Tesco takes moral stand against Google Awords?

Jonathan Bowers, May 9th 2008, 11:19AM

UK supermarket titan Tesco has announced that it is not bidding on rivals’ names despite the introduction of Google Adwords changes. If true what are Tesco’s motivations?

Immediate reactions have been that Tesco does not want to dance to Google’s tune and that the move is designed to keep the cost of search engine advertising down. And Tesco would not be the only company in the UK commercial sector showing defiance to the US goliath.

Or does Tesco have something else on its mind. Naturally, if it appears to take the moral high ground and does not bid on names such as Sainsbury’s or Asda, it will want them to do the same. Just maybe, the market leader’s concerns of rivals diverting its intended online customer base are the real motivation.

This falls in line with Asda’s belief. According to Brand Republic , Rick Bendel, marketing director at Asda, said: 'Tesco believes everything is for sale, except when it doesn't suit it.' This supports the view that Tesco thinks it will ultimately lose out from the adoption of Adword changes and is trying to manoeuvre to prevent it. However, Asda is not playing ball as it has not ruled out bidding on rival trademarks.

Search engine traffic diversion has become a major issue. The new rules allow companies to bid on rivals’ trademarks for the first time. While advertisers are not allowed to pass themselves off as their competitors, they can now appear quoting their own URL at the top of a search for a rival if they are the top Adwords bidders.

For example, a searcher who wants to do some online grocery shopping puts Tesco in as their search criteria. Asda has top bid on the Adword ‘Tesco’, so its advert appears top of the Google search list. This online shopper just wants groceries and is happy to click on the first link. The searcher looked for Tesco but ended up shopping with Asda. Tesco has lost out despite being the initial front runner.

It is surprising that Tesco would be that concerned about a price war on Adwords. It is the dominant supermarket in the UK and most likely to have the resources to win an Adwords price battle. However, as it operates in a convenience retail sector where customers are likely to opt for the path of least resistance, the possibility that Google’s new Adwords system will divert custom away is a serious concern.

This is also backed up by brand new research suggesting that under the new system search engine users get to their original search destination 8% less often compared to the old system.

I believe that Tesco’s true concern with Google’s new rules is not that it will have to spend more but that its competitors will now profit from piggybacking on its hard fought brand positioning.

Tags: adwords, brand, e-commerce, google, search_terms
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Google now the top global brand

Jonathan Bowers, April 28th 2008, 12:23PM

Google is once again the biggest brand in the world, well according to one report at least. Admittedly, the said report is from highly respected market research agency Millward Brown and it has the online search engine titan as top dog in the corporate branding stakes for the second year running.

The new Millward Brown list of top 100 brands is once again dominated by technology companies with 6 of the top 10 coming from the IT field. However, previous brand king Microsoft has fallen to third to leave Google as the undisputed brand leader. Or has it, according to an alternative list by Interbrand Google ranked only 20th in 2007.

The discrepancy seems to be down to just how rapidly the Google brand is growing. While the Interbrand 2007 list has Google in 20th place it also says the brand had grown by 44% over the previous 12 months, a figure that blows all of the other top 100 brands out of the water. It is therefore perhaps understandable that a year on Google would be the top brand worldwide.

The Millward Brown list is compiled by evaluating both tangible financials and intangible customer opinion. In terms of the tangibles, Google certainly made big waves last year. Profits were up 40% to $4.2 billion in 2007.

Meanwhile, what about the intangibles? Well ask a random person on the street to name an online search engine and chances are they will say Google. Similarly, ask them to describe the Google logo and, again, the likelihood is they can.

It certainly seems Google is king at the moment. Its impressive profits, extremely recognisable profile and market sector dominance undoubtedly makes it the Tiger Woods of brands.

Meanwhile, looking just at the UK sector, Vodafone has taken over as the top British brand and in doing so has provided a useful example that brand success and profits are not necessarily mutual. In fact, ironically Vodafone's bottom line has taken a bit of a beating lately partly because it has been pursuing an aggressive acquisition policy to expand its brand strength globally. Time will tell if boosting its brand will work for Vodafone.

Also of interest is the continued recovery of Marks & Spencer. The British retailer has had an iconic brand for a long time, however its value has fluctuated a great deal in the last few years. Happy for it, the brand is looking in good shape again as M&S is the top British retail brand and the fourth highest overall.

The recover has been multipronged. To rebuild its reputation M&S has revamped its stores, refocused on core product lines and, of course, delivered a highly successful ad campaign that reports suggest brought in £2.5 for every £1 spent. Other successful strategies included a remodelling of the company website, which resulted in a 78% increase in online Christmas sales last year. The morale of the M&S story seems to be: keep it fresh and current.

Tags: adwords, brand, google, internet, search_terms
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Monitoring brand popularity online

Jonathan Bowers, July 4th 2007, 5:09PM

Some results from a survey by PR agency immediate future have been published this week and they look at the Internet's most talked about brands. The study takes the Interbrand Top 100 Companies and looks at how they rank when considered in terms of the volume of mentions they receive online.

On the whole the information is very useful and while the results do not surprise greatly, some links can be drawn between overall brand success and the online contribution of consumers.

However, a failing in the study brings up a very interesting question. How do you monitor the brand popularity of a company with a generic name? The best example is clothing company Gap, which appears at 52 in the Interbrand 100. It jumps to 17th in immediate future's social media chart and almost half of the mentions are attributed to Flickr the photo sharing website. When you search for 'Gap' using 'most relevant' as the search instruction you have to scroll through 8 pages of images of the London Underground before you actually reach an image of the US retailer.

Gap as a term has over 95,000 results on Flickr but it would take too many man hours to work out how many of those actually refer to the right Gap. Compare this to Honda with 100,000 mentions on the site. It is unlikely that any of these do not relate directly to the brand and therefore a quick search gives an accurate analysis of the company's presence and reach.

So does Gap deserve its place in the study?

Tags: brand, social media
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