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The town crier moves through the marketplace shouting the above. Everyone in marketing nods and yawns. None of this is news to anyone at this point. And everyone will assure you they are responding in meaningful, cutting edge ways to this paradigm shift.

But the ramifications of the shift can still surprise – sometimes in the most basic ways.

One of the interesting sidebars of the Don Imus drama was employee reaction. The Wall Street Journal wrote a front-page story on Friday the 13th detailing the backroom drama that preceded decisions by MSNBC and CBS to pull the plug on the show. Entitled “Behind the Fall of Imus, A Digital Brush Fire” the story pulled together a timeline of the decision. Surprise – it repeatedly recounted stories of employees.

At one point NBC News President Steve Capus was interrupted in a meeting to take an urgent call from MSNBC’s Dan Abrams “Mr. Abrams said MSNBC executives were fielding complaints from viewers and employees who had seen a video clip of Mr. Imus’s remark…”

Later the article references a meeting that Mr. Capus called with African-American employees in the news division, “many of whom had complained to managers that MSNBC was sticking with Mr. Imus. The meeting, slated for 45 minutes, stretched for nearly two hours as employees—some emotional and frank – argued for axing the broadcast, according to two people who attended.”

Finally, the piece cites the reaction at Sprint, which decided to pull its advertising. “Sprint employees had lobbied for the move….”

It makes sense. Empowered consumers are, during daylight hours, empowered employees. This isn’t a switch people turn on and off. Think Pandora’s Box. The power shift we continually reference is not confined to the relationship between business and consumer. It also manifests, very crucially, between the employer and the employed.

This is a situation which calls for management thinking beyond simple office legislation that prohibits employees from blogging confidential information at their desks during lunch hours, or, heaven help us, working hours. You may or may not be able to stop the “tell all” juicy insider story of your company.

But, outside that extreme – and provided you are not the kind of boss who invites parody – what this represents is actually a challenge to your internal communications culture. You are what you eat. Your company is made up of empowered employees. We’re not talking about the disgruntled millennial who wants to stick it to the man. We’re talking about loyal, dedicated employees, who in their personal lives are powerful. We’re talking about citizens who are becoming accustomed to being heard, speaking up and speaking out. In short, we’re talking about the face of your organization.

What are you telling them about your brand? How are you evaluating how they communicate your ideas and initiatives? Are they on board with your ideas and initiatives?

Word of mouth isn’t just a consumer phenomenon with ROI implications. That would be too easy.

Beyond basic HR standards of you’re a good place to work or a bad place to work, what are your employees saying about you? Do they understand not only what you sell, but what you represent? Can they accurately and passionately communicate your brand position and your differentiation?

Effective strategic brand communications need a coordinated, embedded internal component. If you consider yourself a leader in respect for the environment, but your frontline employees don’t know that – or don’t know what that means – you’ve lost a critical advantage. If you believe you are a clear innovator in shortening the food supply chain for the benefit of mankind, but the majority of your employees think they’re selling sandwiches, it will take an enormous number of full page ads to communicate your brand position. If you think you’re selling community, and they think you’re just selling coffee, good luck creating the next Starbucks.

On the flip side, employees are also an important real time focus group. The employees at MSNBC and Sprint represented a certain perspective. What are your employees thinking; what are they hearing from the outside that might influence your decisions and change your direction – not only in times of crises, but day to day?

In a time of fast paced change, brand seminars are vital for staff across the board, from the most senior to the most junior.

Your next word of mouth campaign should be your own internal one.

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I didn’t understand the concept either, until David Kirkpatrick wrote about it in November of 2006. “Why buy ads when you can control the content instead?” Let me repeat that on Mr. Kirkpatrick’s behalf “Why buy ads when you can control the content instead?”

It’s that simple. Anyone can be media. Anyone.

What does this mean? This means the game has changed. It means that if you plan on being in business in the 21st century, then you have to do this. If you aren’t doing this, if you aren’t using these tools, then you aren’t a 21st century marketer. With each passing month, old school advertising fades and the digitalization of media steps more and more into prominence. Soon, analog will be dead. Next will be traditional advertising. We’ve said it hundreds of times, you must adapt or die. 

