Social media has both directly and indirectly fuelled the problem of counterfeiting for many global brands – and this problem shows no signs of abating.
Like it or loathe it, social media is now a vital part of the marketing mix for any ambitious brand. Indeed, on the face of it, it appears to be the most important development in the world of e-commerce since the creation of the Internet itself: a free channel to market that can touch over 40% of the world’s population on a daily basis – an astounding figure that is rising fast. The right marketing messages can pass across the globe faster than any traditional media campaign. Social media reaches audiences regardless of language, religion or race. It offers a platform to share – in fact, it has even been responsible for redefining the very word ‘share’, along with ‘like’, ‘tweet’, ‘tag’ and ‘socialise’.
In any given minute online, nearly 350,000 tweets are sent, 280,000 Snapchats are shared, over 4.1 million ‘likes’ are given on Facebook and over 300 hours of YouTube video are uploaded. This happens every 60 seconds of every day of the year. Brands today have no choice as to whether they embrace social media; rather, their only choice relates to how to do it. Social media thought leader Erik Qualman sums up our thirst for social media and acceptance: “At a minimum the majority of search dollars will flow to a social media model because people care most about what their peers think and the technology is there for that information to be quickly shared on products and services.”
We crave likes, followers, pins, hearts and connections on our social media networks because they have become the currency of success. Marketing model measurements are no longer about return on investment, but about Klout scores, the social media metric of influence. These days, companies place the same importance on recruiting chief digital officers as chief executive officers and chief information officers.
But do brand holders place too much emphasis on social media? For all of the cost benefits that it offers, it also presents significant risks. Many in the marketing community are simply unaware of these risks; at worst, they choose to ignore them. Social media has both directly and indirectly fuelled the problem of counterfeiting for many global brands – and this problem shows no signs of abating.
If you walked into an average shop anywhere in the world, would you be persuaded to buy a product by a complete stranger shouting at the top of his or her voice about its merits, or dissuaded by another stranger making wild accusations concerning service, product and value? Probably not. But that wariness disappears when we visit what is seen as a warm and comfortable social media environment. How genuine are the five-star ratings or customer reviews? We are far less trusting of the person we see in the shop than of a digital entity. Brands and criminals alike know this, and it is creating a whole new area of malpractice.
Before we examine that issue, it is important to understand that social media has become the world’s biggest marketplace. There are over 2.2 billion active social media users today – around 30% of the world’s population – with Facebook adding a staggering half a million new users every day. A new generation of consumers is emerging that builds its beliefs, values and spending habits on peer reviews. To echo the earlier words of Erik Qualman: people care most about what their peers think. Ninety percent of consumers trust peer reviews, even if they have no idea who has written those reviews. This can be incredibly powerful for a brand – but it can also pose a very real danger to its reputation and ultimately its revenues.
Only 15 years ago, the Consumers’ Association was one of the most powerful organisations in the United Kingdom. Its monthly magazine Which! gave the low-down on products and services through independent reviews, and it could make or break a brand. Today, a bad review can be passed around the world and back again in a matter of seconds, due to the pervasiveness of social media in our lives. Websites such as TripAdvisor have become the most powerful and potent force in the travel and leisure industry.
However, can we always trust what others say? How easy would it be for someone to manipulate social media to give the impression of trust and popularity? If we are so influenced by peer reviews, how easy is it to trick people into buying counterfeit goods or trusting fake reviews? Unfortunately, it is easier than you might think.
A simple search on the phrase ‘buying social media likes’ will find a number of organisations which offer a range of services to fit your social media tastes. Ten thousand Facebook likes can be purchased for just $300; 50,000 Twitter followers for $125; and favourable TripAdvisor reviews for as little as $20 each. In the space of a few minutes you can create a social media footprint comparable to a major brand for less than $1,000. Some brand holders’ intentions may be driven by vanity rather than any maleficent purpose; but for others, creating a fake social media profile is a preparatory step in counterfeiting or fraud.
It should be said that the same search on buying social media ‘likes’ will also reveal a number of articles explaining why legitimate brands should not adopt this practice – with the main one being that you will ultimately be found out. The reputational damage caused by such a revelation can far outweigh any benefit received from promoting yourself as socially savvy.
The continued growth of social media networks represents both an opportunity and a threat for brand owners and trademark professionals and it is no longer acceptable practice to ignore it and hope that it goes away. Any anti-counterfeiting measures taken by a brand holder should include robust strategic policies for understanding, prioritising and acting against online infringements. Research shows that 93% of executives think that protecting online assets will become more important or remain just as important over the next year. The same research reveals that 60% of businesses have no system in place to protect intellectual property online. If up to 40% of the global population is using social media on a daily basis, the need for a plan to take advantage of this medium while minimising the associated risks is paramount.
In National Trading Standards’ 2014 IP Crime Report, the growth of social media was noted as facilitating criminals’ exploitation of platforms, as was the fact that it has become the sales channel of choice for counterfeit activity. Research shows that this is indicative across all industries. Operation Jasper, launched in Summer 2015, was the largest enforcement action of its kind aimed at counterfeiting on social media. Numerous government bodies worked together to remove over 4,000 Facebook listings, as well as to conduct raids of 12 properties.
Social media environments pose a unique set of concerns for brand owners and trademark professionals. With such an enormous amount of relatively unregulated content moving at such a fast pace, understanding the threats that this environment presents is key to deciding on a strategic policy to mitigate potential brand and trademark infringements.
The core problems that brand holders face include:
- links contained in social media status updates and profiles to websites and social media pages selling counterfeit goods;
- social media pages offering fake money, gift cards and promotions associated with a brand;
- trademark infringement through the illegitimate use of logos or affiliation;
- malware, spyware and ransomware distribution through fake social media profiles;
- the registration of user names, profiles, handles or avatars that contain brand names, trademarked terms or copyrighted images. Social media networks will often grant any username (except for public decency reasons), irrespective of whether it infringes on a trademark; and
- threatening, defamatory or false content that proliferates at high speed.
While infringers register domain names containing brands or trademarks for their own use, social media users apply similar tactics to registration profiles and content. The use of brands, trademarks, logos and copyrighted materials in user registration data and content is prolific and follows similar patterns to other types of online infringement. Brands and trademarks are used to:
- drive traffic to specific content;
- advertise counterfeit goods for sale;
- lead users to content outside a particular social media platform;
- impersonate an authorised distributor for fraudulent purposes; and
- legitimise third-party content.
While most social media networks fully comply with requests to remove IP infringements, the onus is on the brand owner to find the content, follow the procedures and submit the request.
The nature of social media infringements is also evolving. Real-time video streaming app Periscope is creating headaches for brand and IP holders, while tomorrow’s social media disrupters are still just a glint in their creators’ eyes. One thing is for sure: the art of counterfeiting and the skills of counterfeiters have always adapted to technology better than consumers – and sometimes even better than the brand owners. Innovations such as three-dimensional printing may remain a pipe dream for many brand holders, but counterfeiters are already considering them – if not using them – to drive down replication costs and increase profit margins further. And do you know where you can find the latest design for your favourite branded product? You guessed it: on social media.
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Haydn Simpson is commercial director for Western Europe at NetNames. With over 15 years’ industry experience, Mr Simpson is responsible for driving NetNames’ commercial growth across the territory of Western Europe, working with clients and partners to optimise their online presence, protect their brands and ensure that their internet activities align with their overall strategic goals. Previously, Mr Simpson led the successful global growth of NetNames’ brand protection business. NetNames specialises in being the strategic partner of choice to help ambitious brands to be present, protected and prosperous on the Internet.