Protecting Your Brand From Online Fraud, Infringement & Other Emerging Threats

A few weeks ago, I attended the “Protecting Your Brand From Online Fraud, Infringement & Other Emerging Threats” session at SMX East and was pleased to learn a few new techniques and tidbits from some experts at their individual online reputation crafts. Here’s my recap of that session.

The session was moderated by Matt Van Wagner, president of Find Me Faster, and it starred Tad Miller, VP of Accounts at Marketing Mojo (@jstatad), Michael Steck, general counsel at Avalaunch Media (@stecklaw) and Eric Berman, counsel at Venable LLP (@allaboutadvlaw).

Should we be surprised that two of the three presenters were attorneys at this search marketing conference? Really, we shouldn’t be; the more you know about online reputation issues, the more you recognize that managing brand presence online involves a tight hybrid between marketing best practices and application of good legal precedent.

First up was Miller, who focused upon forms of “Conquesting” — that is, methods by which marketers attempt to advertise one’s products or services alongside a competitor’s content or ads. He covered two varieties of Conquesting — “Editorial Conquesting” and “Search Ad Conquesting.” (My nota bene: Are marketers who do this called “Conquistadors?” I hope so!)

Miller defined Editorial Conquest to be when a competitor targets specific keyword phrases in search, such as reviews of products or news articles, around major announcements. He related that he considers Samsung to be the best at doing Editorial Conquest.

He provided the example of a review of the iPhone 6 that appeared around the time it first debuted. The review had eight different Samsung ads all over it!

Conquesting Example: Samsung Advertising around Apple iPhone 6S. (Click to view full example image.)

Miller defined Search Ad Conquesting as advertising on someone else’s trademarks. Google and other networks allow you to bid on competitors’ trademark brand names and to display your ads contextually with the competitor’s stuff.

Why Search Ad Conquesting Is A Bad Value Proposition

However, he says that it’s typically a pretty bad cost/value proposition — it’s legal to target competitors’ trademark keywords, but typically too costly to be profitable for the following reasons:

• You can’t use competitor trademarked words in your ad’s copy. So your ads won’t have the bold blue ad text on the trademarked word, and you lose out on the CTR lift from that attention-getting feature, compared to the brand owner’s ads.
• Your ads will usually get only a Quality Score of 1 or 2 out of 10.
• The low Quality Score typically translates to Cost-Per-Clicks (CPCs) that are 200 percent higher than the normal CPC — so doing this type of ad is very costly. With a low Quality Score, you’re paying a premium price — even a Score of 7 is deemed low.
• If you have one or two of these types of ads, you could pay up to 600 percent more than a person with a high Quality Score. You’re paying higher than the trademark owner.
• You can expect a low share of impressions — it can be a struggle to get enough impressions with such a low Quality Score.
• The Knowledge Graph box can make it even harder, since right sidebar ads are pushed down further out of visibility.
• Conquesting Best Case Scenario: Stalemate. Sometimes the best you can hope for is that nobody wins the customer.
• Conquesting delivers the lowest conversion rates and ROI.

So, why would anyone do Search Ad Conquesting? Miller says the Conquestors’ mentality is such that they won’t spend a dime or a minute of time to improve their own companies’ advertising, but they will spend a fortune to try to destroy their competition. Oh, and they’re jerks!

Ad budget is usually never an issue with Search Ad Conquestors (“Conquistadors?”). They have money to mess with the competition.

Miller showed a graph illustrating a typical conquesting ad campaign over time, and he said that both then and now, the tactic is hurting the Conquestor more than the trademark owner in terms of generating sales from advertising.

But the price floor on brand keywords is way up year over year, and trademark owners are now suffering more than previously. So Conquestors are impacting trademark owners’ costs.

As another example, Miller pointed out how McAfee is targeting ads to searches for “Norton Antivirus.” Now, in 2015, Norton has become more defensive, and they’re even breaking Google’s rules by targeting two different ads on different domain names to their own name searches.

He also pointed out examples where Elephant Insurance was targeting searches for “State Farm Insurance,” and Ford was targeting an ad to searches for “2016 Mazda cx 9,” and even “Mazda cx 9 review.”

