Trademark Bidding: How It Works (and How to Respond)

Trademark bidding happens when advertisers bid on keywords that are trademarks in paid search campaigns. While often legal under Google Ads policies, unauthorized trademark bidding can drain your ad budget, confuse customers, and dilute your brand. Preventing this means using defensive bidding strategies, clear affiliate policies, active monitoring through trademark watch services, and even filing complaints when necessary.

What Is Trademark Bidding?

Trademark bidding (or TM bidding) refers to the practice of purchasing paid search ads that target trademarked terms as keywords. When you bid on a trademark in Google Ads or similar platforms, you’re telling the ad network to display your advertisement when someone searches for that specific brand name. For brand owners of that specific mark, it’s reassurance that your own website is displayed prominently in search results rather than resellers or retailers.

Here’s what that looks like in practice: If someone searches for “Nike running shoes,” both Nike and its competitors might have ads appear in the search results, even though “Nike” is a registered trademark. Essentially, trademark bidding focuses on using the brand name as the trigger for ad placement.

Trademark bidding differs from general brand bidding and competitor bidding in subtle but important ways:

• Brand bidding typically means bidding on your own trademarked keywords to maintain visibility and control over your brand’s search results.
• Competitor bidding involves targeting competitor brand names to capture their audience. This is where trademark bidding becomes most contentious.
• Trademark keyword bidding specifically refers to using registered trademarks as paid search keywords, which raises questions about trademark rights and infringement.

How Does TM Bidding Work in Google Ads?

The bidding process in paid search platforms operates on an auction system. When someone types a search query, Google’s algorithm instantly evaluates all advertisers bidding on keywords related to that query.

But Google allows advertisers to bid on trademark keywords as part of their paid search strategy. Google’s trademark policy states that while anyone can generally bid on trademarked terms as keywords, using those trademarks in ad headlines or descriptions requires authorization from the trademark owner. If a trademark owner files a complaint with Google, the platform will review ads using their brand name and remove unauthorized uses from ad copy, but it doesn’t remove the actual bidding.

This creates a gray area where competitors, affiliates, and even unauthorized resellers can trigger their ads when users search for your brand, as long as they don’t use your trademark explicitly in their ad text.

Who Can Bid on Trademarked Keywords?

There are five different types of users who are likely to use TM bidding:

• Competitors, as they can bid on a brand name to intercept customers who are already searching for the original, hoping to win them over with competitive offers or positioning.
• Affiliates and partners (regardless of permission from the brand). Affiliate trademark bidding can be beneficial when properly managed, but unauthorized affiliate TM bidding frequently becomes problematic.
• Resellers and authorized distributors might bid to promote legitimate sales of your products, but they need to follow the brand’s guidelines to promotions and ad placement.
• Publishers and review sites may also bid on brand names by referencing their reviews and other services.
• The brand itself, to keep the main page on top of the search results.

Is It Legal to Bid on a Trademark?

Generally speaking, bidding on competitor names or trademark keywords isn’t inherently illegal, and you can check international trademark protection rulings to learn more. Trademark protection primarily exists to prevent consumer confusion and the unauthorized use of marks in ways that could mislead the public about the source of goods or services.

Under Google Ads policies, trademark bidding on keywords is typically allowed. However, using the trademark in ad copy without authorization can lead to the ad being taken down if the trademark owner files a complaint. Google reviews these complaints on a case-by-case basis and generally sides with trademark owners when the use could cause confusion.

The line between advertisement and infringement gets crossed when:

• The ad copy uses the trademark in a misleading way that suggests affiliation or endorsement.
• The advertiser falsely presents itself as the trademark owner or an authorized partner.
• They intentionally try to confuse the audience about the source of products or services.
• The trademark is used in ways that dilute or tarnish the brand’s reputation.

Trademark Bidding Strategies

Defensive trademark bidding is when you bid on your own brand name to maintain control over your search results. This ensures that when potential customers search for you specifically, they see your official ads and messaging first. In short, defensive bidding prevents competitors from hijacking your branded search traffic.

Offensive TM bidding involves bidding on competitor trademarks to capture their audience, where the goal is to present your offering as an alternative when users are already nearing the last step in their search (the purchase).

