There’s a real reputation-meets-revenue battle happening between online.

Today, any advertiser with a Google AdWords account can buy virtually any keyword to advertise its own goods, regardless of whether said advertiser has the rights to use the word.  This is particularly troublesome for brands that have spent decades burnishing a brand and consider the associated brand names to be reputational assets of great value.  If you go to Google right now and type in “LVMH” (the owner of numerous brands including Louis Vuitton and Hennessy), one of the sponsored ads shouts “Designer Handbags 70% off,” with a URL that includes the Louis Vuitton name. That has LVMH steamed and the company sued Google in Europe for trademark infringement.

Well the ruling is in… and it’s a split decision, advantage: Google. Upon Google’s appeal of earlier rulings (that didn’t go its way) the highest court in the EU has determined that - on its face – the mere fact that an LVMH-protected word is available for sale by Google does not mean that Google is in violation of LVMH’s trademark protection. 

Specifically, the court has said that the search company is not violating trademarks if (a) its automatic ad system is judged to be “merely technical, automatic and passive” in its operation, and if (b) the company is not aware and cannot be expected to fully police all the words that advertisers purchase.

Since computers are programmed by humans – and those folks at Google are pretty darn smart – this is fishy to me, but ok.  It was not a flat-out win for Google, however, as the court also ruled that Google must remove said ads if the brand owner formally complains about an advertiser infringing on its marks.  If Google fails to do this, the court says it won’t be so helpful in protecting Google’s revenue stream the next time around.

The court also reinforced that Google could be held liable for selling keywords that openly encourage or facilitate counterfeiting, which – in luxury categories – is a win (or at least a booster shot) for the brand owners.  And lastly, the court also clarified the responsibilities of advertisers who mustn’t be found “using such keywords arrange for Google to display ads which do not allow Internet users to easily establish from which undertaking the goods or services covered by the ad in question originate.”

I don’t know about you, but if I’m an advertiser that gets into hot water for legally buying a word that Google sold to me – and I’m not trying to sell knock-offs – I’m naming Google in my legal response.

LVMH has been on the attack re. this issue for a long time, which is understandable. eBay has also been in the conglomerate’s in the past. This is a worldwide, high-stakes game such a company must play in all sales channels: right here in New York, LVMH was front and center in the effective elimination of a thriving Louis Vuitton counterfeit trade on Canal Street. The company will flood Google “Don’t Be Evil” Inc. with complaints until the search company will at least have to question what (and how much) it is defending by taking on massive legal expense (and bad PR) in order to make money from advertisers leeching off others’ trademarks.

And speaking of buying Louis Vuitton knock-offs on the street, a LVMH board member point of view has been (quote) “Under trademark law anywhere in the world, brand owners have the right to stop third parties from using their names. “Why make an exception for the digital world?”

 As the division between online and offline “worlds” continue to disappear, why indeed?

Poor Dominos.

In a nutshell, two employees posted a “prank” video on YouTube that shows them at work spitting and sneezing on food, putting cheese up their noses and then onto pizzas, passing gas on meat then – ouhhhh – putting said meat on the food…

As the beauty says to the gross Ben Stiller character when he asks her out (in that great philosophical movie, Dodgeball), I think I threw up in my mouth.  Just a little.

I coach corporate clients on how to manage their reputations and build brands online. I show companies how to proactively create meaningful online interactions with prospects and customers. I use case studies to demonstrate the usefulness of one social community vs. another.  I present lessons that apply to all businesses, and some that are industry-specific.  And I do train companies how to assess and react to negative content on the Web.  Be proactive and, when you must, here’s how to react to problematic online content.

And then there are things that you just can’t plan for. We’ve seen vanity urls (walocaust.com, ihatestarbucks.com) and online stunts created by disgruntled employees and angry investors.  We’ve seen rats scurrying along the floor inside a fast food restaurant.  These kinds of events are now so frequent that they can and should be part of a company’s online crisis strategy. [NOTE: You have one of those, right?] 