Protect Your Trademarks

Miller then ended his presentation by providing the following recommendations for protecting your trademarks:

• File a trademark list for your company’s Intellectual Property (“IP”) with the search engines, and keep your “White List” of acceptable users (those authorized to use your marks) up to date.
• Notice that you’re vulnerable off-brand — in other words, be aware that some word variations that are open and fair-use may be fuzzy matches in search for your brand name, allowing ads to appear. The example he provides is Oracle advertising a paper on “How a Sales Force Sells,” which then appears when people search for “Salesforce.” Sneaky!
• Read the Art of War by Sun Tzu, and think strategically of how you can be attacked/defended.
• Everyone is vulnerable in the short term, such as during your brand’s special events and announcements. Conquesting can ruin your very special (very public) days.
• Close the gap on ALL the channels — for instance, YouTube.
• Twitter is the next conquesting frontier: You have to buy hashtags and ads. Buy all the spots on a reveal day.
• Think like an attacker. You have weak links. Advertise on YouTube, social sites, contextual ads, display. Don’t let anyone use your display URL if they’re an affiliate, or they’ll prevent your ads from showing.
• Your brand is your most valuable resource. You’ve got to bid on it. Bid heavy with big budget on your special event days.
• Max out traffic on your brand.
• Don’t allow affiliate domain URL hijacking — where affiliates may show your domain name in their ads, but they’re directly linking the ads to the destination URL with their affiliate referral code so they get commission checks from you. Since only one use of that Display URL may appear via ad auctions, this can keep your own ads from appearing. Affiliates don’t always follow brand guidelines. It can create “buggy” revenue attribution, giving you a skewed picture of how much on-brand traffic you are (or could) receive versus from affiliate/unbranded channels. Most affiliate programs don’t allow direct linking.
• Talk to your IP attorney if you’ve got these problems.
• Get more ad budget to keep people from conquesting.

I found Miller’s presentation and recommendations highly illuminating. People often don’t realize how much Conquesting is being done on their trademarked terms and term combinations via search ads, because they imagine the PPC advertising space as being relatively well policed by search engines and ad networks.

It’s important to regularly conduct searches and see what’s appearing in context with your brand name searches to defend yourself if necessary.

Next up was Steck, and his presentation was a “10-Step Legal Audit to Protect Your Brand From Fraud, Infringement, and Data Breach.” He gave a very simplified overview of IP issues and best practices for this marketing audience.

Vulnerable Data

Classic intellectual property is generally “creations of the mind.” Examples of this are inventions, literary and artistic works, designs and symbols, and names and images in commerce.

Newer intellectual property is personal data. Steck provided a quote from Meglena Kuneva, European Consumer commissioner:

[blockquote] Personal data is the new oil of the internet and the new currency of the digital world.[/blockquote]

Some vulnerability examples Steck provided were the Ashley Madison data breach and other breaches of personal data such as at Target, where 40 million credit and debit card users were affected, and Home Depot, where 56 million people were affected.

Existential threats include fraud, IP protections, copyright protections, infringement. He cited a video removed for using the “Eye of the Tiger” song without permission.

Another example was the Obama presidential campaign poster “Hope” which was alleged to be infringing upon the photograph the illustration was based on, which had been used without the photographer’s permission.

He cited some statistics: The year 2014 saw a 48-percent increase in cyber attacks compared with 2013. So the frequency and risks are growing.

The average loss in a cyberattack against a US company is $2.9 million. McKinsey & Co. estimates that cyberattacks will slow the pace of technology and business innovation over the next few years and cost the economy $3 trillion annually. Juniper research estimates the average cost of a data breach will exceed $150 million by 2050.

Steck then provided his logical 10-step self-audit for tightening up the IP for a company. His list contains steps covering external legal protections, internal legal protections and breach procedures.