It may seem overwhelming, but the wonderful thing is how absolutely simple this is. It costs very little. The barriers to entry are almost zero. You have no excuses. Stealing from Nike’s mantra: Just do it.

Guy Kawasaki illustrated just how easy this is. He goes by numbers, and in doing so, pretty much calls out anyone who makes any excuses about not entering this game. And this game is the Internet. It amazes me how many people still don’t get it. You must participate in this space. The time is yesterday. You’re already behind.

This is a next step in evolution. The web affects us differently than television, radio or print. It’s both passive and active. This experience is unique. We participate with what we buy in a new way. And we especially participate with our brands in a totally different way. This is why brands must understand this. And this is why every brand needs to truly understand that they now have the opportunity to be the media.

So, going forward, when I’m asking to be fed (and we’re always asking to be fed), you can feed me directly. It doesn’t have to be through a conduit any longer. You used to have to sponsor. Done properly, in the future, you will own the whole program.

Boyd Pearson is Editor-in-Chief of Unbound Edition and a Senior Associate with Patrick Davis Partners, a national brand strategy firm with offices in Atlanta, St. Louis, New York and San Francisco.  Mr. Pearson contributes to the firm’s Digital & Content Strategy Practice.

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Today is an open source era. Holding proprietary technology, data, information, etc. is counter-productive. Not allowing others to participate is pointless and a waste of capital. When all are allowed to participate, the resources of the globe are employed, and there is no stronger work force. The only way towards true progress is through collaboration, and this means allowing others to use what was previously viewed as proprietary. Open source is defined as “a set of principles and practices that promote access to the production and design process for various goods, products, resources and technical conclusions or advice.”

In layman’s terms, this means all the tools needed to be a fully engaged and contributing member of today’s digital society are available when and where needed for free. For those crying piracy or immediately worried about revenue streams, it is essential to remember the code of ethics within the open source environment dictates that sharing and collaboration–intellectual capital–creates value, not the selling of software. A lot of money has been made with open source software, through using the software, not selling it. (Note: Unbound Edition has been created entirely with open source software.)
 
Additionally, companies are becoming evermore transparent, and citizens evermore connected through social networks. Those that participate in this digital realm expect, not hope, to have the tools, information, data, entertainment, etc. they want available…and to be shared freely.

When things are shared this way, it becomes a public collaboration. There is a desirable economics to this: faster innovation, creation, problem solving and business competitiveness becomes available at dramatically reduced prices. More brains. Less dollars. Anyone can do the math.

While the open source movement seems like a techy subject matter, it’s starting to take place everywhere. Nearly all of the major networks offer the opportunity to “catch up” on the episodes of their hit shows either online or on demand. So far, users only have the opportunity fast forward, rewind, stop and play. However, the next step would be to give the users control to record and reproduce what they generate. This may be a bit of a pipe dream considering who runs the networks, but just imagine what people could create.

To some, this may seem scary. “Just give away my work, software, intellectual capital, etc. for free!?!” Yes. Give it away. The goal of anything great should always start with making meaning, not money. Visionaries know, create meaning first and monetize it second, after it has become a success (See Google, they’ve been rather successful at this approach).

Yes, this means the game has changed. And like all games, or any successful business endeavor, it is a gamble. Every good gambler knows that folding can be more important than holding. The hand may be lost, but the game continues, extending the chance of future winnings.

So, with open source software, corporate transparency and social networking all on the rise, it is fair now to call this an “Age of Association.” In this context, sharing, collaboration and creativity become the engines for enormous economic growth…and that’s a beautiful thing. So, the lesson for today’s big media: it’s no longer a one way street; it’s a global conversation. The money will go to the first company that realizes how to be the platform on which this conversation takes place.

All of this creates a situation that gives everyone power. Like David Kirkpatrick said, “if you have a computer and internet access, then you are a media company.” The history of media (freedom of the press) and entrepreneurialism are definitional to American culture: open source is simply the current manifestation. Everyone has a voice, everyone can participate and everyone wins. This is true democracy in action. When a guy in an apartment can take down presidents or get them elected, it’s a new era. And, ultimately, it all benefits the average American, even if they don’t completely comprehend how big this shift really is.

