New index highlights damage from brand-jacking

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By: Wise Marketer Staff |

Posted on May 17, 2007

A new quarterly 'Brandjacking Index' that measures the effect of online threats to brands has been launched by MarkMonitor, examining how popular brands are being abused on the internet, and which industries are suffering the worst damage.

The index is based on continual research into the ever-adaptive tactics of brandjackers, including cybersquatting, false association, pay-per-click (PPC) fraud, domain "kiting", objectionable content, unauthorised sales channels, and phishing scams. The index is currently tracking the top 25 brands from the 2006 Top 100 Interbrand study, along with additional Interbrand-ranked companies for a more complete analysis of each sector.

The phishing data that MarkMonitor analysed was based on feeds and fraud broadcasting from a number of international ISPs, e-mail providers and other partners, and examines a large pool of phishing e-mails each day (currently 16 million, the company says). According to Rose Ryan, a research analyst for IDC, "Fraud, counterfeiting and other abuses against brands are increasing in intensity and numbers as brands and businesses move online. Protecting brand reputations, customer relationships and revenues from online abuses is becoming as important to enterprises as securing their networks, data and systems."

Cybersquatters are the big problem
Cybersquatting - the unauthorised use of a brand name in an internet domain name - is by far the most frequent form of abuse with more than 275,000 instances being recorded by MarkMonitor's index study. Because of the strong brand association created, cybersquatting is often combined with another form of abuse such as e-commerce, pay-per-click fraud, and domain name kiting (using the 5-day domain registration grace period to test-market many domain names in quick succession).

But Frederick Felman, chief marketing officer for MarkMonitor warns: "Brand holders face a double whammy. Not only is the volume of these abuses significant but abusers are becoming alarmingly savvy marketers. Brand abusers are employing online marketing techniques such as search engine optimisation to siphon traffic from reputable sites."

The index therefore identified cybersquatting as a key driver leading to other abuses that further degrade brand value, customer loyalty and brand sales.

Media companies hit
An analysis of eight industry sectors revealed that 40% of brand abuse is directed at media companies, both traditional and internet-based. According to comScore's recent data, media web sites represent 10 out of the 15 most heavily used web sites, which shows that the most often visited online brands are attracting the most abuse. The next most abused sectors were automotive, consumer electronics, high-tech and financial services, each representing between 11% and 16% of abuses.

Gone phishing?
The index found more than 980 kited web sites targeting financial services brands (more than double that of any other sector). Meanwhile, phishing scam incidents (where users are directed to an unauthorised, fraudulent web site in order to steal banking details, passwords, identity data, and so on) increased by 104% compared to the same quarter one year earlier.

MarkMonitor attributes this rise to advances in phishing technology designed to thwart phish-blocking web browsers and other consumer protection software. The actual number of brands phished each month stood at 229 in March 2007, due to optimised phishing operations, mature technology, and greater economic efficiencies.

Phishing attacks against financial services companies, including large banks and credit unions, represented 41% of all phishing attacks in Q1 2007, compared to 29.4% in Q1 2006. Attacks on online auction brands fall below those against financial institutions for the first time, representing 38% in Q1 2007.

"Criminals have learned the rules of online marketing and how to exploit the system to attack the brands, revenue streams, channels and reputations of legitimate companies faster than businesses have migrated from physical security models to the cyberworld," warns Irfan Salim, president and CEO for MarkMonitor. "Brandjackers are adaptive, security-savvy and opportunistic. The Brandjacking Index aims to raise awareness and arm brand owners with the information they need to protect their brands and stakeholders."

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