Brand Highjackers: High Cost to Brand Owners


Companies of the 250 most visited U.S. Websites  are losing about $327 million a year, according to an AdAge.com study.

 

The culprit – typosquatters.

 

What is a typosquatter? Typosquatting is a form of cybersquatting, a method of registering domain names with a trademark with the intention of exploiting it, at the cost of harming businesses and consumers.

 

Businesses lose brand equity, consumer trust, and spend outrageous amounts of money on unnecessary click fees, while consumers are exposed to misinformation, annoying pop ups, malware and viruses.

 

Typosquatters are individuals who look to benefit financially from the traffic internet users generate when they make spelling or keystroke errors while typing in the domain name of the brand they’re looking for in the address bar of a browser.

 

Both Google.com and Youtube, probably the most recognizable websites on the Internet, have been victimized by typosquatting with goole.co and yuube.com. And airfrance.com has been typosquatted by arifrance.com, leading internet users to a discount travel website.

 

AdAge arrived at the $327 million figure by calculating the cost of unintended advertising, lost sales and lost impressions.

 

Adage.com selected the top 250 most visited U.S. websites with at least six characters in the domain name. Domain names with fewer than six characters were left out because typos were more likely to be the name of an actual brand. Adage.com then analyzed the registered typographical variations of those 250 brand domains and found approximately 28,000 registered typo domain names not owned by the brand.

 

Of those 28,000 typo domains, 84 percent directed internet users to pay-per-click sites, according to AdAge.com. These sites pose a risk to the owners brand equity because the sites also contain links to the brand’s competitors, leading to a diversion – a lost sale or impression for the brand owner.

 

According to AdAge.com, a Fairwind’s study estimates that 7 percent of Internet users who land on PPC sites will click on competitor’s link, which amounts to a $31 million loss in revenue a year for the 250 domain names.

 

Typosquatted PPC sites cost brand owners a significant amount of money in unintended advertising – about $184 million a year, according to the Fairwind study. Conversely, it cost brand owners money every time they lose an impression. Losing impressions harms the brand reputation because consumers have a negative experience. Brand owners lose about $5.8 million a year in lost impressions, according to the Fairwind study.

 

Brand owners do have a course of action. They can recover the typosquattted domain name through the Uniform Domain Name Dispute Resolution Policy, or UDRP. That, however, would cost brand owners $79 million.

 

The upside, according to AdAge.com, is that only 16.5 percent of typosquatted domain names actually receive traffic because not all typos are the same.

 

 

Listen to our CEO’s podcast “The Daily Drive” to stay driven and get great business insights from top business leaders. –

Are you ready to scale your agency with a quality white label SEO, white label PPC, or white label social media provider?

If so schedule a meeting here –