10-Step IP Self-Audit

1. Registration. Register IP with the US Patent & Trademark Office, the US Copyright Office; and available for free to all without registration are the TM (trademark) and SM (sales mark) denotations.
2. Core Online Legal Docs. Your sites should have: a Privacy Policy (should use the word “Notice”); Terms of Use; COPPA; and should identify necessary notices according to your industry.
3. Enforcement: Direct & Indirect Enforcement. Direct is using a Trademark Complaint Form/Authorization Form/DMCA/Cease and Desist Letters/litigation; Indirect is through: PPC — advertising on your own IP (like what Miller presented earlier) on your own keywords. And protection through use — use it or lose it; for SEO and SEM. Trademarks need to remain “in use” as a way of protecting them.
4. Review Your Contracts. Review contracts for independent contractors, marketing agencies and limited use resellers. Contractually restrict what they can do with your company’s intellectual property.
5. Review Operation Controls. Privacy Policy and Employment Policies.
6. Risk Analysis. Who needs to know key data? Perform a data analysis.
7. Cryptography. Your valuable data should be encrypted. Also, review who has information system access. Restrict data access to only those who need it.
8. Breach Detection Analysis. Statistics show that most companies have had a persistent link in their network for more than 400 days. Review policies on how the company deals with a data breach.
9. Response. What is the outcome/fallout? When it occurs, offer a sincere apology.
10. Litigation. In litigation, you’re required to turn over requested data. Don’t attempt to destroy data. We prefer “hiding” the sensitive data in the bulk of disclosed data. We’d rather release it properly than delete it.

“The Best Defense Is A Good Offense”

Next up was Eric Berman, who provided a presentation titled, “I Fought The Law: A Primer For Online Brand Marketers.”

He first touched on search marketing issues involving one’s competitors. He said he was only providing information at a high-level overview — sort of “trademarks at 10,000 feet.” He said that the best defense is a good offense.

Berman said it’s been established that advertisers may use competitors’ trademarks in ads, but if not done carefully, they may be sued for trademark infringement. To find that there’s been infringement, it requires that there be a likelihood of confusion.

It’s also possible to claim that there was an “initial interest confusion.” That’s when there’s confusion before the time of purchase that creates interest in a competing product — for instance, when a consumer first uses a keyword to search for a product or brand, and he or she gets diverted to the competitor — although courts are split on this particular theory.

Some common defenses to a claim of trademark infringement are: a lack of evidence of confusion; it was “Nominative Use” — that is, the competitor used the trademark to identify, with no suggestion of sponsorship or endorsement; and the defensive claim of “Unclean Hands” — where the plaintiff has been doing the exact same practice, such as purchasing competitors’ keywords.

Berman provided an example, citing the case, “Earthcam, Inc. v. OxBlue Corp” (N.D. Ga. 2014), where Webcam system marketer EarthCam brought a suit claiming corporate espionage against OxBlue. EarthCam had also bought advertising keyword “OxBlue” from search engines, so OxBlue counterclaimed for trademark infringement.

OxBlue lost the counterclaim on summary judgment, because it failed to provide evidence of a likelihood of confusion. The court also noted that OxBlue had earlier bought the “EarthCam” keyword with search engines, so there was the potential of “Unclean Hands.”

He provided another example, citing “International Payment Services v. CardPaymentOptions.com” (C.D. Cal. 2015), where credit card processor IPS owned the trademark “ElitePay Global” as its business name. CardPaymentOptions.com is a review website that has negative reviews of ElitePay Global, and CardPaymentOptions.com also purchased “ElitePay Global” keywords to direct searches to its negative reviews, and it put the trademark on the review page.

The court ruled that IPS lost the trademark claim in a summary judgment, and the primary ruling was that it was an allowed, Nominative Use — a “referential use” to review and criticize IPS. The “referential use” extended to include using the trademark as a keyword trigger to display an ad.

In another example, Berman cited the case, “Alzheimer’s Foundation of America v. Alzheimer’s Disease and Related Disorders Association” (S.D.N.Y. 2015). Both organizations are nonprofits dedicated to fighting Alzheimer’s.

The Alzheimer’s Foundation of America bought keyword ads targeted to “Alzheimer’s Association” and “Memory Walk,” and the Alzheimer’s Disease and Related Disorders Association sued them for trademark infringement and requested a preliminary injunction. The Alzheimer’s Disease and Related Disorders Association lost the preliminary injunction request, and the court actually said that any likelihood of confusion factors favored them.

This is another case where lack of evidence of actual confusion killed the claim — it was unclear whether any searchers actually mistook the Alzheimer’s Foundation of America for the Alzheimer’s Disease and Related Disorders Association.