Boyd Pearson is Editor-in-Chief of Unbound Edition and a Senior Associate with Patrick Davis Partners, a national brand strategy firm with offices in Atlanta, St. Louis, New York and San Francisco.  Mr. Pearson contributes to the firm’s Digital & Content Strategy Practice.

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Of course, people do it every day as they assume different personas for different blogs, or even different personas within the same blog for the benefit of interesting dialogue.

But, what about public figures? Should they be afforded the same right to assume a variety of personas in social media?

As the Federal Trade Commission considers the merger of Whole Foods and Wild Oats, they have become increasingly interested in Whole Foods co-founder John Mackey’s once anonymous contributions to a Yahoo finance bulletin board.

Should the CEO of a major retail chain be precluded from participating in a social community about his industry? He certainly is free to participate in these communities in the real world. Yet, like many in the virtual world Mackey was assuming a different identity.

Visionary CEOs are evangelists for their cause or idea. This certainly is the case for Mackey. Yet, once they reach a certain pinnacle of success their causes or ideas are boiled down to singular thoughts and are duplicated by others. People expect to hear these leaders take the same point of view on the same topic that has come to represent his or her success.

For the company’s communication strategy team, they have achieved success when this singular idea has engaged a consumer base. But, for the restless, visionary CEO, he or she has a whole lot more to say, and some of it is probably controversial. In our land of sanitized communications, CEOs of publicly traded companies are rarely afforded the opportunity to create controversy even if it is beneficial for the company.

Now, with the power of online social networks, they have a mechanism for engaging in controversial dialogue anonymously. Executives and other leaders can spur debate, take positions and build a convincing case to support their positions. At the same time, other members of these communities provide ideas and thoughts that inspire new strategies and directions for a company. It is a form of consumer research. It is a real live focus group.

But, what does this mean for corporate reputation management in the digital world? Public relations executives might counsel a CEO to start a blog to give a human touch to the corporate web site. But can the CEO really say anything interesting on the blog, and will real community form around this effort? Probably not.

But if a CEO or other corporate executive participates in an online community under another persona, are they manipulating their company’s reputation? They have access to more information than most and could use that to their advantage to sway opinions about competitors and ideologies. When people are turning off mainstream media for more authentic, personalized exchanges, is an exchange based on alternate identities any more authentic than the evening news? Will this identity exchange eventually delegitimize social media?

Or, is it the new form of target marketing? Does an individual, especially a public leader, have the right to assume different personas for different audiences and occasions? After all, if the market is a series of conversations, the leader will have limited engagement with the market, if he or she has to assume just one persona. And our democratic debates and exchanges, and ultimately market growth, will be limited as these visionaries are told to play it safe.

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Smart businesses have always known “the consumer” is who really matters. Rephrase this as “start with the end in mind” or “follow the money,” if “the consumer” seems a mystery somehow. You get the point: happy purchasers…who are profitable…and drive word of mouth…and grow your business…are not an accident. They can be developed. Doing so upsets and undoes corporate agendas, executive hubris, outdated marketing and control-obsessed brand managers. Again, this is good business, and we have the proof of it.

Putting the consumer “front and center” is complex; and, as the phrase suggests, two separate acts. To put the consumer at the “front” indicates that we are “consumer focused”; we see them first. To put the consumer at the “center” means that we are “consumer centric”; they are the core of our business, and we are in service to them. To succeed with this “front and center” approach, companies must have a capacity for being of two minds – two viewpoints – at once. Not an easy thing to do, especially in command and control cultures that demand often thought-free – and thoughtless – execution of cookie-cutter plans.

Companies that do not get this fail laughably. Seeing the company as “us” and the consumer as “them” leads to the absurd efforts of Coca-Cola, and its corporate-cool “lounges” in malls and fake blog posts. Or to Wal-Mart’s back-to-school social networking site, which apparently exists to tap into kids’ unmet need to congregate, connect and chat based on their common love for “everyday low prices.”

Are two of the biggest companies in the world stupid? No, of course not. But they do think like corporations, not consumers. Ideas like theirs come to life with plenty of research, to be sure. They will defend them with a simple phrase: “We asked the consumer!” (via focus groups and online surveys, surely). So did the designers of the modern Edsel, the Pontiac Aztec.

