Information Technology

Combatting online counterfeiting

By Charlie Abrahams, senior vice president, MarkMonitor, a brand of Clarivate Analytics
Information Technology
Published: 9 June 2017

In a highly competitive market brands are facing a growing challenge from counterfeiters, with fake goods affecting their bottom line, reputation and customer trust.

According to the Organisation for Economic Co-operation and Development (OECD), the global trade in counterfeits is expanding rapidly. In 2016, it accounted for 2.5% of world trade or $461 billion[1].

From electronics and technology, to luxury fashion goods and low margin consumer goods, online shoppers are being exposed to counterfeit goods in all areas. Therefore, it is up brands to ensure they protect both themselves and their customers from the risks posed. But where do they start?

MarkMonitor, the expert in online brand protection, has developed the following best practices for brands to help tackle this issue.

1. Attain global visibility
Before a brand can understand the scope of the threat posed by online counterfeit sales, it must expose and quantify the problem. Counterfeiters operate over a wide array of online channels; all of these, including online marketplaces, e-commerce sites, message boards and the rest, must be monitored and analysed. Counterfeiters depend on technology to drive sales volumes so approach the monitoring challenge with the same tools and leverage technology to form a complete and accurate picture of the challenge that your brand faces.

2. Monitor points of promotion
While it’s obviously important to identify and shut down distribution channels, it’s almost certain that counterfeiters will regularly seek new sales venues. So it’s just as critical to monitor the online promotional channels used by these criminals. Counterfeiters use the same effective promotion techniques employed by legitimate marketers while leveraging the powerful, highly recognisable brands built by experts. Using paid search advertising, links within social media, black hat SEO tactics, cybersquatting and spam, they successfully steer traffic to their illicit offerings, and diminish the marketing ROI of legitimate brands. Monitoring for these promotional efforts is critical – and enables our next best practice.

3. Take proactive action
Counterfeiters obviously encounter more success when left to operate unchallenged; they’re also known to shift their energies to more passive targets when brands visibly fight back. Once a brand understands where the greatest threats lie, aggressive action is the best strategy. Brands should:

  • Watch for cybersquatters. Brands should actively monitor the Internet for unauthorised use of their branded terms in domain names. This will aid in rapid detection of e-commerce sites selling counterfeit or unauthorised goods – and frequently also uncovers other abuses such as false association with offensive content like pornography.
  • Become a difficult target. Brands that visibly, vigorously fight to remove counterfeit goods from online venues often see a dramatic drop in infringement against their brands.
  • Use all your weapons. Most online channels provide mechanisms for dealing with counterfeit sales situations. Online marketplaces, for example, typically have policies and procedures enabling brand owners to report listings that infringe their brand.
  • Get help from friends. Industry relationships can be powerful weapons in the fight against online counterfeiting. When choosing a brand protection solution provider, look for one with established ties with thousands of ISPs and Registrars worldwide.

4. Fight online counterfeit sales holistically
Online counterfeit sales are easier to address when the entire enterprise participates. That means brand owners should set up a cross-functional task force to address the issue in a coordinated, holistic manner. Stakeholders – and, therefore, recommended participants – will vary by industry and enterprise, but can include legal, marketing, risk management, loss prevention, channel sales management, manufacturing, supply chain management and other functional units. Because fighting online counterfeiting requires attacking both promotional and distribution channels, this group needs to address more facets of the problem than seen in the physical world.

5. Let online intelligence inform offline defence measures
Because offline measures – physical investigations, factory raids and other activities – can be costly and time-consuming, it’s critical to know where they should be focused. Online intelligence can help identify the most egregious infringers, so that offline defensive efforts can be focused where they’ll be most effective.

6. Act swiftly – and globally
Perhaps even more than it affects legitimate business, the proliferation of international trade offers tremendous benefits to online counterfeiters. While a domestic seller or manufacturer may seem like an easy first target, brands have learned that it’s more effective to launch global anti-counterfeiting initiatives – and to get them underway expeditiously. Prepare by ensuring your trademarks are registered internationally – especially in China, which observes a “first-to-file” policy that grants registration to whoever files first, even if it’s not the true brand owner. A global effort doesn’t preclude addressing markets that target a specific country exclusively. In some cases, this will require competent language translation resources for monitoring, detection and enforcement. Most companies rely on third-party brand protection solution providers for this kind of expertise.

7. Educate your customers
Your customers can be an important ally in minimising sales of counterfeit goods with all its associated costs. Educate your customers about the risks of buying from unauthorised sources, and recruit them to join in the effort by reporting suspicious goods and sellers. The Authentics Foundation and its consumer site, dontbuyfakes.com, have useful resources for consumer education. Also, many brands provide form or email-based mechanisms for reporting suspected infringement. When offering such tools, be sure to reinforce the benefits of buying authentic goods from authorised sellers.

Conclusion
Combatting counterfeiters should be a top priority for brands in order to guard their reputation and revenue – as well as protecting their customers. As the availability of fake goods grows steadily, it becomes critical that brands take the threat seriously and develop, implement and maintain a comprehensive brand protection strategy that can help them achieve this goal.