Making brand protection more consumer-centric
This is an Insight article, written by a selected partner as part of WTR's co-published content. Read more on Insight
Online brand protection has evolved dramatically over a short space of time. Online fraudsters, counterfeiters and pirates are becoming more adept at targeting consumers and taking advantage of legitimate brands. The scope and intricacy of the problem have grown significantly over the past few years due to the global nature of business, the burgeoning consumer appetite for online shopping, the super-efficiency of search engines and sophistication of online marketplaces. This means that brands are fighting abuse across many fronts – from counterfeiting and phishing to brand and domain infringement, from cybersquatting to outright fraud.
If businesses rely on traditional approaches to brand protection in the face of this onslaught, effective brand protection will be extremely difficult to achieve. To put this into perspective, consider the nature and scope of counterfeiting and brand abuse.
The rise of counterfeiting and brand infringement
Counterfeiting is a serious global problem: it costs brands and economies millions and continues to grow. According to the Organisation for Economic Cooperation and Development, the global trade in counterfeits accounted for 2.5% or $461 billion of world trade in 2016. In terms of the United Kingdom, research by the Centre for Economic and Business Research showed counterfeit goods cost the country’s economy £17.3 billion in 2016. On top of these financial losses, 72,000 jobs were lost.
A report commissioned by the International Trademark Association and the International Chamber of Commerce stated that the global economic value of counterfeiting and piracy could reach $2.3 trillion by 2022.
To emphasise just how damaging criminal activity is to brands, a 2017 report by research firm Frontier Economics stated that the wider social, investment and legal costs could take the total to $4.2 trillion, imperilling 5.4 million “legitimate jobs”.
What these figures demonstrate is that brand protection is becoming increasingly important and it remains an ongoing task that must adapt to the changing environment. But what needs to be done to make it more effective? And what should brands look to do in order to protect both their customers and themselves?
A change in approach
For companies, these new online battlegrounds with counterfeiters and criminals pose a significant challenge. Brands do not necessarily have the budget, resources or in-house skills to effectively go to war with their opponents on so many fronts. So how can they prioritise protection areas or refine their methods and counter-measures?
The problem is highlighted in the MarkMonitor report Online Barometer: Global Online Shopping Survey 2018 – Facts, Figures and Fakery, which found that 30% of all consumers have at some point unknowingly purchased counterfeit goods online. This expanding vortex of fraudulent activity means that brands can no longer afford to be complacent when it comes to enforcement and takedowns. Not only is it vital to safeguard their reputation, revenue and customers, it is also something that customers expect them to do.
The same report revealed that 88% of consumers believe brands should be doing more to protect them from buying counterfeit goods. Nobody wants to waste their hard-earned cash on a handmade high-quality item that was actually mass produced in a factory using cheap materials. While a proactive approach is needed, what does this look like in practice?
Secure your assets
Brands invest millions in their online channels and must make every effort to ensure that their assets cannot be easily compromised by others. Successful companies rely on a global web presence to build and strengthen their brands. In today’s environment, brand owners must make critical decisions about what, where and how to secure and protect their valuable trademarks on the Internet in order to remain effective and help combat constantly evolving brand abuse. Domain security should be paramount and practices such as locking core domains at the registry level, employing two-factor authentication for accessing domains and the implementation of IP access restrictions should be done as a matter of course.
Take the fight to the consumer
While the challenge of brand protection may have increased over the past few years, it is certainly not insurmountable. By focusing efforts in the right areas, brands can continue to protect themselves and their customers efficiently and cement their positions in the respective marketplaces. The consumer-centric approach protects the path that consumers take to find brands, by creating and targeting a clear picture of what they see when searching for a brand across websites, marketplaces and social media. In another MarkMonitor study of 600 marketing decision makers from six countries, more than 84% said consumer behaviour plays a major role in how their brand protection programme is prioritised.
Understand the customer: Typically, there are two types of consumer when it comes to shopping online. The first is the well-intentioned consumer who wants to buy genuine goods but gets duped into purchasing fakes. The second type is the one willing to buy counterfeits. The appetite for buying fake goods exists but is only a small percentage of consumers. The legitimacy of a product is of no interest to them, they are simply looking for the best deal. These consumers may not be a priority, whereas the well-intentioned consumer who wants to spend their money on your brand certainly is.
By focusing efforts on where such well-intentioned consumers shop online, brands can identify the most visible instances of infringement as quickly as possible. By prioritising this – while also ensuring that all remaining visible sites on search engine results, online marketplaces and elsewhere are legitimate – brands protect their reputations and their consumers.
