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Protecting your brand online - a new marketing imperative

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					White Paper   Protecting Your Brand Online:
July 2009
              The New Marketing Imperative



              Executive Summary

              There’s no question that the Internet is an ideal venue for marketing. But
              along with the advantages come risks, due in part to the core qualities of the
              medium: openness, anonymity, and instant global reach.

              Because the online world has seen so little formal policing, it’s ideal for the
              “hijacking” of brands online. Scammers have realized that the value and
              power of your brand is very good for business — their business — and their
              gains come at the expense of marketers.

              The number of venues available for taking unfair advantage of legitimate brands
              keeps growing: search engines, social networking, eCommerce, auction and
              tradeboard sites, email, blogs and microblogs. Whether the illicit activities are
              aimed at diverting traffic to competing businesses, exploiting your brand to
              generate advertising revenues, or stealing directly from your bottom line with
              potentially counterfeit and grey market sales, they all have the effect of eroding
              brand value and devaluing your marketing investments and revenue.

              Unlike offline media, marketers have little to no control over brand-related
              content online. As a result, the online world requires closer monitoring. And
              because online brand abuse causes substantial brand erosion — lost revenue,
              diminished customer trust, and tarnished reputation — marketers may have
              the greatest stake of anyone when it comes to protecting brands online. As
              the de facto guardians of the brand, marketers can and should take the lead
              in protecting what they themselves have built — rather than relying solely on
              other areas of the organization. Best practices, targeted technologies and
              collaboration with other functional units can facilitate a holistic strategy for
              protecting hard-earned brand equity and revenues.
    White Paper: Protecting Your Brand Online




                                                Contents

                                                The Brand Builder’s World, Then and Now ..............................                                        3
                                                Online Brand Abuse: Should Marketers Worry? .....................                                             4
                                                  Like it or not, marketers have the most to lose from online
                                                  brand abuse .............................................................................................   4

                                                Prevalent Abuses: A Dismayingly Long List ..............................                                      5
                                                Marketers: Their Own Best Hope ...............................................                                9
                                                What NOT To Do ..........................................................................                     9
                                                Best Practices in Online Brand Protection ................................ 10
                                                When to Get Involved? NOW ......................................................                              11




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The Brand Builder’s World, Then and Now
Not so long ago, brand-building was easier to manage than in today’s wide-
open environment. Go back three, even just two decades and count the
communications vehicles: marketers could choose from newspapers, magazines,           According to DIRECT
television and radio, enjoying substantial control over all of them. With a media     magazine, one in seven
plan in place, and absent any massive public relations disasters, marketers
                                                                                      searches on branded
virtually dictated what would be seen, heard and read about their brands.
                                                                                      items lead users
Things were similarly simplified at the retail level, where prospect and customer     somewhere other than the
interactions were limited to brick and mortar stores, catalogs, and toll-free
telephone lines. Signage, scripts, point-of-sale promotions and training kept the
                                                                                      brand’s website. Are YOU
brand message on target.                                                              losing out on this much
                                                                                      traffic—or more?
Things have changed—thanks to the Internet. In what has proven to be a marketer’s
dream, communication and distribution channels have grown (and continue to
expand) exponentially: from search engines to eCommerce, auction sites and trade
boards, from blogs to social networking sites and—yes, even microblogs.

The marketers of 1980 would have jumped at the opportunity to leverage such
flexible, cost-effective, and easily segmented media platforms and distribution
channels. But they may also have landed in many of the same pitfalls we face
today—the Internet’s openness, anonymity, global reach and distinct lack of
formal policing have paved the way for brand abuse, traffic diversion, online fraud
and unauthorized distribution channels.

Joining the attack is a growing army of scammers aiming to “hijack” brands online.
Fraudsters know the value of a brand as well as marketers do, and they’re working
quickly to profit from the brand value and customer loyalty legitimate marketers
have built. Their activities severely undermine the marketing investments made by
legitimate brand owners.

Which brings us back to the brand builders—marketers—and their own stake in
the struggle between the legitimate use of brands to drive revenues and profits,
and illicit or fraudulent brand abuse designed to take some of those profits away
from its rightful owners. Who, more than marketers, would value protection of the
asset they’ve invented, developed and nurtured?

