naive masses. We both know there’s no shortage of them.
Just to be clear, I hold no favoritism with Google whatsoever and am often quite enraged with their arrogance, apathy, and incredible lack of service and accountability, despite their huge profitability to a level which could easily enable them to embrace the opposite, but they so adamantly and decisively choose not to incorporate such elements into their business model.
Also, I believe very profoundly in the proven principles of marketing and I also know that MLM is still one of the BEST ways for the “average Joe” (a.k.a. anyone) to create a very profitable and highly successful business for next to nothing because it is a business model that works and works very well, but not if you follow the hype these MLM’s spew.
MLM is just a pay-plan, not an industry, and these companies know it. I can’t imagine the new owner of a Subway franchise being told by Doctor’s Associates (the parent company) to have all his friends and family over to the new restaurant to eat sandwiches and bring others to come by to eat sandwiches. He’d be out of business in a week and the parent company would no doubt be held accountable…yet these MLM companies do this and then attorneys step in to protect their “brand” as if this is a way of life with pride. Wouldn’t you make more money (and better benefit society) by coaching these companies on how to accomplish their goal and increase the success of their organization? Personally, I wouldn’t be able to sleep if I knowingly and consistently did hundreds of thousands of people wrong, but these MLM companies have the hard figures to prove that they are ruining many lives and protecting themselves under the guise of “well, you just didn’t try hard enough.” It’s pure bull!
The reality is, people with a clue in life know that blaming Google for a brand’s dilution is as far-fetched as blaming the media for Bill Clinton’s adultery. Companies (and people) with genuine integrity and accountability create brands that reflect and demonstrate these values, and the fact that they need attorneys to litigate this value should be enough evidence in itself of how much of a mirage it really is. If the media wasn’t there to illustrate the truth about President Clinton, only the “brand” would be shown and everyone would live in ignorant bliss, thinking he was a family role model with integrity and his “perfect marriage with his wife, their child, dog, saxophone and all.”
Google is simply a window through which the masses may look and see more clearly the true face of these businesses. Google keeps the playing field equal and these MLM’s have EVERY equal opportunity to start following through on their empty promises of teaching success and wealth. They don’t because they can’t, so they employ guys like you.
There are so many people saying negative things about these companies because there are so many people who have experiences with these companies that are negative - the scales are FAR out of balance with EXTREME empty promises from these companies, and if these companies were to print the honest failure rate statistics (we’re talking HARD, factual, raw numbers) of the EXTREME number of failures and lives ruined from these MLM companies (no MLM company is excluded) upfront on the first page of their web site and all literature at the top in large print, these so-called “brands” which you defend would drop to the level of the false reality in which they were enshrined. And, Tom, you (and all MLM companies) KNOW I speak the purest factual truth and I do not embellish one single word here, despite whatever statistics, reports, and studies you can compile.
Google has become a media, and this lawsuit is looking to suppress that media. Google doesn’t write the information - it’s just the “index page” of the Internet. I also think Google is a coward. Can you imagine the New York Times taking the same position as Google? It’s laughable! Google is a spineless coward and deserves these headaches.
We all want people who say negative things about us to go away because we all have negative things about ourselves we don’t want to face, but if we act with accountability, then more good things are said than bad.
This all comes down to integrity and accountability from these so-called “victimized” MLM companies. Unfortunately for the public, and fortunately for these MLM companies (and the attorneys on their payrolls), there are no laws that require integrity and accountability.
Of course, laws are written by lawyers…and form follows function.
David
Okay, I get your point. All network marketing companies should be burned to ashes because people like you weren’t successful. Is that accurate?
I also vehemently disagree with your characterization of the paid listings on Google as “media.” Google doesn’t index advertisements they publish them for profit.
Okay, I’ll agree with you that the paid listings on Google are not an index. However, as far as the media, how are the Arizona Republic or the New York Times any different from Google with their “paid listings?” The vast bulk of these publications is paid. The only reason you don’t see similar advertisements as Google has is because of the cost factor.
But, if you actually read my entire post, you would know you are not accurate to say that I believe all MLM companies should be burned to ashes. There’s a larger picture you’re missing here and it seems you’re not getting my point with that remark.
All I’m saying is this…
These network marketing companies USUALLY make MOST of their money up front when new people join because the average person will spend between $200-$400+ to get “signed up.” Creating the “perception” of a strong brand will surely entice more people to join and, sure, that will yield short-term, unsustainable growth. It’s ultimately a lose-lose situation for everyone…except the marketing department (and the attorneys who defend this false image).
I have no doubt your “report” will illustrate this factor. But, your report will never illustrate the markedly improved success of the distributors…because the brand benefits the company, not the distributors.
I can’t image your report will show:
Because of the brand improvement of XYZ MLM company, now, distributors are .92% likely to be profitable, as opposed to our previous numbers of .84% likely. You’re not required to have that level of disclosure and it will mean nothing to the tens of thousands of people who’s lives have been ruined by these companies and their empty promises.
But, it seems to me it would be more profitable (and ethical) for companies, instead of focusing on creating a superficial brand, to actually do what they preach they do, and teach their distributors PROVEN marketing principles and techniques that actually WORK and have worked for 1,000’s of various businesses across the US and tested over time to actually HELP these people grow their businesses and improve their lives, instead of just emptying their wallets in the promise of riches and wealth which they have no ability or desire to follow through.
This would support a strong foundation of long-term growth, which, in turn, would also automatically create a very strong brand people would value and respect. Additionally, the company would move significantly more product volume with increasing returns. It’s win-win for everyone, and win-win is always smart business.
I don’t see too many people saying negative things about Napoleon Hill or Dale Carnegie. Why don’t you go try to defend THOSE brands? Because you don’t HAVE to. They teach PROVEN principles to people that WORK, time and time again when they are used.
But, for some reason, these MLM companies CHOOSE to NOT teach their distributors PROVEN marketing principles that work, time and time again for 100% of the people who use them. Why not?
Whatever the reason, it’s irrelevant. Apparently it’s much easier to avoid the accountability issues and just pay an attorney to sue everyone.
Nothing personal, Tom, but if you actually knew what you were talking about and had the integrity to verify and validate that what I’m saying is 100% facts, you would know that my comments here are not based on my failure so much as they are based on my success.
A little extra accountability in this world might actually do us all some good (although a lot of attorneys would be out of work).
David
The bottom line is… this isn’t about Google.
For Mary Kay, this is a company that chooses to not follow through on its promises of teaching their reps to genuinely become successful, in addition to producing an inferior product…so natural competitive market forces have come into play and sales are down.
Mary Kay has nothing to leverage and they don’t know how to re-invent themselves (like every business must periodically do to keep up with market forces), so they blame Google for taking their business away.
This is like Best Buy blaming Al Gore for losing sales to eBay.
David,
I know you are passionate about this–I simply disagree with your asseement based on my own life experiences.
Truth be told, I was a successful network marketing rep in the 90’s until I sold my business when I decided to pursue other business concerns. The business was intuitive for me, I built relationships with people that had a large sphere of influence and achieved my goals.
Part of our practice is to identify a network marketing company’s reps who are making grand claims and false gurantees–both about earning potential and the products or services. The leadership of frequently searched MLM brands are starting to understand how this affects their brands and are making adjustments.
I know through executive discussions that MLM leaders absolutely want their reps to be successful, and this is where your argument falls short. Doesn’t the success of their reps mean more revenue?