Back in Feb­ru­ary, Deb Wilcox wrote our first post on the le­gal­ity of key­word bid­ding on trade­mark terms. We fol­lowed up on that topic in April, re­port­ing on the Ninth Cir­cuit’s de­ci­sion in Net­work Au­toma­tion v. Ad­vanced Sys­tems Corp. That was the first case to squarely con­front the is­sue of whether a com­pany would likely con­fuse or­di­nary con­sumers by key­word bid­ding on a com­peti­tor's trade­mark.

Now Mark­Mon­i­tor, a com­pany that spe­cial­izes in en­ter­prise brand pro­tec­tion, has re­leased a “Brand­jack­ing In­dex” that at­tempts to quan­tify the con­se­quences of this ac­tiv­ity with re­spect to ho­tel on­line book­ings. The study can be ac­cessed through Hotel­News­Now or through Mark­Mon­i­tor's web­site (reg­is­tra­tion re­quired).

The study con­cludes that brand­jack­ing re­sults in more than 580 mil­lion vis­its from highly-qual­i­fied trav­el­ers be­ing si­phoned from ho­tel book­ing sites to the book­ing sites of chan­nel/mar­ket­ing part­ners or com­peti­tors. The study pegs the over­all an­nual cost of lost book­ings and un­nec­es­sary com­mis­sions at $2.2 bil­lion.

While those num­bers are sure to grab head­lines, our at­ten­tion was equally fo­cused on the de­scrip­tion of key­word pur­chase ac­tiv­ity:

  • More than 1,750 on­line travel agents pur­chased more than 1.3 mil­lion paid search ads in the two-week study pe­riod. This ac­counted for 60% to 80% of over­all key­word pur­chases.  
  • Com­peti­tors (i.e., a ho­tel brand pur­chas­ing key­words us­ing an­other ho­tel’s brand name) amounted to nearly half of all the bid­ders on key­word search terms. While com­peti­tors only ended up plac­ing a small per­cent­age of ads on those terms, this bid­ding ac­tiv­ity likely drove up rates for those key­words.