Affiliate trademark bidding involves affiliates or partners bidding on your brand terms as part of their promotional efforts. While usually beneficial, unmanaged affiliate TM bidding often leads to channel-confused customers and increased costs.

Indirect and gray-area trademark bidding includes tactics like misspellings, variations, or related terms that dance around direct trademark use. For example, bidding on “Nyke shoes” when targeting Nike customers, or using phrases like “best alternatives to [a brand].”

Why Advertisers Bid on Trademarks

If your competitors can position their ads to appear when someone searches for your brand, they get a chance to win customers who might otherwise go directly to you.

At the same time, simple logic suggests that appearing alongside established brands in search results lends credibility to newer or lesser-known competitors. When a startup’s ad appears next to an industry leader’s, it can create the impression of being a valuable comparison.

Search Engine Results Pages (SERP) rankings are also key. Some brands might bid on competitor trademarks only to prevent competitors from appearing higher in the search results.

Benefits of Trademark Bidding

Brand protection impact is the primary benefit of defensive trademark bidding. By owning the paid placements for your brand name, you control the narrative and messaging that potential customers see first.

Conversion rate is usually next, primarily because you’re capturing users with clear purchase intent. Someone searching for your brand name is typically further along in their buyer journey, making them more likely to actually buy your product or service.

Finally, defensive bidding captures more of your existing brand demand, while offensive bidding can expand your customer base by introducing your offering to people actively searching for competitors. Both ultimately serve the same purpose: increased sales and revenue.

Risks and Challenges of TM Bidding

When using TM bidding, one of the first things to do is avoid trademark infringement (and legal issues that may follow it). Even without a lawsuit, having ads repeatedly removed by platforms damages your advertising account reputation.

Competitors or bad actors might also repeatedly click on your branded ads to drain your budget without any genuine interest in your products. This can waste advertising spend and distort your campaign performance metrics.

Additionally, when affiliates bid on your trademark without authorization, they’re essentially driving up costs and potentially violating the terms of your affiliate program. This leads to what’s called “channel conflict,” with your marketing partners cannibalizing your direct customer acquisition.

Then come the customers. A confused user might click on ads from resellers, review sites, or competitors, thinking they’re reaching your official site. This practically ensures poor customer experiences and dilutes your brand’s authority.

Affiliate TM Bidding—Allow or Restrict?

Affiliate bidding makes sense if you have exclusive products that are primarily sold through an affiliate channel. Some brands with strong affiliate relationships set up bidding strategies where affiliates can bid on certain branded terms with specific guidelines about ad copy and landing pages.

However, more often, allowing affiliates to bid on your trademark creates more problems than it solves. Affiliates compete against your own campaigns, driving up your cost-per-click without adding new customers. Additionally, you lose control over the messaging and customer experience for people specifically searching for your brand.

Make sure to check competitors using aggressive tactics, bidding on misspellings of your trademark, creating misleading ad copy that suggests official affiliation, or sending traffic to generic review or comparison pages rather than directly to your product.

How to Detect Trademark Bidding Abuse

You need to regularly search for your brand name on Google. Notably, use incognito mode and try different variations of your brand terms. Look for ads from competitors or unauthorized sellers appearing in the paid results.

However, manual checking only gives you snapshots and can miss violations that occur at specific times or in certain geographic regions. Look for ads that lead to affiliate landing pages, review sites, or comparison pages rather than directly to your product (so they’ll have a different target URL).

For comprehensive internal monitoring, trademark watch services like those offered by Protect.TM provide automated alerts whenever potential violations occur. These services continuously monitor paid search results across different locations and times, flagging unauthorized use of your trademark far more effectively than manual checking.

How to Protect Your Brand From TM Bidding

Filing trademark complaints with Google and other ad platforms is your first line of defense for trademark protection in the digital world. Most platforms have formal processes for trademark owners to report violations. Keep documentation of your trademark registration handy, as you’ll need to prove ownership.

Once again, defensive trademark bidding strategies are key here. While it might seem counterintuitive to pay for traffic that is already headed your way, defensive bidding can usually cost less than losing customers and needing to bring them back again.

Set up regular checks of your trademark use in paid search, establish a process for handling violations, and follow through with consequences for partners who breach your guidelines. Consider implementing trademark monitoring services that automate this process and provide comprehensive reporting through an admin dashboard where you can track the current status of any trademark protection service you’ve requested.

