Report: How Scammers Generate Significant Traffic Promoting Suspected Counterfeit Sports Apparel Online

PRESS RELEASE

LONDON, February 2, 2011 – MarkMonitor', the global leader in enterprise brand protection, today released a special edition of the Brandjacking Index', focused on sports apparel sales online. The report reveals how suspected counterfeiters attract at least 56 million annual visits to e-commerce sites and sell almost 1.2 million suspicious jerseys via e-commerce and business-to-business (B2B) exchange sites annually.

To produce the report, MarkMonitor analysed five major sports brands, including US leagues and international competitions, to determine who was using these brands in online trading and promotion of sports apparel with questionable provenance. The analysis was conducted during the fourth quarter of 2010 and included online distribution and promotional channels, including business-to-business (B2B) sellers of bulk goods and business-to-consumer (B2C) sites, including e-commerce sites, along with almost 300 branded keyword combinations that triggered paid search ads across major search engines.

“Online fraudsters see a tremendous opportunity in the passion and loyalty of millions of sports fans, taking advantage of both brands and fans online,” said Frederick Felman, CMO of MarkMonitor. “These scammers compete with legitimate online advertisers and e-commerce sites, driving up costs for the brands and confusing fans.”

The study identified more than 1,300 e-commerce Web sites selling questionable jerseys featuring one or more of the five brands in the study. The sites attracted more than 56 million annual visits and sell an estimated 800,000 units annually. The vast majority of these sites were linked to Chinese domain name registrants or registrars.

The study also discovered more than 4,000 individual, unauthorised suppliers that appear to be offering phony merchandise on twelve B2B exchange sites. This supply chain consists of suppliers who are based predominantly in Asia and are estimated to sell 300,000 jerseys annually.

Along with their distribution prowess, these fraudsters display a high level of sophistication in promoting their sites and attracting traffic. During the study period, we examined almost 480,000 paid search ads, triggered by more than 280 keyword combinations and found almost 28% of these ads promoted suspicious goods, driving an estimated 11 million annual visits.

In effect, suspected counterfeiters are competing with legitimate advertisers for advertising inventory, driving up prices and even outbidding legitimate advertisers for premium placement. As a result, legitimate advertisers have to pay more for their own trademarked search keywords and compete with counterfeiters for traffic seeking their brands. The investments that brands make in their trademarks are especially effective in driving traffic, since 20% of all searches are for trademarked terms, according to a recent comScore and Yahoo Search Marketing (Overture) study.

About MarkMonitor

MarkMonitor, the global leader in enterprise brand protection, offers comprehensive solutions and services that safeguard brands, reputation and revenue from online risks. With end-to-end solutions that address the growing threats of online fraud, brand abuse and unauthorised channels, MarkMonitor enables a secure Internet for businesses and their customers. The company’s exclusive access to data combined with its patented real-time prevention, detection and response capabilities provide wide-ranging protection to the ever-changing online risks faced by brands today. For more information, visit www.markmonitor.com