Asking consumers is one thing. Listening to them yet another. Having a sustained conversation with them something entirely different. The companies winning today know how to have the conversation; they know how to research and market in real time. They know that being consumer centric is what sustains them; they don’t “ask” and “listen” just when they need to advance a new product pipeline. Involving the consumer for your purposes is not the same as operating your company for their benefit (and loyalty).

Consider these examples. The iPod was not born out of focus groups; it opened and led a market by solving an intellectual property issue for an intransigent industry being assaulted by techno wiz kids. Procter & Gamble did not develop Starbucks, though the company had arguably the best consumer data in the world on coffee with Folgers in its portfolio of brands. Ebay was seen as a junk-filled venue for small time criminals upon launch (at least by those who did not get that it was a new mercantile exchange and entrepreneurial engine). So why did these work so grandly?

In each case, the consumer is the brand manager, fulfilling very traditional brand management functions in entirely non-traditional, real time ways. All iPods looks the same, yet no two are alike. The consumer determines the creative content. Starbucks offers thousands of drinks never printed on any menu board, making them on-demand. The consumer determines the product mix (and decided the company would sell far more milk than coffee, end of day). Ebay controls nothing but servers. The consumer determines both inventory and pricing model.

Creative content, product mix, inventory, pricing: all under consumer control. It is no one way street, however. This consumer control gives each company here constant, real-time data. As moods shift, as culture moves, so does consumer behavior. These companies are constantly relevant, respected and recommended not because they check the pulse of the consumer, but because the consumer is their pulse. There is no “us” and “them.” Instead, there are the Apple, Starbucks and Ebay communities.

Not surprisingly, the three companies here are among the fastest growing and most valuable brands in the world. These brands have been accepted and adopted as cultural currency, not corporate intellectual property. When Coca-Cola’s consumers managed its brand via Mentos and YouTube – bringing back to it the authentic joy, play and community the brand has lost – the lawyers lunged into action. They thought they were protecting the company’s trademarks, yet failed to realize that the intangible assets of the brand – the value of the brand – live with the consumer already. There are trade offs, to be sure.

Companies behind the times or out of touch will complain that these examples don’t apply to them. They are in manufacturing. Their business is more complex. With those excuses, they are saying the consumer does not really matter; that the company knows better. That’s one option. Companies that get it – and that will win tomorrow – will solve these challenges.

Ask the team at Toyota’s Scion division how easy it was to build completely customizable cars for a generation that demands personalization. Or ask Target how easy it was to extend its “design for all” claims all the way to the consumer. Guess who is designing the next line of products at the world’s hottest retailer? Yep. The same brand managers who changed the company’s name to Tar-jay.

Patrick T. Davis is CEO of Patrick Davis Partners, the national brand strategy and management consulting firm he founded in 1996.  Mr. Davis advises Fortune 500 companies nationwide, and sets the strategic direction for the firm’s network of offices in Atlanta, New York, St. Louis and San Francisco.  He is also the publisher of Unbound Edition.

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On the other hand, have you ever seen a great DJ? It’s a completely different game. A DJ takes the content produced by others, adds some beats of his own and produces a curated, unique sound.

Some think DJing is not a skill, but they are wrong. It absolutely is a skill. It’s curation. And it’s a parallel to what gives the average man on the Internet power. DJs find songs and co-create something beautiful. This is what people can do on the Web too.

Like DJs who take their record collection and pick out the songs they want to focus on for that evening, a Web savvy individual can design a site that curates all the information around a particular subject matter and create a space for people to come to and find everything they need. You have “bands” like The Wall Street Journal and The New York Times, and then you have “DJs” like The Drudge Report and The Huffington Post.

The Web savvy individual now has the same opportunity to publicly establish his or her own “brand” that recognized media personalities enjoy. When a larger audience starts reading a News Corp. author on RSS feeds rather than directly from a publication, the emphasis shifts from the publication to the author, creating one global media outlet with franchise personalities. It’s the ultimate media meritocracy, and it kills the “record label.”

Of course, once a Webmaster breaks the strong association between the columnist and the publication, there is no motivation for the publisher to continue footing a paycheck. Are we heading toward an era where Dow Jones and The New York Times Company simply establish their own RSS of independent journalists who meet their brand of journalism? That’s a different article, but the discussion must be going on at those companies.