Defensive vs. Offensive Trademark Bidding

When to use defensive TM bidding: Always. Unless you have very good reasons not to, you should bid on your own trademark. First off, the cost-per-click for branded terms is typically much lower than non-branded keywords. Secondly, branded keywords convert better, and you get more control over your brand’s search presence.

When offensive bidding is justified: Bidding on competitor trademarks can make strategic sense in highly competitive markets, especially when you’re launching a new product or trying to gain market share. However, do this very carefully, ensuring your ads are clearly distinguishable and don’t create confusion about affiliation. Focus on delivering a value proposition unique to your product vs. the trademark.

Note that while aggressive tactics might bring short-term gains, building a brand that customers trust requires respecting boundaries. Ask yourself whether your trademark bidding strategy would damage your reputation if it became public knowledge. If the answer is yes, reconsider your approach.

Best Practices for Trademark Bidding

Even when bidding on competitor keywords, your ad text should focus on your brand’s value proposition, not claim affiliation with the competitor. Use phrases like “Alternative to...” or “Compare with...” only if you’re genuinely providing comparison information.

Make sure to spell out clear guidelines about trademark bidding, regular audits of affiliate activities in paid search, and swift consequences for violations. Consider implementing an approval process where affiliates must get permission before launching any campaigns that might involve your brand terms.

Startups usually fail at trademark protection because they’re trying to use an entirely manual process. Automation, monitoring, and fraud prevention tools are practically a must for trademark bidding at scale. Use Google Ads’ auction insights to see who’s competing for your branded terms, and set up alerts for unusual spending patterns or conversion rate drops that might indicate click fraud.

Before launching any trademark bidding strategy, conduct a thorough trademark search to understand the competitive landscape and identify potential conflicts. This is especially important if you’re considering offensive bidding on competitor terms, since you need to know exactly what you’re dealing with legally.

Final Thoughts on Trademark Bidding

Trademark bidding is both an opportunity and a challenge for brand owners. On one hand, defensive brand bidding gives you control over your own brand name. On the other hand, competitor and affiliate trademark bidding can drain your marketing budget and create confusion among your customers.

The key to navigating this landscape successfully is visibility. You can’t protect what you can’t see, and many brand owners discover too late that competitors or unauthorized affiliates have been bidding on their trademark for months, capturing traffic and revenue that should have been theirs.

This is where preventative measures win over reactionary implementations. Protect.TM offers comprehensive trademark monitoring services that alert you to unauthorized trademark bidding in real-time.

Beyond monitoring, Protect.TM helps you establish a complete trademark protection strategy, from initial trademark search and registration to ongoing renewal management, even with international trademarks.

Whether you’re dealing with affiliate TM bidding issues, competitor trademark infringement, or simply want to ensure your brand is protected as it grows, Protect.TM provides the tools and expertise you need. Start monitoring your brand with Protect.TM today.

Frequently Asked Questions

Is brand bidding illegal?

Brand bidding itself isn’t illegal under most circumstances. However, Google and other platforms allow trademark owners to file complaints about ad copy violations, and serious trademark infringement can lead to legal action beyond just ad removal.

Can affiliates legally bid on trademarks?

Affiliates can technically bid on trademarks as keywords from a platform policy perspective, but whether they should depends on your affiliate agreement terms and trademark enforcement decisions. The best approach is to clearly state your trademark bidding rules in affiliate agreements and actively monitor compliance.

Can I stop others from bidding on my trademark?

You can limit but not completely prevent trademark bidding on your brand name, since Google and other platforms allow anyone to bid on trademarks as keywords. When you file a trademark complaint with Google, they’ll review ads using your trademark in headlines or descriptions and remove unauthorized uses.

Is trademark bidding worth the risk?

Defensive trademark bidding (on your own brand) is nearly always worth it, as the risks are minimal, the costs are typically lower than non-branded keywords, and conversion rates are higher. Offensive trademark bidding (on competitor brands) carries more risk and should be approached carefully.

Is TM bidding effective for small businesses?

Small businesses often have limited marketing budgets, making it crucial to capture every potential customer efficiently. Notably, defensive trademark bidding for small businesses typically costs less than other paid search strategies because branded keywords have lower competition and cost-per-click rates.