But two employees, with no ax to grind, demonstrating phenomenally bad judgment?  All a company can do in advance is reinforce its own employee policies with respect to unacceptable behavior and… make sure the Internet is covered.  I’m sure that disparaging the company to this extreme is already grounds for dismissal, and these two MENSA members have been fired.  And arrested and charged with a felony.

Unfortunately, Dominos is taking a real hit.  But the company has come out swinging online - play fire with fire – and I give them enormous credit for that.  Take a look at Dominos’ own YouTube response (click HERE if you do not see the video below):

If I were advising the company, I’d suggest a 5-point action plan over the next 90 days.  What they’ll actually do?  We’ll have to wait and see.

In the meantime, if you order a pizza and think you see boogers… I’M KIDDING!

Whoops!

In December, Domino’s created an online-only promotion offering a free pizza to site visitors using the promo code ”bailout.” The promotion never got final approval internally… but someone didn’t tell the pizza retailer’s online tech team.

A clever consumer living in a suburb of Cincinnati somehow caught on to the live promo code last week and before you can see “meat lovers special,” Domino’s had given away 11,000 free pizzas.  In less than 24 hours.

The news spread quickly, fueled in part by online moms at sites like www.CincyMomsLikeMe.com.  If you’re curious about the power of online moms and aren’t familiar with the Motrin Moms event last November, I really would suggest you check it out.  Do not screw with these ladies!

Things became even more complicated by the fact that Domino’s retail stores are franchised.  A man who owns 14 locations in the Cincy area thinks he gave away somewhere between 600 and 700 pizzas.  Corporate has promised to reimburse all franchisees.  Maybe the stores will even see an upside:  the event got hundreds of people to try the new ordering engine at Dominos.com (which is pretty good, by the way).

Depending on how you look at things, Dominos is either lucky or unlucky the promotion wasn’t discovered two days later – on April Fool’s Day…

Now that Google is laying off staff and its stock price is down, I have to wonder if perhaps it’s time to accept the fact that giving people scads of personal experimentation time may not be so, uh, productive. 

First it was the company’s effort to keep us from the 21st century version of drunk dialing:  drunk e-mailing.  Cute. 

Now it’s Latitude, a program that allows users to track others with their mobile phones.  Each user must opt-in and can select which of her contacts may be permitted to track them.

I find this to be neither cute nor safe.  Anyone could get a hold of a user’s phone and change the settings, or a person could give a Latitude-enabled phone as a gift.  And once a phone is enabled, a second party could mask his own phone’s ID, thus ensuring that the first party – or victim, in this case – would be unaware that she was being tracked.

Google says that individuals’ increasing willingness to share personal information, on sites like Facebook, have encouraged the company to create services such as Latitude.

This doesn’t really fly.  My willingness to change my Facebook status to reflect that I’m enjoying a cup of coffee doesn’t extend to letting the universe know that that coffee house is on Lexington Avenue at 77th Street.  And how that location might change minute by minute.

It’s also a potential Big Brother nightmare.  Location data that may be useful to friends and family could also be valuable to the government, your competition, an angry ex or thieves happy to rob your home when you’re not around.  And while Google says it won’t store the data (having faced criticism on its privacy policies in the past), the government or others could still ask Google to help track someone being investigated.  “As it stands right now, Latitude could be a gift to stalkers, prying employers, jealous partners and obsessive friends,” says Simon Davies of Privacy International.

I see no clear need for this: it’s simply not a case where the existence of technology creates a unique and meaningful improvement or advantage.

I like Google, but its fundamental drawback is that it grants no status to honest or credible content.  Perhaps this is par for the search engine course – at least for now.  But products that overtly weaken personal rights and privileges?  That’s a slippery slope that I do not believe is worth the trip.
Google_Latitude Privacy_International

The online/social media environment has greatly amplified the opportunities for customers who love you (or hate you) to spread the word – and spread it more frequently, to a broader audience and with a greater array of tools.

Colloquy has released a white paper reflecting the results of an October 2008 survey that measured the intersection between reward program membership and online word-of-mouth (WOM) activity among those members.