This article is about the power of average man through aggregation and curation. Anyone can harness the breadth and depth of the Internet to change the world.

Matt Drudge is the ultimate example of this. He produces minimal content on his own, but the service he provides for his users is invaluable. Someone can go to The Drudge Report with the understanding that the content is generally focused on politics, and through that one site catch up on all the news they need.

And the amazing thing is what Matt Drudge does is not really that difficult technically. Anyone can curate through a MySpace page, blog or buy a URL and create a website. That step is easy.

The skill is being the curator. Anyone can try to be a good DJ, but, just like any skill, the talent rises to the top. Finding that useful, engaging information is not easy.

Your curation cannot just be the act of culling every piece of information and pulling it all to one source. To be worthwhile, it has to be thoughtful and carefully selected with a purpose. Done properly it can be the power to unite a group to affect change. You can be the DJ of change. When you gather around socially and engage in community, you can change things.

You can get books published .

You can circumvent government dictatorships.

You can transform political discourse and get presidents impeached or elected.

This is an age where the pen or more specifically, the keyboard, is mightier than the sword, truly. Sharing across the globe is easy with dissemination of information like never before. Mobility is on the rise. Information and media lives in more places than ever before and anyone has the ability to harness it and change the world.

This is why you see old media getting so upset. Watching yourself gravitate toward irrelevance is not a fun proposition. However, it’s been said many times, and many a Darwinian casualty has experienced the ramifications of not following this little piece of advice: Adapt or die.

Now, you control your experience. You own your media and can shape it. If you don’t like something your outlet is doing, you can force change in real time. The situation a few months ago at Digg illustrates this perfectly. The users told the curators what they thought and the curators listened and acted…on the users’ behalf. This new experience empowers the audience to take an active role as “journalists” through their responses.

This is true democracy. This is the reason why you have to worry about net censorship and net neutrality. Because, as it stands, you have more power than you can even realize. Whether you are one person in an apartment or a massive global corporation, with the current media landscape the way it is, you have the power to get on a computer with Internet access, type on the keyboard and change the world. And that’s where it’s at.

Boyd Pearson is Editor-in-Chief of Unbound Edition and a Senior Associate with Patrick Davis Partners, a national brand strategy firm with offices in Atlanta, St. Louis, New York and San Francisco.  Mr. Pearson contributes to the firm’s Digital & Content Strategy Practice. 

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#1: More Friends, Fewer Strangers.

“Mr. Wright’s decision to pay $600 million for iVillage — at the time, $41 for each unique user — stunned some analysts. By comparison, the News Corporation had paid $28 for each unique user for MySpace a few months earlier. Mr. Wright’s boss, the chief executive of G.E., Jeffrey R. Immelt, has since said that the company “probably overpaid.””

Without arguing the relative value of these two deals, one thing is clear: The true value of a community is evaluated on registered users, not on raw “traffic” to the website. If you’re still subscribing to the billboard theory of consumer connection (i.e. they drove by, therefore they engaged with us), slow down for a minute.

Markets are conversations. You don’t have true conversations with strangers—at best, you merely have small talk. The value of anonymous “unique viewers” pales in comparison to the registered users of your site.

Even the metric of “registered users” can and should be further deconstructed. Given the number of people who register and abandon accounts online, it is increasingly valuable to understand the active user base vs. the casual user base vs. the idle (or abandoned) user base. Beyond valuing a community, it also goes to understanding which users should be the focus of your conversation.

The value of a user in your community depends, then, on two key criteria: Activity and identity. The more information your visitors elect to share with you (and this is an important distinction), the higher their value in the conversation.

If you’re obsessed with driving hordes of “visitors” to your site, reconsider. You can only build long-term value if you grow relationships. You’re simply burning bandwidth if you neglect to make a few (thousand) friends. The strength of those relationships was a key factor in iVillage surviving the original dot com bust.

#2: Digital’s Invited to the Party Now.

“The Web site’s ad sales teams are now fully integrated with the other online properties and the traditional television operation.”

