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If it's any consolation, someone using your url as a keyword should get a pretty lousy QS before too long.
Also bear in mind that broad match being what it is, you may not necessarily be able to tell for a fact that they're using your exact url as a keyword.
Can a competitor target my exact url as a keyword?
They can in the US, Canada and the UK. Not 100% sure, but I think that in European markets its still protected (as long as your URL is a trademark). No idea about Asian markets. Where are you advertising?
Is this legal, and if not , what is my recourse.
IANAL either, but as far as I'm aware its legal (in the UK at least). However its still a fairly mute point, so sending a cease and desist can sometimes put enough of a frightener up them to get them to stop.
Also, I've worked on some very big brand PPC campaigns where competitors have bid on brand terms and as netmeg said, the QS often makes it very expensive for them. If you are bidding on your URL in PPC, try working to increase your click thru rate by trying a variety of creatives. The higher your CTR, the lower the competitors QS and the more it costs them.
[edited by: JamieBrown at 4:14 pm (utc) on July 28, 2008]
If I were to attempt a cease and desist, it could scare them, but I need backup/proof before sending.
Amazingly enough, Google will allow another advertiser to use your URL as that advertiser’s display URL (provided that the destination URL points to your page). To do otherwise, they say, would go against their “ad auction principles”.
Obviously, this isn't really a problem since it's unlikely direct competitors would pay to drive visitors to your site. It is a huge issue when dealing with affiliates though.
[edited by: Channel01 at 8:04 pm (utc) on Aug. 5, 2008]
I think they should have a policy to stop this. We have a client who has 9000 uniques a month from url type-in in G.
Therefore If I was a competitior, I could potentially poach some of the 9000. As no one else is targeting this competitor, you could steal it for the minimum bid/click.