Target and Toys R Us posted overall sales declines during the holidays.
Retailers and consumer goods manufacturers are increasingly the targets of criminals who create sites with addresses that include trademarked names or seek to exploit well-known brands in other ways.
Online brand abuse trended upwards in 2007, although there were pockets of progress, reports MarkMonitor, a company that protects brands from online abuse.
The company’s Brandjacking Index, developed by tracking millions of Internet actions and e-mails, shows that the most common way criminals try to take advantage of well-known brands is by “cybersquatting,” creating web sites whose domain names include trademarked names. As an example, MarkMonitor points to guccifendi.com, a site selling counterfeit goods whose URL combined the well-known fashion names Gucci and Fendi.
There were 382,000 instances of cybersquatting noted in the fourth quarter of 2007, a 33% increase from the first quarter of the year.
On the positive side, the report pointed to a decline in domain kiting, a practice in which someone registers a domain name and holds it for most of the five-day grace period allowed by domain registrars, drops it before having to pay for it and then re-registers it. All the while, the kiter is using the site, often to host ads that produce revenue for each click. Domain kiting was down 14% over the course of 2007, which MarkMonitor attributes to effective lawsuits and other actions taken during the year.
In the fourth quarter of 2007, there were 412 organizations targeted by phishing attacks, in which e-mails are sent to consumers purporting to be from legitimate senders, with the aim of extracting personal or financial information. That was a 37% increase in from Q4 2006, MarkMonitor says.
Auction web sites were the targets of 44% of the phishing e-mails observed in the fourth quarter, up from 36% in the first quarter. Retail and service companies were the targets of 5% of the phishing attacks in the fourth quarter, up from 1% in the first quarter.
Overall, the report noted a trend toward a broader array of companies being targeted by brand hijackers. While attacks on high-tech brands dropped 10% over the year, MarkMonitor reports attacks on automotive brands grew by 83%, on food and beverage by 67%, consumer packaged goods 62% and apparel 49%.
MarkMonitor tracks brand abuses quarterly. This was the first report to include a full year of data, the company says.