Cybersquatting and Paid Search: What Brands Need to Know

By PPC Hero Ally | @Hanapin | guestblogger

By Frederick Felman, CMO, MarkMonitor

According to The Search Engine Marketing Professional Organization (SEMPO), search advertising has grown 286% in the last five years and will increase from $14.6 billion to $16.6 billion in 2010.  The future for search engine advertising is bright. However, it’s the very vibrancy of search that leads to abuses and scams by counterfeiters, fraudsters and unscrupulous competitors. In fact, based on analysis of data from Direct Magazine, 14% of branded searches never arrive at the brand’s site.  While some of those clicks land on legitimate ecommerce sites reselling those branded goods, significant percentages are lured away from ‘clean well-lighted’ sites to disreputable destinations (read more in this pay-per-click advertising scams white paper). For luxury products, these statistics get much worse. A traffic audit for five luxury brands found that traffic to sites selling suspected counterfeit goods amounted to more than 45% of the search traffic generated by the official brand sites.

How does this happen?  Online scammers are every bit as savvy in online ‘best practices’ as legitimate interactive marketers.  They are smart and motivated and employ a wide array of online tactics to intercept traffic meant for legitimate brand and ecommerce sites.

The first tactic of choice is cybersquatting, the practice of registering a domain name which includes a trademark to which the scammer has no claim.  An unknowing potential customer may assume that this domain represents an official website of the brand and will mistakenly patronize this misleading website rather than the legitimate website for that brand. Cybersquatting can intercept significant traffic and, in the long term, dilute brand value when searchers are directed to sites with possibly counterfeit, poor quality or competitive goods.

Cybersquatting is often used in combination with other black-hat SEO tactics which scammers use to increase organic search rankings, often at the expense of legitimate brands.  In addition to cybersquatting, black-hat SEO practices can include placing a trademarked brand name in a web page title tag or headline, or building a large volume of links that use trademarked terms in a variety of ways.  For example, one site selling knockoff Louis Vuitton products created more than 13,000 inbound links, propelling the site to first place in searches for  the term ‘louis vuitton on sale’  and earning the knockoff site more than 3.3 million visits annually.

Analyzing these links further, we found that almost 25% of the links to this site resulted from internal website links with a brand term embedded in the link text. In addition, many external links to the site referenced a variation on the Louis Vuitton brand in anchor text. Still other links originated from a site where the relevant content was controlled by the knockoff company.  Black-hat SEO techniques are constantly evolving in an effort to stay ahead of the practices that search algorithms detect and discount.

Online scammers invest in paid search, too, just as legitimate marketers do. The most prevalent and obvious examples of paid search scams occur when a brand name is used in an illegitimate fashion in a paid search text ad or keyword buy.  The intention is to generate traffic at the expense of a legitimate brand and, as a result, paid search scams affect brands in two ways:  They intercept traffic that is searching for the legitimate brand and drive up the cost of a pay-per-click advertising campaign. Often, a branded term will be present in the ad copy itself and can lead consumers to counterfeit goods or to pages associating a legitimate brand with undesirable or offensive content.

As a side note, counterfeiters will also use common generic terms that a brand advertiser would purchase, too, driving up campaign costs and exposing consumers to knockoffs and sub-standard goods.  In a study that we conducted during the busy holiday shopping season last year, we examined search results for the popular term “designer handbags.”  A startling 32% of paid search ads that appeared on a search for this term led to sites that appeared to sell counterfeit handbags.

How and when can a brand take action? First of all, in the case of counterfeit or pirated goods, brands should always take action.  None of the ‘big three’ search engines allow pay-per-click ads that lead to sites offering counterfeit or pirated goods.  Each of those search engines has information on how to report these types of offenses posted within their advertising guidelines or ‘terms and conditions’ sections. It is important to remember, however, that the search engines do not police this type of activity and it is up to the legitimate brand to identify and report the offenders.

An advertiser can use a trademarked term in ad copy if the advertiser’s site either resells or provides information about the trademarked product, or if it sells or promotes component, replacement or compatible parts.  Advertisers are prohibited from using a trademark in ad copy if the advertiser’s site is deceptive.  A good example is that of a classic ‘bait and switch’ scenario in which a paid search ad promotes one type of branded product, but the corresponding landing page does not sell that branded product or sells only a competitive brand.

Online scammers are aggressive and savvy in promoting their wares online, but brand marketers can outwit them with a solid online brand protection strategy that seeks and destroys the scammers.  To paraphrase the old adage ‘you don’t need to be faster than the bear, just faster than the brand next to you.’

There are plenty of places on the web to help you familiarize yourself with the specifics of the pay-per-click scam threat including ecommerce associations, publications, blogs, and LinkedIn groups dedicated to the topic of brand protection.

MarkMonitor is a global provider of online brand protection solutions. The company offers a free white paper that can be accessed here about: Minimizing Paid Search Scams

Frederick Felman is the CMO at MarkMonitor®, a leader in enterprise brand protection, where he is responsible for promoting the company’s brand protection products.  He and his team created the Brandjacking Index®, an often cited measure of the trends in online abuse targeting the world’s largest brands.

© 2010 MarkMonitor Inc.  All rights reserved.  MarkMonitor®  and Brandjacking Index® are registered trademark s of MarkMonitor Inc.   All other trademarks included herein are the property of their respective owners.