The general consensus on PPC bidding is that it should not be permitted. The rational being that a brand is already known so a merchant should not pay commissions to an affiliate who is also bidding on that brand. All of those sales would end up with the merchant anyway.
Really? What about competitors? The search engines allow ANYONE to bid on a brand or trademark. If you have a popular brand you will see competitors appearing in the paid search results. Don’t believe it? Just try a Bing search for “Under Armour” and look at the variety of PPC ads that appear. Now narrow it down even further and try a search for the exact domain name, underarmour.com – and look at all the PPC ads that still appear. Most companies that prohibit brand and/or trademark bidding proactively monitors PPC violations and comes down hard on their own affiliates who don’t follow their stated terms. Doing that does cost money in resources and time (I have no axe to grind with Under Armour – they are a fine company and have a fine affiliate program and am just using them as an example. I could just as easily have picked “SkullCandy.com” or other known brands.)
An alternative might be to allow PPC bidding on their brand by any active affiliates. That might help knock their competitors out of the search engine results pages (SERPs). So, what’s better – paying a commission to your own affiliate for a sale that you “might” have made without that affiliate’s PPC ad -OR – or not losing that commission percentage at all because THE SALE WAS LOST TO A COMPETITOR?
That is a question that you need to answer for yourself. We are about to launch a new program in the business checks vertical and we will launch with an “Open PPC Policy.” We don’t have the time or the expertise to effectively promote via PPC – so we will let our more knowledgeable affiliates do it – for themselves and (ultimately) for us. YMMV