While I hope it won’t come as a big surprise, membership in and usage of a brand’s reward program is a significant predictor of a consumer’s likelihood to speak positively about your brand online. The more active the frequent user/shopper/flyer in your program, the greater the chance that you will experience the happy halo effect of him/her praising you online.  This is particularly true among women, who have become a driving force in terms of discussing and sharing products and experiences on the Web (Motrin, anyone?).

The larger take-away here – the hardest one, I think, for large companies to absorb - is that everything is connected now.  The idea that you could treat your customers one way and your employees another, without affecting your public persona, is no longer relevant.  Cut your charitable activities without the “outside world” finding out?  Forget it.  Increase mileage requirements in your frequent flyer program, and it will not only affect the opinions of your members, but also those members’ Twitter readers (who may not even be your customers).

One person with an anonymous blog and a catchy URL can impact your reputation around the world.  

Of course The New Champion Customers is just a tip of this iceberg, but it offers an interesting angel and chock-full of great charts.  Take a look.

Motrin momsColloquyWOMMA

Have you ever emailed someone at 1am and regretted it later?  Consider poor Jerry Maguire.  If the movie was made today, surely Jerry would have sent his manifesto by email in the middle of the night.  And you just know that any missive starting with “It’s 1 AM and this might be the bad pizza I had earlier talking, but I believe I have something to say…” should not be sent.

Now there’s hope.

Google has launched a little feature called Mail Goggles that tries to protect you from yourself, late at night, when you’re drunk or otherwise under the influence and should therefore be nowhere near a keyboard.  You set the time range during which you want the feature to be active and then – if you try to send an email during that period – Mail Goggles forces you to answer 5 math questions before the message can be sent. 

If you answer such mind-benders as ”11-2=?” wrong or you’re too slow, all you get is a note saying “Water and bed for you.”  No email crime committed, no sentence before the proverbial judge later.

Ars Technica has called it “a breathalyzer test for your Gmail.”I think this is great.  Now if they could only figure out how to deposit the same kind of feature on everyone’s work email…Mail Goggles

In a report published this past week, an assistant professor at HBS charged Google with taking advantage of individuals who mis-type the names of URLs.  Cybersquatters buy URLs betting that people will misspell the URL (typing “xpedia.com” vs. “expedia.com,” for example) and then they use Google Adsense on these misspelled URLs to make money.

Ben Edelman says that this is “one of the unsavory ways we all end up paying Google,”  and that while “users don’t have to write Google a check to receive Google’s services… one way or another, Google manages to get users’ money.”

Unsavory? Unsavory.  Compared to what… AIG spending $30,000 on spa treatments?  The Keating Five? 

Let’s take a look at this.

On its face, typo-squatting is not illegal.   The law is not very interested in those who register words that are similar to established URLs, unless the new site violates trademark law for the purpose of competing with the original trademark’s owner.  So if “Orbits.com” benefits from those who can’t spell “Orbitz” – but it’s in some entirely different business and is not trying to compete with or nefariously deceive those looking for “Orbitz.com” – then more power to ‘em.

Banking, for obvious reasons, attracts evil-doers but, again, one needs to consider each circumstance individually.  It is legal to buy and use a URL such as www.bankofdamerica.com (which was hardly a site at all – just a cascade of links, per the above graphic), which was most definitely not trying to compete with Bank of America or lead BofA customers astray.  It had a sponsored link to www.bankofamerica.com and other ads served by Google Adsense for which the deep-thinking bankofdameria crowd was paid.  It was, on the other hand, ruled illegal to purchase mortgagewellsfargo.com for the purpose of deliberately misleading users interested in Wells Fargo services. 

I guess what I’m saying is that if a website is deliberately trying to rip me off, then I care.  But do I care if an individual makes money from Google Adsense when I go to wakeupwalmart.com (free speech) or, conversely, wallmartsucks.com?  Not really.  And do I believe that Google has some liability here or, worse, is acting in an unsavory manner?  Not so much.

