Nov. 5 (Bloomberg) -- President Barack Obama and his Republican challenger, Mitt Romney, seeking to woo online voters, have adopted an advertising tactic referred to as brand hijacking that companies have used for years to market wares to Web users searching for information on competitors.
People who type one candidate’s name into Google Inc.’s search box in some markets have seen ads for his opponent. A search for “Barack Obama,” for instance, has yielded ads for Romney, while entering “Mitt Romney” has resulted in ads for Obama. Romney has used a similar tactic on Facebook Inc.
The approach is designed to help the candidates raise awareness among users of the Web or social networks. Used by companies, the practice has also stirred controversy, resulting in lawsuits that alleged it enables trademark violation. While court rulings have been mixed over whether the form of advertising is legal, it can breed confusion for voters seeking information about one candidate to be shown ads for another, said Peter Harvey, an attorney at Harvey Siskind LLP.
“There are some real negatives in terms of causing consumer confusion and misdirecting people,” said Harvey, who practices intellectual property law. “And it’s quite intentional. So, it’s a problem.”
Eric Goldman, professor at Santa Clara University School of Law, said some voters may consider it a “bare knuckles” marketing method that’s beneath candidates seeking the highest U.S. political office.
“We might view it as not presidential enough,” said Goldman, who said he himself doesn’t find it off-putting. “I could see other people saying I don’t think that’s the way we want the marketing presented to us.”
Buying ads that appear when people search for a competitor occurs commonly on search engines. Google, for instance, lets advertisers pay for their message to appear as an ad alongside results of a search for a competing brand, product or company. Michael Young, an attorney based in Plano Texas, refers to the practice as “brand hijacking.”
Obama and Romney have both spent on this form of advertising this year, according to estimates by Rise Interactive, a Chicago-based digital-marketing agency. Romney has paid for his information to appear when people search for “Barack Obama” and “Obama,” while Obama has paid for his results to appear when people search for “Mitt Romney.”
The amount spent on these ads amounted to tens of thousands of dollars or less in the third quarter, according to Rise Interactive. That’s pocket change for campaigns with budgets upwards of about $2 billion combined for this election.
Still, showing up in Internet searches is an important tactic, said Zac Moffatt, digital director for Mitt Romney for President.
Facebook’s take on this kind of advertising is newer and less proven than Google’s. It only began testing a form of the ads in July. Rather than using keywords like Google, Facebook lets marketers bid on categories that people may be looking for on the social network.
“We think of search a lot of times as intent,” Moffatt said. “If you can participate in that conversation the likelihood that you’re relevant is much higher. It’s pretty specific.”
The Romney campaign’s digital staff has more than 140 people, including a “sizeable part” focused on social networking, Moffatt said. To help it reach part of the 1 billion people on Facebook, Romney has bought query-based ads called “Sponsored Results,” as well as other forms of advertising, such as marketing messages tailored to mobile users, he said, declining to discuss dollar amounts.
While Obama has more Facebook fans, Romney’s fan page may be creating more buzz. Obama has attracted 31.7 million “likes,” while Romney has 11.9 million. Still, the number of people leaving comments or shared posts about Romney’s page -- a measure of engagement -- was recently at 2.5 million, compared with Obama’s 2.34 million.
Obama’s campaign also touted its digital strategy.
“Our online advertising efforts are aimed at reaching voters as efficiently as possible and in a way that is tailored to their interests,” Adam Fetcher, a spokesman for the Obama campaign, said in an e-mailed statement. “That’s how we can most effectively communicate our messages.”
Aaron Stein, a spokesman for Mountain View, California-based Google, and Elisabeth Diana, a spokeswoman for Menlo Park, California-based Facebook, declined to comment.
Google has been sued over the practice in the past by companies that allege their competitors used the ads illegally.
Geico, Rosetta Stone
Geico Corp., the auto insurer owned by Warren Buffett’s Berkshire Hathaway Inc., sued Google in 2004 to stop it from placing ads for competitors next to search results with its name. The companies later settled the lawsuit after a federal judge in Alexandria, Virginia ruled that some ads violate U.S. trademark law.
More recently, language-software maker Rosetta Stone Inc. claimed that Google sold the right to use Rosetta’s trademarks as keywords for paid ads that directed searchers to competitors and counterfeiters. Rosetta Stone later agreed to drop the lawsuit and said it and Google will collaborate to combat ads for counterfeit products, according to an Oct. 31 filing.
A U.S. district judge ruled in 2010 that the sale of Rosetta’s trademarked phrases as keywords wouldn’t confuse consumers. A federal appeals court in Virgina in April overturned part of that ruling and sent the case back to the lower court.
The approach typically doesn’t violate trademark law as long as there isn’t confusion about what the ad is promoting, said Rebecca Tushnet, a professor of law at Georgetown University Law Center.
“It may be jarring, but at the same time, as long as you know what your options are and are not fooled, we just call that competition,” she said. “If people aren’t confused, the fact that they may think differently about Obama after seeing Romney’s ads -- it isn’t harm, it’s just the market working.”
The case is Government Employees Insurance Co. v. Google Inc., 04cv507, U.S. District Court for the Eastern District of Virginia (Alexandria).
The case is Rosetta Stone v. Google, 10-2007, U.S. Court of Appeals for the Fourth Circuit (Richmond, Virginia).
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