“More strategic integration with “Today” has been crucial to the nascent turnaround, said Phil Griffin, senior vice president of NBC News. For instance, the hosts of the morning program have stopped parroting the line, “For more information, go to iVillage.com,” he said. “Now we try to direct viewers to the site by telling them what specific three related stories they can find if they go there,” he said.”

Say goodbye to the idea that your “web” efforts live in a silo out on the edge of your media plans. In the past, the idea that “we should throw this up on the website, too” was about as cutting edge as it got. Usually this meant tossing some ill-prepared print collateral to a web monkey in a dark corner office (these were my own simian origins).

The most successful companies invite digital to the conversation early. Rather than treat digital properties as second class citizens, it’s increasingly important that both ends of the media spectrum are woven together. As NBC learned, leveraging the viewership of Today required a content-based pitch with a clear incentive to visit. This is only possible in an integrated environment.

#3: Co-Authored is Copasetic.

“Deborah I. Fine, iVillage’s president, has secured new partners to replace Hearst, including theknot.com, a popular wedding planning Web site, and PopSugar, a fast-growing online community aimed at younger women. Meredith Vieira, a “Today” co-host, has started to blog for the site, and Ms. Fine has created a new weddings section. “I really think we are doing it right,” Ms. Fine said.”

If you’re daunted by the prospect of finding the resources to create content for your strategy, take a cue from the collaborative nature of the web. Don’t approach your content strategy with the belief that you must be the only voice in the room. Instead, identify the editorial tone of your properties and partner accordingly.

Co-authored and aggregated content allows you to provide users with a sufficiently rich experience while activating the many-to-many social aspects of the web. In iVillage’s case, they managed to leverage PopSugar and theknot.com’s own network while expanding their content selection. Combined with exclusive, original content by Vieira and Fine, iVillage is in a much stronger position thanks to distributed content sources.

#4: Curators Welcome.

“One reason for increases in ad revenue is that iVillage has started working more efficiently with advertisers to weave products deeper into the fabric of the site, said Mr. Naylor, NBC Universal’s senior vice president of digital media sales. For instance, when Schick wanted to advertise razors in the context of things that “simplify your life,” iVillage pulled related articles from across the site and aggregated them on one page for the company.”

The “burn and bury” approach to managing web content is a thing of the past. If you’re featuring content prominently for a short period of time, but then failing to manage it beyond initial exposure, you’re missing opportunities.

As iVillage’s experience with Schick shows, knowing and mining your content archives over time will help you discover revenue and reinvent older content in a new context. Within your digital team, you need someone with an archivist’s mind, who can work with an editor in chief to bring fresh perspectives to the table.

Who manages your site’s analytics? Often this person is an ideal candidate, since they spend a great deal of time looking at content in the “big picture” of search engine placement, referring links, and user behavior.

#5: No Failures, Only Results.

“You assume in the beginning that a mention on the ‘Today’ show will drive tremendous traffic, but it’s not that easy,” she said. “We like where we are now, but boy did we have some tough learning.”

Even so, Ms. Comstock said it was unfair to call “iVillage Live” a failure. “The point of the show was to experiment,” she said.

Stop thinking of your efforts in terms of “hit or miss.” People like Hollywood endings and industrial-scale disasters because they’re simple stories to tell. Unfortunately, this leaves little room in the media’s eye for a learning process.

A digital content strategy requires you cut yourself some slack. Run with an idea, and if it’s not working, be willing to put it aside. The value is in what you learn from each experiment, and in this context, there is no such thing as failure.

This also means checking your high hopes with a humble approach. Cease and desist all claims that you’re going to “revolutionize” anything. Each bold claim is a blade you’re sharpening for your critics.

Eric Raymond is a Senior Associate with Patrick Davis Partners, a national brand strategy firm with offices in Atlanta, St. Louis, New York and San Francisco.  Mr. Raymond contributes to the firm’s Digital & Content Strategy Practice, and he is a regular contributor to UnboundEdition.com. 

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The AdWords program uses keyword-based advertising in the form of “sponsored links” that appear on the right side of the browser window when a search term is entered. The model enables advertisers to write their own ad text, select the keywords that will trigger their ads, and pay only when users actually click on the ads. Google’s standard agreement with advertisers requires that the chosen keywords and ad copy be relevant to the advertiser’s Web site, products or services and holds the advertisers responsible for the content they choose. The agreement also prohibits trademark infringement, and the company has implemented a Trademark Complaint Procedure allowing trademark owners to submit complaints about the alleged misuse of their trademarks in the AdWords program.

