Trademark & Brand Abuse Fears Pervade Holiday Season for Merchants

The 2012 shopping season is expected to be of an epic nature. Where there are profits to be made however, there will likely always be misuse in the form of trademark and brand infringement (or outright abuse) for Internet retailers to monitor.

Fortunately, there are proven and reliable ways to mitigate the problem. Companies such as BrandVerity provide technology to larger brands to help them combat specific challenges such as URL hijacking via paid search ads and other types of online brand infringement/brand abuse. The company's CEO David Naffziger believes URL hijacking will be on the rise during the upcoming ecommerce holiday selling season and the impact will negatively hit sales, marketing costs and brand.

Website Magazine Editor-in-Chief asked a few questions of Naffziger about brand and trademark abuse on today's web, how his company BrandVerity actually works, and more.

How severe is online brand and trademark abuse today and how has it changed over the past five years?

The search engines have altered their policies significantly over the last five years (see attached slide for the details on the evolution if you are interested). The liberalized rules have allowed more organizations to purchase ads on trademarked terms and more organizations to use those trademarks in their ads. This has created the opportunity for more trademark abuse by affiliates, partners and competitors alike.

We've also seen an increase in the sophistication of dedicated abusers. In particular, they have gotten better at hiding their ads from their targets, as well as hiding information that would allow a company to take action against them (for example their affiliate ID).

The vast majority of brands today contend with advertisements that run on keywords incorporating their branded terms. Companies think about 'abuse' differently but brands will generally always find ads that they can take action against.

On a high level, explain how BrandVerity and its service work.

We have a geographically distributed network of monitoring agents that conduct searches on our clients behalf, retrieve the ads, follow the ads and crawl the destination websites. All of that collected data is returned to our system and analyzed against the specific rules our clients select.

If a client is monitoring for affiliates, we invest significantly in finding the ID of the affiliate that purchased the ad so that our client can contact the affiliate to remove the ad. We detect IDs from over 150 affiliate networks and use several crawling technologies to identify IDs that are intentionally hidden. We also employ a team of advertising abuse analysts that investigate ads where we believe an affiliate has hidden their ID from our monitoring agents.

We then provide clients a suite of tools to take action. They can request removal from the search engines, contact affiliates directly or tell our system to ignore certain ads in the future.

Who is typically interested in th types of services offered by BrandVerity and who tends to benefit the most from using them?

Our core customer is an online retailer that operates an affiliate program. While our customer base extends to niche ecommerce websites, companies that receive a large number of searches for their brand tend to benefit most from our service. This includes companies with well-known consumer brands as well as companies that spend heavily on advertising such as direct response companies.

Brand terms are targeted in particular because CPCs tend to be low and conversion rates tend to be very high, and brands that are searched heavily represent a larger opportunity.

Which industry verticals tend to have the most abuse today and why?

The type of abuse differs by industry verticals. Nearly all verticals attract arbitrage ads - search ads where the principal purpose is to get the user to click on another ad on the landing page.

Retailers tend to attract ads from affiliates and comparison shopping engines. Affiliates might promote their own site, or seek to replace the retailer's own ad with an ad containing an affiliate link (URL Hijacking).

Financial companies tend to attract advertisers with traffic diversion schemes. We commonly see payday lenders targeting brands associated with consumer finance (banks, credit cards, etc.).

Besides automating the monitoring, what policies should PPC advertisers and those operating affiliate programs abide by when recruiting or managing affiliates?

There are several things an advertiser should consider and clearly state in their affiliate policies:
- Should affiliates be allowed to promote the advertiser in paid search?
- Should affiliates be allowed to run PPC ads on brand keywords (such as 'merchant' or '')?
- Should affiliates be allowed to run ads on brand + term keywords (such as 'merchant coupons')?
- Should affiliates be allowed to run PPC ads using the merchant's display URL (and on what keywords)?

Many advertisers use the word 'bid' in their policies. For example, they might say 'affiliate may not bid on any keyword containing brand terms'. However, the broad match technology employed by the search engines create situations where an affiliate might not have 'bid' on a term, but the ad still appears on that term. We recommend something along the lines of 'affiliate may not run ads on any search containing brand terms. Affiliate is required to include brand terms as negative keywords'.

BrandVerity also provides the 'Affiliate Watchlist', a list of some of the most abusive affiliates we have seen across our clients. Advertisers can check affiliate IDs that are applying for their programs against this list before allowing them into the program.