A consumer-centric approach to brand protection aims to recapture revenue from well-intentioned customers by identifying the various ways in which they are duped into making counterfeit purchases. From here it is about finding the results that are relevant in the search term and geographically, and mimicking the consumer’s search patterns.
Consumer-centric approach in practice: To put this approach into practice, its context must be considered: 91% of people do not look beyond the first page of search engine results, and about 70% do not go past the first page of marketplaces. When it comes to search advertising, the first advertisements on the first page receive the most significant attention, while only a fraction of users will click on the first advertisement of a second page.
Bringing this back to the well-intentioned consumer, research also shows that these shoppers rarely go beyond the first few pages (known as ‘visible pages’) on search results or marketplace listings when looking to buy. They are more likely to change the keywords that they are using and search again.
As a result, the ideal approach would be to focus efforts on these pages in search listings, marketplaces and paid search ads so that they are as clear as possible from counterfeit, pirated and grey-market listings. This way, it is possible to protect the well-intentioned consumer from buying pirated and counterfeit products, while recapturing revenue and ensuring maximum return on brand protection investments.
Access to real-time analytics
The value of real-time data is undeniable, but the truth is that the battle against counterfeiters is ongoing. Sites and listings are taken down, but new ones inevitably spring up. To truly measure the effectiveness, organisations should look closely at more detailed analytics. Such analytics must also be available in real time. The world of counterfeiting moves at such a rapid pace that periodic tracking has limited effectiveness.
Brands also need to clearly track all their key performance indicators (KPIs) – including compliance, activity, volume, quantity, value and financial impact. By measuring each KPI individually and then side by side, it is easier for all parties involved to accurately determine whether the percentage of total infringements is decreasing over time. Data has proved that with the appropriate enforcement 80% to 85% of online counterfeiters targeting a particular brand will stop shortly after the enforcement has been made.
Affiliate guidelines should be revised
In digital channels, partners can create a multiplier effect for brands by driving new customers and web traffic to generate additional revenue. However, partners – including affiliates, franchisees, independent representatives and dealers – may engage in non-compliant activity online by misusing trademarks, logos and branding in their promotional efforts. Misuse, whether intentional or not, can cost legitimate sales, erode a brand, siphon away traffic, confuse customers and drive up advertising costs.
It is important to advise partners and resellers on what they can and cannot do regarding domain names and social media accounts. Third-party partners should not be allowed to use a brand name in their domain name or within a social media registration.
The activity of affiliates should be monitored to ensure that it does not adversely affect the marketing of a particular brand. Each individual brand owner will have preferences as to how much or how little they wish their affiliates to market and should provide tight guidelines around that. However, just as importantly, they should also monitor for infringements against that agreement to ensure compliance.
Providing guidelines will help to clarify whether partners can bid on search keywords, the channels and marketplaces that they can sell through, and whether they can use a brand’s logo or images for promotional purposes.
Review social media and keep on top of all platforms
Social media is a double-edged sword. While it allows for effective promotion and communication among customers and target audiences, it is also easy for malicious individuals to register fake accounts that can damage a brand.
Every platform should be registered by the company brand – even those that may be rarely used – to ensure that the organisation has control of them. It is likely that brand variations may still be snapped up by fraudsters, but this provides a stronghold on essential brand assets.
With social media it is vital to proactively monitor what other people are saying about a brand, as well as profiles that may infringe on the brand’s intellectual property. It is also worth seeing how competitors are communicating with their audiences on each channel before identifying how a brand can set itself apart. There are various threats which require monitoring, including impersonation, false association and partner/affiliate compliance.
In addition, if social media is a customer-service tool, guidelines should outline how this procedure works, how employees should respond correctly to queries and what they can do to escalate issues to a more senior member of staff. Finally, internal social media rules for employees should be reiterated to reflect brand values whenever possible.
It is a fact that brand protection is an ongoing challenge for organisations. Yet it remains a critical element that businesses must get right in order to safeguard their customers, their reputation and, ultimately, their bottom line.
The scope of brand protection is increasing dramatically and instances of infringement and abuse are widespread and multifarious. While it is impossible to stop all infringements, brands can take a targeted approach to their protection strategies through a consumer-centric attitude that is fit for today’s challenges, focusing their protection efforts on where they are most needed: at the customer level, removing visible infringements and claiming back lost revenue as a result.