There was also some implication that the court was irritated that these two nonprofits were expending resources suing each other when they have similar/common causes, and the judge criticized both parties for wasting time and money that could have been spent on their goals.

Berman’s next example was “Multi Time Machine v. Amazon.com” (9th Cir. 2015). Multi Time Machine (aka “MTM”) makes popular watches that Amazon does not sell, including “MTM Special Ops” watches. When users search in Amazon for “MTM Special Ops,” the page displays similar competing products as “results,” so MTM sued them.

The lower court granted summary judgment in favor of Amazon, finding no infringement had occurred. The Ninth Circuit court has reversed that decision based on Initial Interest Confusion, so the case gets to go to trial. Amazon failed to say in the search results that it did not stock any MTM products, and the results page included multiple uses of the term “MTM Special Ops.”

(I note that if you search in Google for “MTM Special Ops,” there is also an Amazon.com page that’s matching that ranks in the search results. Amazon is particularly adept at SEO, so this is unsurprising — but it makes the contentious MTM Special Ops page at Amazon.com far more visible, as well. I think that the decision in this case could have far-reaching implications, since there are many instances when product “results” pages will appear in search results, even though they don’t have the requested product available — such as when the product is dropped from stock in an ecatalog, or for “related search” results from ecatalog sites, as in Amazon’s case.)

Google used to have a dozen of these cases going on, Berman said. However, you don’t really sue the search engines any more on these — search engines will tell you to go deal with your competitors. No one sues search engines any more on this stuff, because you’re going to lose.

Regulations And Disclosures

Berman then touched on how there are also search marketing issues involving government regulators, such as the Federal Trade Commission. Brand marketing with user-generated content on social media may trigger consumer actions (for example, IP rights) and regulatory scrutiny by the FTC.

Consumer protection organizations will look at brands’ privacy policies. Obtaining consent is a hot-button issue that will be scrutinized, especially for children under 13, which will invoke the Children’s Online Privacy Protection Act of 1998 (“COPPA”).

The regulatory bodies will look at how you share consumers’ information with affiliates and business partners, how you use customer testimonials and how you adhere to your privacy policies.

Native advertising (aka sponsored content) existed before search marketing. It’s a concern because it can create consumer confusion, and it blurs the line between editorial content and commercial speech/advertising.

It impacts the message conveyed to consumers. It’s a problem when consumers can’t tell the difference between sponsored content and editorial content.

Eric Berman showed a “SHAPE Water Boosters” ad that was formatted and titled in a way that too closely resembles the regular editorial articles that appear in the same magazine.

One can reduce the risk of having a problem with the FTC through disclosure. Berman emphasized: “Disclosure, disclosure, disclosure!”

Distinguish sponsored search listings from natural listings. Also, follow your industry’s self-regulation guidelines and best practices.

Don’t blur the lines — the FTC takes the position that “magic words” don’t save you. (Nota bene: Magic words could be things like saying content is “brought to you by” or “made possible by,” which doesn’t fully convey that the content might be completely a paid-for message.)

If the look and feel of ads is just like the editorial content, the FTC doesn’t like it. For example, Berman cited the advertising that quotes Dr. Oz talking about raspberry ketones for losing weight — some of the quotes were taken out of context and have been criticized for being deceptive to consumers.

Summary

Overall, the session on “Protecting Your Brand from Online Fraud, Infringement and Other Emerging Threats” was interesting, informative and useful. I think more marketers need to become familiar with the issues and facts around intellectual property law and associated best practices, and this session was really great for becoming a little more knowledgeable.

Interested in reading more on online reputation management? Check out my other articles on the topic:

• For Ashley Madison Users, What’s Next? Reputation Apocalypse, Phase 2
• Are Search Engines Responsible For Reputation? Yes, Virginia, They Are. Big Time!
• 9 Key Points for Cleaning Up Your Online Reputation Nightmare Via SEO
• Trademark Policing: Ninja Techniques Of Online Reputation Management
• 10 Ideas: How To Fix A Damning Business Review
• How I Came To Work For A Killer: An Online Reputation Fable
• Why Google, Bing, Facebook, Twitter & Others Should Collaborate: A Proposition For An Online Reputation Issues Clearinghouse