CONTROVERSIAL NEW changes to Google's search advertising system could see Scottish companies facing significantly higher marketing costs.

Google - whose motto is Do No Evil - announced on Friday that, from May 5, anyone will be able to bid for the sponsored links attached to a trademarked word.

Under the current system, only the owner of a trademarked word can buy the attached sponsored links, and they are able to do so at a relatively low rate. For example, if someone types in Bank of Scotland, then only the bank's official sites appear on the right-hand side of the search engine page.

Now Google plans to do what it did in the US four years ago and open up the auction process for the sponsored links space, meaning the highest-ranking, and therefore most commercially valuable spot, will go to the highest bidder, not necessarily the company that owns the trademarked name.

It is thought the financial service industry, alongside other industries with strong brands and deep pockets, will be hardest hit by the changes.

Questions have been raised over the legality of the move, with some branding experts claiming the change is likely to spark a major challenge in the courts. Google contests this, claiming it has carried out an extensive legal review and is satisfied that the planned changes meet with UK trademark law.

A spokeswoman from the Advertising Standards Agency, however, confirmed it had received industry complaints that the move contravened rules, and was looking into them.

Andrew Girdwood, head of search at Bigmouthmedia - the UK's biggest digital marketing company - said Google's move was "massive" and would immediately change the relationship his company had with all its major clients.

He said some of BigMouth's larger clients were paying as little as 1p a click for the Google-sponsored link space. He said: "That will change and could go up to as much as £5 as people start to bid more and more.

"Google will tell you that it is about the user, that it is levelling the playing field, but if you are an auctioneer you want as many people in the auction as possible. It is going to make a lot of money ... I would not be surprised if a legal action comes out of this."

However, he added that some of BigMouth's smaller clients, who didn't have such well-established brands, would welcome Google's move.

PAUL Adams, head of page search at digital marketing agency ambergreen, said there were going to be "happy people", such as small companies selling goods and services generally associated with bigger companies and brands, and "unhappy people," who will see an "invasion of all kinds of competitors".

He said Scotland's financial services industry would be hard hit because it has strong brands and lots of money to spend. "This is going to cause a lot of ripples," he added.

Owen Kelly, chief executive of Scottish Financial Enterprise, said: "This is very new to me but web-based marketing is a quickly evolving area and financial service companies operating, as they do, in a mobile and fast-moving trading environment will need to invest some time in understanding the implications of this development."

Matt Brittin, director for Google UK, said the company's goal was to give consumers, "greater choices to help them make informed decisions".

Brittin said that, since introducing this policy in the US and Canada in 2004, Google had "learned that users found the greater number of ads relevant and helpful".

He added that advertisers were used to online competition: "Advertisers are accustomed to the fact that users searching for their trademarked terms as part of a phrase may see ads from competitors.

"For example, someone typing in ACME loan' or ACME credit card' will see a range of relevant ads."

He refused to disclose how much Google expected to profit from the planned move.