Ought to Firms Let Affiliates Use Trademarks in Domain Names?

Firms need to be careful when allowing affiliates to use their trademark in domain names.

I do a lot of “affiliate arbitrage” by promoting affiliate programs through paid search platforms such as Google Adwords. This used to be really easy. But then Google decided to limit identical “display URL” for each search term to one. So if you were promoting Orbitz.com then you had to use a different domain name to direct traffic to the landing page. If you used Orbitz.com, your ad wouldn’t show if someone else had an ad with the same domain.

That creates a sticky situation for firms with affiliate programs. Ideally, these firms let affiliates bid on their trademarked terms, but what display domain name can the affiliates use? One simple approach is to allow affiliates to register similar domain names, such as OrbitzSite.com. Web surfers will click these ads and know they are going to Orbitz. But then the firm is essentially giving permission for people to register domains with its trademark, which will make any lawyer uneasy.

I was reminded by this when I recently received an email from LifeLock. The firm basically stated “Thanks for all of your help. Now get lost.”

First and foremost, LifeLock would like to thank each and every one of you for your continued dedication and success as a LifeLock CJ Affiliate. As of April 2008, LifeLock has over 900,000 subscribers, a number that could not have been achieved without your help.

Today, due to exponential growth within the Affiliate program, we would like to communicate fresh compliance guidelines for all Affiliates. The following outlines changes in how to market LifeLock specifically through the use of Domains/URLs, and Keywords. These changes have been put into place to protect LifeLock’s brand and trademarked terms and help our partnership’s continued success.

LifeLock won’t let affiliates use any of LifeLocks trademarks in domain names they own. The firm also won’t let affiliates bid on LifeLock’s trademarks.

There’s a problem with this policy that LifeLock doesn’t understand. Ahead of implementing the fresh policy, a Google search for “LifeLock” would return a list of ads promoting the firm. Sure, LifeLock had to pay an affiliate for referring business if the searcher didn’t click directly on LifeLock’s in-house ad. But at least competitors weren’t getting the business. Now if you search for “LifeLock” you’ll see all sorts of competitors’ ads. These competitors no longer have to bid against LifeLock’s affiliates. LifeLock is losing business.

But that doesn’t mean firms ought to just give free reign to affiliates. A while back I promoted an online content site that required me to use an alternative domain name for my landing page. I asked the firm if I could use “mydomain.com”, and it approved. Regarding a year later I received an anonymous offer on the domain name and sold it for $1,500. It turns out the buyer was the firm I was promoting. It had given me permission to register the domain name, and then bought it from me since they wanted to launch a fresh product using the domain.

There’s an notable balance with affiliates and domain names. Going 100% in either direction can cause headaches. Here’s a suggestion: firms ought to register and set aside 10 domains for affiliates. The links can lead to any of these domains, making it easier to promote them through pay-per-click marketing.