If your company has a strong brand with a loyal following, that’s obviously a good thing. The bad news is that it also means that there is a very good chance that counterfeiters are on to you. And in an ironic twist, all the time and energy that you put into managing your online presence has actually helped ensure this.
In the not-too-distant past, retailers only had to deal with the problem of brand theft and counterfeiting in the brick-and-mortar realm. Fake Louis Vuitton bags, Rolex watches and cubic zirconia were relatively easy to spot, and were on the whole relegated to street vendors.
Today, the threat that counterfeiters pose is much broader and should not be taken lightly. The online world is rife with counterfeit products, and perpetrators are using increasingly sophisticated techniques, such as 3D printing, to manufacture goods and parts.
This might come as a rude shock, but an astonishing 98 per cent of the brands whose online presence is monitored by NetNames—an online security firm, which employs me as Product Director of Brand Protection—have been subject to brand infringements of which they weren’t aware. If that makes you feel exposed, you’re not alone. In a recent survey we conducted, we discovered that 60 per cent of businesses have no system in place to monitor or protect their intellectual property online.
The ubiquity and sophistication of fakes today is such that even some respected retailers unwittingly sell counterfeit goods. This hurts more than just brands. Millions of jobs are put at risk. Looking at just one hard-hit industry, prescription pharmaceuticals, we actually found more out-and-out fraudulent businesses operating online than legitimate ones, with lots of additional shady websites in the middle. And make no mistake, the accuracy and creativity that these fraudsters use to replicate branded products is truly frightening because it poses a health and safety threat to customers, not just an economic threat.
Counterfeiters targeting average consumers rely on online advertising, often using spam email and, more convincingly, social media — the world’s biggest free advertising network. Fraudsters also exploit mobile app stores. And please be advised that our research suggests that mobile users are less likely to question app legitimacy on their phones than a URL to which they are directed on their computers.
Simply put, between on-the-ground counterfeiting and online, social and mobile infringements, no business can afford to just hope the issue will go away. It won’t. More and more cybercriminals are undercutting and damaging the reputation of brand owners every day. And there is no question that the problem will get worse.
By the end of 2015, the International Chamber of Commerce (ICC) estimates that the value of counterfeit products will reach US$1.7 trillion, about two per cent of global economic output. International trade accounts for more than half of counterfeiting, while domestic production and consumption accounts for between US$370 billion and US$570 billion of this staggering number. Previous ICC estimates placed the total economic value of counterfeit and pirated products at US$650 billion in 2008.
The only question is what you plan to do about it. You need to get educated and get a plan in place. There are plenty of online resources to help you educate yourself. This blog, for example, offers advice on how to protect your brand from online ad fraud. The International Anti-Counterfeiting Coalition, the world’s largest non-profit organization devoted solely to protecting intellectual property and deterring counterfeiting, is another good resource.
As for a plan, here are some steps to help you fight back.
First, take stock of your online brand presence — including your website, social media and mobile components — to identify cracks in your armor. Conduct an initial audit of fraudulent activity on social media platforms and mobile app stores. The audit should focus on the key issues that are most likely to affect your individual brands and trademarks.
Next, prioritize. A scoring system specific to the most important brands and infringements will allow for strategic decisions based on activity seen in real time; and it will enable your organization to focus on the enforcement that really matters.
Now you can get down to the business of taking the counterfeiters down. At this point, brand owners must assume responsibility for detecting and prioritizing action against individual infringements. But you can remove or disrupt infringing material squatting on social media platforms in several ways. These include using the platform’s own reporting mechanism for intellectual property infringements, using search-engine mechanisms to remove links, and directly asking the infringer to take down the fraudulent content. This combination can be surprisingly effective.
Counterfeiting and brand theft are crimes that have been given an unlimited new life online. It’s more important than ever for companies to take precautions against counterfeiting across all channels. No one is immune, and it’s all changing so fast that every brand owner needs to have a plan in place to protect their business.