The success of Internet giant Google has largely been based on something small: Internet advertising that use tiny keyword-based ads to generate billions of dollars in revenue. Given Google’s massive audience, advertisers have been willing to pay for search-based ads that deliver clicks back to their websites. Those ads appear as sponsored results alongside the organic, relevancy-based search results.
The Google model involves an auction process in which advertisers bid to place their ad against results based on the search terms entered by users. Under the model, whoever is willing to pay the most for a given term or search query has their ad appear as a “sponsored link.” Whenever a user clicks on the sponsored link, the marketer pays Google the bid amount. Each click may only cost a few pennies, but with millions of clicks every day, the keyword advertising business is a multi-billion dollar business.
My weekly technology law column (homepage version) notes that Google’s keyword advertising approach has been a huge commercial success, but it has long raised legal concerns over whether trade mark owners have rights in their marks that extend to their use as keyword advertisements. For example, would it be a trademark violation for Bell Canada to purchase keyword ads using terms such as Telus or Rogers so that its ad would appear alongside search results for the competition?