Is there any viable way to use the trademark name in an advertisement? I mean, if your selling a product, and its a trademark product, how are you supposed to get around it, if you can't use its name?
You can submit something stating why you're authorized to use the word. Other than that, you're out of luck because the trademark owner had Google implement trademark protection on their name. You could contact the TM holder and get them to allow your AdWords account # to use the TM, not sure how well that'd work.
You will need written verification from the trademark owner authorizing you to use that trademarked term. Otherwise, you are not allowed to use the term, even if you are selling that very product. If that is the case, you will simply have to go as specific as you can without using the trademarked term.
but other people running AdWords are selling the product, and even using the trademark name in the URL.
The trademark owner can control the use of their mark. When a holder notifies adwords about restricting the use of their mark, then adwords will require that you obtain permission from the TM holder. Each company has a different policy and some only allow their largest accounts permission to use their mark - or only authorized resellers, or no one at all. You will need to contact the TM holder for permission - and if you can't get it, you won't be able to use it in your ad. You do not have any automatic rights to use a TM just because you are actually selling the product. I retail a product where the TM doesn't allow any use of their mark on the Internet - i.e. they will terminate your account if you sell their product online as they only want brick and mortar stores - and want the online business for themselves.
Like any prudent compant Google is protecting themselves from legal action reagrding TM infringement. You will definitely need to provide some form of verification to Google that you are a licensed dealer, agent, etc. for the XYZ product. Google still may refuse just to be on the safe side - documentation can be easily forged and Google has a lot to risk to "do you a favor". It may not be worth pursuing - ever thought of using terms like "name brand" or "official", etc.?
If you can't get approval from the TM holder or the affiliate company you are working with than don't do it. Even if others are that doesn't mean it's ok. Try to get permision and if that doesn't go then work around it. Like Ipod, "mobile music", "portible player", "small electronics" etc...