I know this may surprise some of my gentle readers, and I am hardly letting Google off the hook for instances of trademark infringement for which the company has been seen as liable.  I just think that Edelman, a professor who issued an academic report in the McAfee Security Journal – not exactly a newsstand favorite – managed to use this mysterious “typo-squatting” term to get a lot of undue attention this week with an over-the-top exclamation about Google. 

Facebook appears to be selling virtual gifts like crazy. 

What’s a virtual gift?  It’s an image of something (a birthday cake, a beer, a rose, a bottle of champagne) that you can send to a fellow Facebooker for his or her birthday, new job or… just because.  The image is then posted to the recipient’s Facebook profile, and the gift giver can specify whether her name and message are visible to the public or only to the recipient.

Lightspeed Venture Partners is now estimating that 10% of Facebook’s revenue ($35 million) comes from the sale of these virtual gifts.  In assessing what seems to sell the best, Lightspeed says that holiday-themed gifts are a bonanza in November and December and account for 40% of the year’s sales.  They have also observed that 80% of all sales are made off the first visible page of gifts.

I suppose none of this should be a huge surprise:

• At a price of $1 for something that is delivered instantly, it’s a nice ADD-like way to wish someone a happy birthday, or an even easier way to suck up to someone you’ve neglected.

• Holidays – big pain.  Very few people have the time or energy to send (real) cards anymore.  And, frankly, after factoring in the cost of a good card and the stamp, $1 isn’t too bad.

• We ride in herds.  Wisdom of crowds, and all that.  If it’s not on the first result page of Google – or on the first page of Facebook virtual gifts – forget it.

$35 million for tiny images that cost Facebook essentially zero is impressive.  I believe I’ve given Facebook $20-30 myself for the privilege of sending little blue robots and flowers now and then.

Facebook   Virtual gift

And speaking of www.consumerist.com, I just read about a New York event put together by The Climate Group out of London that “vetted solutions that actually do result in both CO2 and dollar savings for everyday people.”

The article I spotted mentioned that several brands were eager to be (voluntarily) involved in order to show their clima-worthiness, including Dell, Chase and Target.  There were a bunch of video screens in Times Square, Dell laptops you could use to check out www.together.com (the campaign was called “Together”) and so on.

So the www.consumerist.com connection is… Wouldn’t it be fantastic if one website built its credibility as THE source for determining whether a company is really green or not?  You could go to the site, type in any company’s name and the site would present its “Green Sheet” on the company’s activities, charitable donations to environmental causes (if any), its estimated CO2 impact in, say, the last 25 years and an overall rating on a scale of 1 to 10.  The site would also present a curated selection of articles and news about that company related to its environmental impact.

www.treehugger.com is the closest I can think of – here is what comes up when I typed “General Motors” into the site’s search box – but the site doesn’t pull everything together (as in my Green Sheet idea) nor is it comprehensive.

It’s an interesting thought:  would you pay a subscription fee for a site that was truly sort of the “Consumer Reports of environmentalism?”  The one place you would know you could visit for the right amount of information on any company you could imagine?  I think I would.
climate changewww.together.com

Very, very interesting lawsuit making the rounds in Europe right now…

 The European Court of Justice, Europe’s highest court, is hearing a case that will decide whether Google violates trademark law by allowing companies to purchase brand names to trigger pay-per-click ads.

The case stems from an earlier lawsuit filed in France by Louis Vuitton against Google.  LVMH claimed that Google was violating the law by allowing marketers to purchase, say, “Louis Vuitton replica” or “Louis Vuitton fake.”  Louis Vuitton actually won this case in France but Google appealed.   Le Meridien Hotels filed a very similar case – again in Europe – and also won.

Google has had better luck in the US although it has been sued there, as well.  The only case that went to trial was a suit filed by Geico – and Google won.  The judge said that there was no evidence that consumers were confused by the ads that appeared as a result of PPC term that included the company’s name.  American Airlines has also filed a similar suit. 

If the final decision is that Google cannot sell terms including proper nouns/company names to any entity that does not own that word or phrase, this will have major impact on search and search marketing.  After all, 444,000 results come up on Google for the search term ”Walmart S**s” alone…