As trademark owners are finding out, however, these parameters fall short of preventing competitors from piggybacking on established trademarks and brands. If a company’s competitors can choose a keyword that matches that company’s existing trademark, then consumers can be lured to the competitor’s product instead of the initial product they desired. For example, a user who searches for “Tiffany & Co” will receive a list of search results with relevant Web sites, including Tiffany’s authentic site, as well as “sponsored links” to businesses that sell various brands of jewelry. These paid advertisements may be helpful to users searching for general information about jewelry. However, a user searching specifically for Tiffany & Co. jewelry may initially be misled by these “sponsored links.”

Some argue further that Google’s resulting profit is unjust and that the AdWords program leads to the misappropriation of the trademarks’ goodwill because Google allows companies to purchase their competitors’ trademarks as keywords.
 

What’s the big deal?

When a competitor purchases your trademark as a keyword through AdWords, Internet users will see your competitor’s ad on the right side of the page when they search for your trademark. This is disconcerting to trademark owners worldwide. Why should competitors be able to hijack your trademarks and brand to attract consumers looking for your product?

Trademark infringement occurs when a trademark connected to a particular product is used by another company in a way that confuses consumers about the source, affiliation or sponsorship of that product. In the case of AdWords, consumers searching for a specific brand may have used the trademark as a search keyword, but instead be directed to a competitor that has purchased the trademark as a keyword to prompt an advertisement for its product. Once on the unintended competitor’s Web site, the consumer will likely realize the mistake, but may be content to stay and purchase the competitor’s product.

The value of a brand heavily influences a consumer’s loyalty because a strong brand – clearly exemplified by a thoughtful trademark – differentiates a company from others in the marketplace. If one business is able to profit from the value of another business’s brand, then the consumer’s loyalty can potentially shift, thus diminishing the brand’s value.

Since the inception of AdWords several years ago, a handful of trademark owners around the world have sued Google to stop the sale of their trademarks as keywords. In August 2005, GEICO sued Google to stop the sale of its trademarks as keywords and to prevent the display of third-party ads in search results where users searched for its trademarks. The parties settled the case on undisclosed terms. Currently, two other U.S. cases are dealing with the matter. In February 2006, parent company of payday loan provider “Check ‘n Go” sued Google for selling its trademark “Check ‘n go” as a keyword to its competitors; the case is pending. In May 2007, American Blind & Wallpaper Factory Inc.’s case against Google was ordered to a jury trial set for November to determine whether AdWords violates U.S. trademark law.

Internationally, a landmark decision created a decisive roadblock for Google’s profits from selling trademarks as keywords. In June 2006, Louis Vuitton won in the French Court of Appeals against Google for the sale of Louis Vuitton trademarks as AdWords. Google was ordered to pay more than $350,000 in damages and prohibited from using Vuitton trademarks in its AdWords program.
 

What does this mean for trademark owners?

Currently, it is more productive to address the problem of your competitors purchasing your trademarks as keywords with the competitors themselves, rather than Google. While U.S. courts currently have not determined whether Google is liable for trademark infringement in the sale of trademarks as keywords, and many have found no liability for Google, it is much easier for a court to come to the conclusion that a competitor trading on the goodwill of another business is liable for trademark infringement in this circumstance. Perhaps the outcome of the pending American Blind & Wallpaper suit will help clarify Google’s level of responsibility with respect to trademarks.

In the meantime, it is wise to carefully select keywords and copy for ads, and avoid the legal risk of using competitors’ trademarks as keywords and in ads.

As long as courts continue to struggle with the trademark law issues raised by Google’s AdWords program, the intersection of the law and the Internet with respect to online keyword advertising will remain a gray area worthy of close monitoring for businesses and Google alike. 

Julie C. Jennings is an associate at Senniger Powers LLP, a national intellectual property law firm based in St. Louis, Mo. Ms. Jennings’ practice is concentrated in all aspects of domestic and international trademark law, including infringement matters and domain name disputes.

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