Here’s who: the CEO and the board, who know as well as marketers do that
brands drive business. That’s why today’s marketers, more than ever, are
expected to measurably deliver more revenue, customers, awareness, loyalty, and
everything else a brand can create—all with maximum return on each marketing
investment. The current economic downturn merely turns up the heat.

A recent study by Verse Group and Jupiter Research (now Forrester Research)
confirms these priorities. In a February, 2009 survey of Chief Marketing Officers,
two themes emerged: the need for more marketing accountability, and the



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                                                mandate to more effectively manage brands across multiple platforms in new and
                                                traditional media. The emphasis is on delivering measurable, positive return on
Online display ads topped                       marketing investments, translating brand experiences across differing touchpoints,
                                                and—naturally—achieving more, with smaller budgets.
$7.6 billion in 2009, while
search ad spending                              As a result, marketers are highly incented to protect the brands they’ve built and to
                                                preserve the marketing ROI on which they’re increasingly being measured.
surpassed $10.5 billion.
How much of this was                            Online Brand Abuse: Should Marketers Worry?
wasted or diluted because
                                                Today, some Internet users find your brand online through direct navigation, but
of scammers? How much                           most get to you through a hyperlink—from organic or paid search results, other
do YOU have at risk?                            sites, email messages, or social media. While this array of media presents diverse
                                                opportunities for legitimate marketers, it offers the same capabilities to less
                                                savory—but still often talented—scammers.

                                                These brandjackers invoke all the same creativity, technology skills, and sophisticated
                                                marketing techniques available to legitimate marketers to drive traffic and conversions—
                                                and in far too many cases, their savvy may outdo that of the “good guys.”


                                                Like it or not, marketers have the most to lose from online
                                                brand abuse
                                                Revenues and margins both suffer as customers do business with unauthorized
                                                channels. With marketing organizations being held more accountable for both of
                                                these measures, marketers can’t afford to ignore this impact.

                                                Wasted marketing budgets are another worry. Online advertising spend, in
                                                particular, is significantly diluted when legitimate ads must compete with illicit ones;
                                                further dilution occurs simply because a company’s brand is appearing in so many
                                                unexpected, unplanned, and unwanted venues. The unavoidable result of this
                                                competition is fewer legitimate impressions, and fewer clicks.

                                                Reduced marketing ROI. But it’s not just marketing budgets that lose their
                                                punch. Companies invest millions of dollars to create, promote and maintain their
                                                brands and messages, typically across numerous platforms. As online traffic is
                                                diverted to unauthorized, competitive, or probable fraudulent venues, the return on
                                                every one of these marketing investments shrinks. This negative impact isn’t limited
                                                to the online facets of a brand: overall brand value is diminished, diluting offline
                                                marketing activities as well.

                                                Meanwhile, as scammers exploit a brand’s good name and reputation for their
                                                own profits, they significantly erode customer trust. Customers lured into doing
                                                business with scammers can and do associate any negative results—inferior
                                                product, bad service, or even criminal identity theft—with your brand. Consciously
                                                or sub-consciously, your brand becomes bad news—and that means less
                                                business moving forward.



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We can’t blame customers—they may not even know they’re dealing with an
imposter—but we can (and should) worry about these deceptions that could lead to
customer harm. Brand owners can face higher customer service costs and more                          Search engine marketing
customer churn because of customer dissatisfaction caused by online brand abuse.                     abuse lures 14 of every
So… yes, marketers have plenty to worry about—and the risks go to the heart of the                   100 users searching
marketing budget and beyond. Online brand abuse causes deliberate, substantial                       on your brand to
brand erosion—lost revenue, diminished customer trust, and tarnished reputation—
with the very real effect of shrinking the return on marketing investments.
                                                                                                     a competitor’s or
                                                                                                     scammer’s site. How
Prevalent Abuses: A Dismayingly Long List                                                            many customers can you
To protect—and even guide—the investments you make building your brand,
                                                                                                     regain by taking action?
it’s useful to understand the online abuses that can threaten it. A list of the most
popular abuses follows, and it’s worthwhile to study it in full. Attacks on brands
commonly entail blended abuse—multiple, integrated tactics—which, left
unchecked, can overwhelm even your best brand-
building efforts.

Traffic diversion schemes, elements of many
blended abuse strategies, unethically divert traffic
to competing or illegitimate sites. The tactics used
may include search engine marketing abuse,
spam, cybersquatting, SEO manipulation and
other techniques, all described below. The goal
of these schemes is always the same: to directly
steal traffic meant for legitimate sites.

