Understanding the true extent of brand counterfeiting

Understanding the true extent of brand counterfeiting

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By Chrissie Jamieson, VP marketing, MarkMonitor

We all know counterfeiting is just one of the many problems brands face when it comes to protecting themselves online. But it is typically difficult to accurately gauge the true impact it has on both businesses and wider industries.

Recent research from MarkMonitor found that almost half (47 percent) of all brands are losing money through counterfeiting, with one in three saying the loss in sales equates to more than 10 percent.

It also found that four in 10 businesses (41 percent) have experienced an increase in the occurrence of counterfeiting and brand infringement. There are various reasons for this, ranging from advances in social media to artificial intelligence and the dark web.

No end in sight

The amount of fake goods entering the supply chain is staggering. In 2017, for example, the number of counterfeits seized in the U.S. grew by almost 10 percent. This has led to plummeting consumer confidence levels, which in turn can impact a brand's bottom line.
Reputation is everything today. Whether it's a clothing brand, an IT business or a bar, they all live or die by the ratings they receive online.

The internet has become a word of mouth referral system for a whole generation of consumers. Because of this, any negativity directed at a brand can spread very quickly.

A change is required

Brand protection has never been more important than it is today. Plus, due to the global nature of business, an increased consumer appetite for online shopping and an expanding marketplace — driven by the proliferation of social media channels — it is only going to get harder. That's why all organizations must adapt their approach accordingly today if they are to reap tomorrow's rewards.

Today, brand protection is not confined to just the business. Rather, an overriding objective is for the organizations to protect its customers, safeguarding their trust and loyalty.

Successful protection requires a multi-disciplinary approach that starts from within. It is therefore imperative to gain buy-in from the very top of the organization. However, our research reveals that only 19 percent of respondents currently use a unified approach when implementing and monitoring a brand protection initiative. Looking at those respondents with no plan in place, the number one barrier is cost (65 percent), followed by a lack of time and resources (64 percent).

Caution over complacency

It's historically been difficult to quantify damage through counterfeiting due to the many forms this damage can assume. Respondents to MarkMonitor's research said they had been impacted by lost traffic due to cybersquatting (46 percent), an increased cost of paid search adverts (49 percent), damage to a brand's reputation (50 percent) and counterfeit-sponsored adverts on social media (45 percent).

Despite this, brands are far too often complacent in their defense strategies. Only 56 percent said they have previously taken legal action over counterfeiting — with 23 percent saying the action resulted in a successful take down and 24 percent saying they received financial compensation.


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. It's a catch-22. The online space has presented brands with amazing opportunities, but those same opportunities are also being exploited by cyber criminals and fraudsters.

The result? Damaged consumer trust, lost revenue and a tarnished reputation.

The good news is that those brands that have had the foresight to implement online brand protection will gain valuable awareness of the landscape in which they operate, the channels that need to be monitored and the importance of such a plan. However, they will still face challenges in the monitoring and management of these programs — challenges that need to be overcome to face future threats. These include the ability to quantify the value lost to infringements and the ability to prioritize them, a lack of knowledgeable staff and a lack of resources.

Tackling the problem effectively

When considering how to deal with the counterfeiting problem, many will automatically assume that it can be dealt with using the skills and knowledge of those in-house. Unfortunately, however, this is rarely the case.

Instead, brands need to work closely with a trusted third-party partner — a company that has the level of expertise required to deliver the comprehensive protection that businesses need nowadays. Not only this, but having a partner in charge means the customer can remain at the heart of the brand protection program itself.

This still does not address the cost issue that many brands face when trying to implement a brand protection program. But with the increase in counterfeiting and the associated loss of revenue, it is a case of having to speculate to accumulate. Making the investment almost always leads to swift return on investment.


Counterfeiting has long been an issue for brands, but today it's one that requires more effort than ever before to overcome. The activity is taking place not on a single platform, but across a plethora of channels and touch points. This level of counterfeiting can therefore only be solved through the use of advanced technology and close collaboration with an expert third-party partner.


Topics: Customer Experience, Marketing

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