The dark side of paid search: scams, fraud and trademark abuse

Trademark infringement. Counterfeit merchandise. Domain squatting. Affiliate abuse. The old bait-and-switch. There are myriad ways of commiting fraud, but overall, some 600 million paid search clicks are stolen in the US every month.

At least, according to a recent study by MarkMonitor which found, based on an analysis of data from various sources including comScore, Marketing Sherpa, Hitwise and others, that one in seven brand-driven paid search clicks go somewhere they ought not to according to trademark law, affiliate agreements or the DMCA.

Things get even worse for luxury brands. CMO Frederick Felman says analysis of web traffic from five fashion brand indicates 47 percent of traffic is intercepted from their e-commerce sites, accounting for some 120 million visits annually. Paid search isn't the only contributing factor in this case; so is cybersquatting and black hat SEO techniques. Felman, together with his colleague communications VP Te Smith, are amassing a rogue's gallery of domains such as guccioutlet.com, louisvuitton4sale.com, gucci-italy.com, and burberryoutletstore.com that infringe on trademark as well as cybersquat, and search ads that lead to sites featuring competitors' merchandise, a violation of search engine T&Cs.

Maybe you wouldn't be suckered in, but the numbers are nonetheless surprising. guccioutlet.com gets over 10,000 visitors per year, while the sham Vuitton site's traffic figures exceed 3 million.

What to do to prevent abuse and protect your brand? It depends, of course, on the type of abuse. Clear agreements with affiliates are, of course, de rigeur.  So is contacting the offending advertiser. All the major search engines offer online forms for reporting trademark abuse. Google also has links to report counterfeit goods and copyright infringement/pirated goods.

Knowing the basics of fair use is a critical first step before requesting enforcement. Advertisers can use your trademark if their site resells the goods; is informative on teh trademarked goods or services; or if it promotes component or replaceable parts. But advertisers cannot use a trademark if the site is deceptive, promotes a competitor, or sells or promotes pirated or counterfeit goods.