Search engine marketing abuse occurs when
unauthorized parties use a brand as a keyword
in search marketing, triggering ads that divert
traffic to sites promoting unrelated, counterfeit, or
competitive brands. Because the major search
engines have varying policies on this practice, the
onus is on brand owners to police where and how             Figure 1. In this example of search engine marketing abuse, a luxury goods e-tailer
their brands are being used by others.                      has used another brand’s trademarked name in its ad copy—and has inappropriately
                                                            purchased the corresponding keyword. That search ad leads to a site which is likely
                                                            selling counterfeit goods.
This practice represents significant lost revenue
opportunities for the brand owner. At a minimum,
search engine marketing abuse levels a direct hit on legitimate marketing budgets
by diluting a brand owner’s search marketing spend.

Pay-per-click abuse occurs when a scammer sets up a website to host paid
search ads for the purpose of generating revenue when the ads are clicked. The
scammer often leverages a well-known brand name in the domain name and has
loosely-related ads served to its site. The practice is lucrative: pay-per-click sites
targeting the world’s top 30 brands were up 24 percent in 2008.


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                                                                                    Given the way online advertising is bought and sold,
                                                                                    ads from legitimate brand marketers’ are sometimes
                                                                                    displayed on these sites, and Internet users may
                                                                                    ultimately land on a brand owner’s site. But this means
                                                                                    the brand owner has paid for unneeded clicks, as users
                                                                                    likely would have found the legitimate site without being
                                                                                    diverted to extraneous pay-per-click sites. In other
                                                                                    words, legitimate brand marketers are subsidizing traffic
                                                                                    diversion—our investments in our own brands are being
                                                                                    used to finance attacks against us.

                                                                                    SEO manipulation. When brands, slogans and
                                                                                    trademarks are placed in a website—as visible text,
                                                                                    hidden text, or within HTML meta tags—they affect
                                                                                    search engine rankings. When someone other than the
                                                                                    brand owner uses this type of search engine optimization
                                                                                    (SEO), they unfairly affect rankings.

    Figure 2. This example of pay-per-click abuse urges diverted traffic to buy      This unethical practice, is one of a number of Black Hat
    from competitors and counterfeiters—while earning advertising revenue for the
    domain owner.                                                                    SEO practices, that cause the abusing sites’ rankings
                                                                                     to be moved up in search engine results. An unaffiliated
                                                          eCommerce site might be listed before a legitimate company site, resulting in
                                                          higher click-through rates for the unaffiliated site.

                                                                                    This “organic” form of traffic diversion undermines
                                                                                    marketing investments in two ways—siphoning traffic
                                                                                    away from brand owners despite their own outlays
                                                                                    for legitimate SEO efforts, and forcing legitimate, paid
                                                                                    search advertisements to compete with illicit, organic
                                                                                    search results.

                                                                                    Cybersquatting and typosquatting is the tool of
                                                                                    choice for online scammers who use the domain name
                                                                                    system to abuse trademarks. Brand names—spelled
                                                                                    correctly or, in a practice known as typosquatting,
                                                                                    spelled incorrectly—are used within a domain name,
                                                                                    enabling the squatter to divert traffic meant for a
                                                                                    legitimate site to an illicit site which may sell counterfeit
                                                                                    goods, utilize pay-per-click abuse, host adult content,
    Figure 3. In this blended abuse example, a trusted brand name is used within    or conduct other illicit activity. In some cases,
    the URL—cybersquatting—to divert traffic to a site combining offensive
                                                                                    cybersquatters may also hope to sell a domain to the
    content with unrelated eCommerce sales.
                                                                                    legitimate brand owner at a profit.

                                                          In a more recent trend, scammers employ similar techniques on social networking
                                                          sites, impersonating brand owners by incorporating the brand in their own user
                                                          names, or by creating profiles which “look and feel” like the legitimate brand.




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Regardless of the ultimate goal, these squatted
domain names, with their dishonestly obtained brand
power, are highly effective at diverting traffic from its
intended destination. According to the MarkMonitor
Brandjacking Index®, which tracks online brand
abuse, cybersquatting comprises the majority of
online brand abuse—up a full 18 percent from the
previous year.

