I recently published a blog with my thoughts on the trademark issue as it relates to affiliates. Of course I received some heat over this as it is a hot topic in the affiliate world right now.

Amazingly, I run in to merchants who do not bid their own trademarks and allow affiliates to do it.

My thoughts on this:
You have an affiliate program with the hopes of getting incremental traffic. This means traffic, and sales, that you would not have gotten if you did not have an affiliate program. Allowing an affiliate to bid on your domain name and on your pure trademarks means that this affiliate is only claiming sales that were already your sales to start with.

Again, affiliates are supposed to drive new traffic. When you calculate what you can afford to pay your affiliates, you should factor in the value of a new customer as that is what you should get from your affiliates…new customers. If you pay someone who only bids your trademark a 10% commission (the same as the other affiliates), and another affiliate goes out and gets a new customer who has never been to your site before and you make that sale, that sale has a MUCH greater value to you so you should pay the affiliate in the second scenario 2x to 3x as much as you pay the one who only camps out on your trademark.

My Proposal to You
If you are absolutely against using paid search and want an affiliate to cover your trademarks, I will do this for 50% (1/2) of your posted commission percentage. I will use my own funds to pay for the ads covering your trademarks. You will save money this way and you will know that you have a professional covering your trademarks and protecting the image of your company.
Your part in this arrangement is to forbid all other affiliates from bidding your trademarks and enforce this policy. Know going in that you will likely have to remove some of those who you have considered top producers. Also know that by removing these affiliates you are helping your company’s bottom line by paying 1/2 of what you once did to keep these terms covered in the PPC landscape. You will not lose any overall sales by doing this. Many of the affiliates who infringe on merchants’ trademarks will refuse to stop and will ultimately have to be removed from your affiliate program. Again, this is a good thing.

So there you have it. I will cover your trademarks for 1/2 your posted commission rate. Contact me if you want to discuss this further.