Zalora Caught Buying Google AdWords Against Small Rival Below Cepek

Here we go again, yet another brand buying a Google keyword search on a competitor's brand mark. There was an uproar on Monday when Riana Bismarak discovered that Zalora had placed an ad against Below Cepek, her online fashion store for low cost women's outfit. Immediately people closest to her went on to her defense and many had seen the move as being unethical.

For a short while on Monday, a search on Google for belowcepek would display an ad for Zalora along with the address below-cepek.zalora.co.id but the web page didn't seem to last very long as it was no longer accessible one hour after Bismarak announced the her discovery.

This is not the first time Zalora has employed this tactic as earlier this year it had launched a similar ad campaign against fellow e-commerce site Luxola across the region. At that time, its response to the campaign was that it didn't do anything illegal or against any rule.

Bismarak said on Twitter that she can't understand why Zalora, a multinational retailer, would target her small company which sells fashion items for less than USD 10 and operating only in Indonesia. She felt both proud and sorry that Zalora had resorted to such a campaign given the disparity in sizes between both companies.

Gw sih cuma bisa bilang WOW! Perusahaan segede @ZaloraID smp beli keywords nya UKM kyk gw. Bangga n ngenes hahahaha pic.twitter.com/2USB2IVHwL

— Riana Bismarak (@RianaRee) July 22, 2013

Zalora may not have broken any rules and as a matter of fact, it is a very common strategy as Google's model for keyword search advertising is based on a bidding system in which the highest bidder would get the spot on top of the search results. It is however amusing that Zalora would resort to this strategy as it shows a level of insecurity on the company's part.

The strategy may be deceptive but Google keyword search ads are actually placed over a different color background marked with an "Ad" mark. Having said that, there are people who still can't tell the difference or don't know that there is a difference, other wise Zalora wouldn't have said that these kinds of ads had been working well for the company. It doesn't contravene any rule that Google has put in place, but it's not exactly ethical, not to mention a cheap shot.

Abang Edwin, a media consultant who's done work with Yahoo, The Jakarta Post, and Juara advertising agency, doesn't see any legal issue with the move. "I don't see anything illegal in this matter, Below Cepek may have had some traffic stolen due to the ad placement but it's also likely because the company's strategy may not have been as "smart" as Zalora's."

However, Edwin finds it ethically deplorable. "Zalora's greed clearly shows by stealing traffic from Below Cepek and the company's reputation will suffer for it". Indeed, a quick look at Bismarak's Twitter stream would show a significant outpouring of support for her and her company, admonishing Zalora for its strategy. It's not hard to sympathize with Bismarak given the David vs Goliath proportion of the issue.

For what it's worth, Zalora has refrained from buying keywords to Below Cepek and posted an apology on Twitter about the incident although it was a more general apology without mentioning in details what it was about.

Sorry for the inconvenience. Kami memahami situasi yg terjadi saat ini&sdng berkordinasi u/ mereview Dynamic Keyword Insertion yg digunakan.

— ZALORA Indonesia (@ZaloraID) July 22, 2013

Should Below Cepek launch a legal action over this incident or is two public shaming enough of a deterrent to prevent this sort of thing from happening again?

As for whether Google should be allowed to sell keywords to competitors, Australia's High Court has no problems with it and it is also not illegal in the US.