Why Norwegian paid Google Eur 1.4M in excess charges - And how you can get a FREE trademark evaluation (worth 400 Eur)

(23/09/2011 12:25 pm)

By Christopher Hofman Laursen

The intention with this article is to show you why it is important to register your brand as a trademark. European Domain Centre is all about domain names, however you can now also register your European trademark with us. Right now for a limited time only you can get a FREE trademark validation, which usually costs Eur 400. So profit now if your brand is still unregistered. Check the screenshot below. I have made a Google search for Norwegian, which is one of the largest Scandinavian airlines. Norwegian ranks in the top spot in Google Adwords (marked with a green box) for their brand name, however one of their fiercest rivals, SAS, is also appearing (red box). There are actually several independent sales agents (orange boxes) listed as well.

Why can´t Norwegian block competitors and sales agents from bidding on their brand name ? There is clearly an ethical issue, but what is the legal stance ? Google consider themselves "The Yellow Pages of the Internet" and should therefore not be held accountable, however Louis Vuitton did file and win a suit against Google in 2010. The verdict from 2010 signifies that trademark owners can request Google to block other advertisers from bidding on their trademark.

In this case though Norwegian does not have a registered trademark. I assume that the genericness of the wording Norwegian is not sufficient to approve a trademark application. Conclusively Norwegian cannot request Google to block others from biding on their brand name.

How much does Norwegian pay for the top ranking in Google Adwords ? If there was no competition they would pay Eur 0,10 per click, however they are bidding on a very competitive keyword, and the price is therefore much higher.

Using Google's own tools this is the estimated Google search traffic per month for the most common search terms :

Search term	Estimated traffic
Norwegian	201.000
Norwegian air	27.100
Norwegian airways	5.400
Norwegian airlines	6.600
Norwegian airline	5.400
TOTAL	245.500

Google estimates that there are approximately 250.000 relevant searches per month. According to their traffic estimator the average click price for a top rank position is Eur 4,-. Adwords traffic is usually 20-30 % of the total search traffic, so approximately 50.000 clicks would be distributed monthly on the different Adwords ads. It is commonly known that the top 1 and 2 positions share 80 % of this traffic. With this hypothesis we can now calculate the excess charge between a competitive keyword and one where others are blocked :

Clicks on Adwords for search terms : 250.000 x 30 % x 12 = 900.000

Of which click on the top position : 900.000 x 40 % = 360.000

Extra price paid for top rank on competitive keyword : 360.000 x (4 – 0,10) = 1.404.000

According to my calculations Norwegian is paying 1.4 million Euros extra, as they do not have the trademark to block other competitors from bidding at Google Adwords. This amount could have been spend on extra leg room if the trademark was in place.

If you advertise on Google Adwords I will recommend you to check if your competitors appears, when you type in your brand name. As mentioned before I also suggest that you register your brand as trademark. If Google can not help you blocking competitor bids, then I recommend you to send a cease and desist letter to your competitors instead.

We offer a FREE evaluation to examine if your brand name can be registered as a European trademark. This normally costs Eur 400, so profit this offer for a limited time only. Just click the button below to get started.

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