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News

Brandjacking Report From MarkMonitor Focuses On Luxury Brands

MarkMonitor : 15 September, 2010  (Technical Article)
Brand protection company MarkMonitor has produced a report showing the online fraud levels targeting luxury brands using non-legitimate web sites
MarkMonitor has released a special edition of the Brandjacking Index, focused on luxury brands. The report reveals how suspected counterfeiters attract at least 120 million annual visits to their ecommerce sites. This figure represents almost half the traffic generated by the legitimate dot com sites for the luxury brands in the study.

To produce the report, MarkMonitor analyzed public data using the company's proprietary algorithms to examine five leading global luxury brands. The data shows how fraudsters intercepted significant amounts of traffic searching for the luxury brands by subverting legitimate search engine marketing techniques.

"Fraudsters are savvy online marketers and are extremely effective in generating high volumes of traffic," said Frederick Felman, CMO of MarkMonitor. "These scammers dismiss the rules of professional conduct and have created a highly-visible online ecosystem specializing in criminal behaviour and fraud."

Popular search engine marketing tactics used by the fraudsters include cybersquatting, black hat search engine optimization (SEO) and paid search scams, resulting in higher costs for interactive marketing campaigns and lost traffic for the brands. Cybersquatting continues to be a popular method of intercepting Internet traffic for fraudsters with over 1,100 sites containing one of the five luxury brand names in the domain name to capitalize on direct navigation behaviour and optimize SEO rankings. Fraudsters also invest in paid search advertising with more than 50 suspicious vendors purchasing one of the five luxury brands as keywords to drive traffic to their sites using paid search scams.

In addition to the marketing and promotion vehicles used by online fraudsters in the luxury segment, the special edition of the Brandjacking Index also examined suspicious ecommerce channels, identifying nearly 6,700 suspect counterfeit sellers for the five brands used in the analysis. Wholesale trade websites were the most popular channel for fraudulent activity with nearly 4,000 suppliers generating 12,000 listings on 12 business-to-business (B2B) exchanges. Suppliers promoted manufacturing ability capable of producing thousands of pieces annually, with some offering capacity in excess of a million pieces. The study also identified more than 1,400 suspect counterfeit sellers generating almost 3,600 listings on 10 business-to-consumer (B2C) exchanges, including auction sites and classified ad sites, and 1,200 dedicated e-commerce sites offering suspicious goods.

The amount of suspicious activity reinforces the findings of the most recent Brandjacking Index Year in Review by MarkMonitor, which found abuse targeting luxury brands experienced the greatest increase among verticals at 23 percent year-over-year growth.

The Brandjacking Index is an independent report produced by MarkMonitor that tracks and analyzes online abuses of leading brands. The cornerstone of the report is the volume of public data analyzed by MarkMonitor using the company's proprietary algorithms - no customer data or proprietary customer information is used to create the Brandjacking Index. This special edition of the Brandjacking Index drew conclusions based on data from major search engines, online marketplaces, Whois records and Alexa traffic estimates.
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