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Beware the brandjackers

What are brandjackers, and why should you bother about them? Clothing and other brands lose billions to online abuse, as brand saboteurs hijack search engine marketing, infiltrate social media, steal web traffic and peddle fake goods. Even if you don’t seek to buy fake goods, you have to be vigilant when shopping online, it is suggested.

The Intellectual Property (IP) and Science business of Thomson Reuters last year officially completed the acquisition of MarkMonitor after regulatory clearance in the United States. David Brown, president, IP Solutions, Thomson Reuters, said: “Brand owners encounter a myriad of challenges in today’s online environment, from digital piracy, to counterfeiting through social media, to planning for the launch of more than 1,000 new gTLDs [generic top-level domains].”

Products include MarkMonitor Brand Protection, for safeguarding brand equity, revenue and reputation from paid search scams, unauthorised sales channels, counterfeits, false association, impersonation and cybersquatting. The company argues that an entire online supply chain, parallel to legitimate distribution channels, is thriving around counterfeit goods. These channels include B2B exchanges (also known as trade boards) which traffic in counterfeit goods at wholesale level, in turn fuelling e-commerce sites to serve consumers. The Italian boutique clothes and accessories company Furla last year spoke of its use of MarkMonitor, to protect its brand online, at product, distribution, and advertising stages. Fredrick Felman, chief marketing officer of MarkMonitor, said: “Our technology monitors more Internet channels than Furla can manage independently, so we are able to expose and quantify the scope of the threat against their brand. Counterfeiters operate over a wide array of online channels including B2B exchanges, e-commerce sites, and message boards, so it is crucial that these are monitored, and those results are analysed and prioritised for appropriate enforcement.

From a study last year of clothing and luxury goods shopping online, MarkMonitor found that one in five bargain hunters in the US and Europe mistakenly shopped on e-commerce sites selling counterfeit goods, while looking for deals online. Deal seekers outnumbered consumers seeking fakes at the rate of 20 to one.

Using its proprietary technology to examine online shopping patterns, MarkMonitor worked with Nielsen, a research firm to look at what consumers watch and buy, to analyse anonymised data from Nielsen’s online panellists in six countries over nine months. Nearly five million shopping sessions were surveyed in that time, focusing on the search terms the shoppers employed, such as ‘fake,’ ‘replica,’ ‘cheap’ or ‘discount,’ to determine their motivation. About one in five US and European bargain hunters (such as, those searching on terms such as cheap, discount, or outlet) landed on sites selling counterfeit rather than legitimate merchandise. Conversion rates—defined as putting something in the shopping cart—for those site visits were higher than conversion rates for visits to sites selling legitimate merchandise.

Fredrick Felman at MarkMonitor said: “Consumers are being waylaid by rogue e-commerce sites, causing brands to lose business. The findings from our Shopping Report underscore the importance of developing proactive brand protection strategies in the digital age.”

Also examined were multiple demographic factors such as age, income, education levels, and household size. There were minimal demographic differences between online consumers who seek out counterfeit goods and those who are simply bargain hunters for legitimate goods. For example, among US consumers, roughly a quarter of online shoppers for legitimate branded goods (26 percent) and those shopping for counterfeit goods (26 percent) have a four-year college degree or higher. Some 37 percent of US shoppers for legitimate goods have an annual income less than $50k; among US shoppers for counterfeit merchandise, 38 percent earn less than $50k annually. Among European Union countries, the percentage of consumers who earn more than 54,000 euros a year is the same for both shoppers of legitimate and counterfeit goods (17 per cent.)

Eric Solomon, senior vice president, global digital audience measurement, Nielsen, said: “These findings really challenge the common assumption that consumers who purchase counterfeit goods are distinctly different than those consumers buying genuine goods.”

Many counterfeit goods are priced to appear as legitimate goods on sale, often discounted at 25 to 50 percent off the legitimate list prices, which is comparable to end-of-season or other sale prices. These plausible prices allow bargain hunters to feel they are getting a good deal on legitimate merchandise, especially given that rogue websites may feature brands’ recent marketing campaigns and photographs.

A MarkMonitor Shopping Report is available for download at https://www.markmonitor.com/2012shoppingreport/.


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