This question does the rounds a couple of times a year,  and I've just been asked it yet again.

What should a brand owner do with affiliates advertising on search engines using the owners brand names?

The bottom line - for an established brand it makes no sense to pay commission on visitors that were heading to your website anyway. Achieving high rankings for brand related terms is relatively easy for a good optimisation firm. Trademark law provides suitable legal cover to prevent infringement and the search engines have also gotten much better recently at quality checking their paid listings. Good affiliate network providers should also be able to write in provisions about how affiliates can market themsleves.

NB: for further information see Search Engine Marketing Trademark Law ISEDB December 5, 2004, 8:14 PM

But how do affiliate networks sit against search, should I be doing one or the other?

There is no doubt that affiliates and search are two powerful marketing methods, that both have proven ROI.  The question for a brand manager is do you allow affiliates to bid on search engines at all? if so how do you control their activity? 

We think a brands search marketing and affiliates should complement each other, why? becuase affiliates generate traffic from many sources, not just search engines.

Looking specifically at Pay Per Click search engines as a traffic source there has been in the finance sector a trend, predicted by Neutralize (*\*) in February 2003 Report: Performance-based Marketing for search marketing firms to work to cost per aquisition (CPA) targets, effectively replacing the role of the affiliate agency, and giving brand control and predictability back to the brand owner.

Once you get the balance right between your own search marketing and your affiliates, you can happily run both side by side.