Brandowners say online threat of counterfeiting increasing

Counterfeiting and piracy is having an effect on the bottom line of nearly 50 per cent of brands, while almost 60 per cent of decision makers believe the challenges brought by advanced digital technologies and the dark web will make brand protection more difficult over the next five years, a new study has found.

According to the findings from the 2018 MarkMonitor Online Barometer, keeping ahead of counterfeiters and other criminals is becoming increasingly challenging in an online and digital world as more brands fall victim to the illicit activity.

The survey of 924 marketing decision makers from nine countries, found that 41 per cent of brands are experiencing an increase in brand infringement, with 47 per cent revealing they are losing sales revenue to counterfeits and piracy, which for one in three brands is a revenue loss of more than 10 per cent. And for 45 per cent of brands, counterfeit-sponsored advertisements on social media has proven costly.

The future doesn’t look that rosy either – 38 per cent believe they are more likely to be affected by lost sales due to counterfeit goods in the next five years, with 58 per cent saying brand protection will become more difficult during that time.

Respondents pointed to advances in digital technologies as the main culprits behind the challenge of keeping a brand safe online. This included: advances in social media (61 per cent); big data (52 per cent); chat/messaging (52 per cent); artificial intelligence (51 per cent); dark web (48 per cent); and augmented reality (47 per cent).

“The issue of brand protection has always been a challenge for businesses and it’s an area that is growing significantly based on the increasing threats of counterfeiting, piracy, cybersquatting and other brand abuse,” says Chrissie Jamieson, VP marketing at MarkMonitor. “According to the research, brand protection will continue to grow in complexity and as a result it’s vital that organisations adapt their approaches accordingly.”

However, MarkMonitor discovered that despite the concern that brand protection was going to be increasingly difficult in the years to come, only 64 per cent of those surveyed said they had an online brand protection plan in place and 54 per cent claimed the value of brand protection is underestimated in their organisation.

The current strategies in place were found to cover websites (64 per cent), social media channels (57 per cent), ecommerce sites (48 per cent), mobile apps (46 per cent percent), as well as augmented reality applications and experiences (22 per cent).

While 88 per cent of respondents believed their strategies were effective, 57 per cent still thought that brand protection policies would never be effective enough to counter all aspects of counterfeit and infringement activity.

That said, 56 per cent of respondents have taken legal action against counterfeiters, with 23 per cent saying the action resulted in a takedown of infringing content or products, while 24 per cent won financial compensation. Indeed, 12 per cent said they will invest money in legal action against counterfeiters over the next five years.

But 87 per cent of those interviewed also said they believe social media companies should be doing more to remove counterfeit goods or infringing activity from their platforms.

Looking at the importance of an online brand protection strategy, MarkMonitor asked respondents how not a strategy would impact on their organisation. The number one concern was bottom line, cited by 78 per cent, followed by competitive disadvantage, mentioned by 77 per cent. Other concerns included a negative impact on brand reputation, diminished customer trust, and demotivation of staff.

“Online brand protection remains a critical feature for all businesses. As the digital channels expand with new ways to advertise and market goods and services, the threat of infringement and abuse rises too,” the report said.

“Our research has highlighted that those with an online brand protection in place do have a good awareness of the landscape in which they operate, the channels that need to be monitored and the importance of such a plan. However, it was also revealed that respondents still face challenges in the monitoring and management of these programs — challenges that need to be overcome in order to face the future of threats.”