Counterfeiting and piracy. The sale of fake
physical goods—counterfeiting—and of fake digital
goods such as music, movies, software and gaming
software—piracy—is rampant online, occurring on
B2B exchanges, auction sites, eCommerce sites,
in spam and through peer-to-peer (P2P) networks.
Online venues represent the fastest-growing segment
of the counterfeiting trade, with estimated sales of
$133 billion in 2009.

While generating revenue for the perpetrators, these          Figure 4. This purportedly Canadian online pharmacy—actually hosted in the Russian
                                                              Federation and potentially selling counterfeit and grey market goods—erodes
exploits also represent an attack on brands, resulting
                                                              brand name medicine prices, consumer confidence, and brand image.
in lost revenue, erosion of brand equity, and, in many
industries, potential consumer health and safety risks
—for example, the sale of potentially counterfeit drugs or automotive parts. With
counterfeit goods sales up by 45% in 2008 alone, with the Internet facilitating 80%
of the increase in sales, the threat to marketing budgets is huge—and growing.

Grey market selling—the sale of authentic goods through unauthorized
channels—is also growing rapidly online, representing a significant threat to
brand equity and revenues. A full 40 percent of surveyed Global 2000 marketing
executives admit some price erosion due to grey market or counterfeit sales.

Grey market goods are obtained through a variety of means: theft and discount
fraud are common, as is refurbishing damaged goods. The goods are then sold
on B2B exchanges, auction sites, and eCommerce venues. Parallel trade, in which
goods priced for a specific geographic market are diverted and sold at a premium
in other markets, is another widely used strategy.

Brand defamation. One of the Internet’s most desirable attributes is the
platform it provides for people to speak their minds — and that includes
opinions about your brand, good and bad. But when your brand is slandered
for purposes of driving traffic to a competing brand (legitimate or fake), it’s online
brand abuse.

These slander-for-profit exploits can be found in many places online: in social
networking sites as well as in blogs and on message boards. The resulting damage
to a brand’s image and reputation—not to mention associated revenue hits—can



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                                                           be devastating. Interestingly, this is one of the easiest ways to attack a brand
                                                           online—no technology skills or special knowledge are required.

                                                           In false association, scammers imply a relationship with a company or brand where
                                                           none exists. A bogus site may closely mimic the appearance of the true brand,
                                                           falsely claim the legitimate company as a satisfied customer, pretend to be an
                                                           authorized reseller, or claim to be a member in a franchise network when it is not.

                                                           False association is popular with scammers—according to the Brandjacking Index,
                                                           the practice increased 20 percent in 2008 over the previous year—because it is
                                                           highly effective at building credibility and trust as well as in driving significant traffic
                                                           to illicit sites. Since it can result in legal liability for the brand owner—or, as in the
                                                           case of fake pharmacies selling drugs that may be counterfeit, the possibility of
                                                           customer harm—marketers find false association particularly onerous. The practice
                                                           can also significantly tarnish a brand owner’s reputation when Internet users
                                                           perceive the legitimate brand’s endorsement of an unsavory business or content.

                                                           Spammers send unsolicited emails—frequently leveraging well-known brands—in
                                                           order to divert traffic to illicit sites of every type. In 2008, spammers sent 53.8 trillion
                                                           email messages—70 percent of all email—mostly using bulk email tools.

                                                                                     To encourage recipients to click through, spammers design
                                                                                     their email to imply that their product or service is endorsed
                                                                                     or sanctioned by the legitimate brand. Users who do click
                                                                                     through, encounter everything from pay-per-click abuse to
                                                                                     sales of possibly counterfeit or pirated goods.

                                                                                     Spam may be viewed as a nuisance, but its real danger
                                                                                     is in driving recipients to nearly every other type of abuse
                                                                                     discussed here. Spam also directly impacts marketing
                                                                                     budgets by reducing the effectiveness of legitimate
                                                                                     email campaigns.

                                                                                     Phishing and malware. Phishers use email and newer
                                                                                     channels such as social media, preying on the trust people
                                                                                     have in a brand in order to obtain personal credentials—
                                                                                     including social security and credit card numbers—through
    Figure 5. This phish site lures Internet users with email and a URL containing   a bogus site that appears legitimate.
    a registered trademark of the brand owner.

                                                                                  In a variation, an illicit site or email attachment installs
                                                           malware, viruses, keyloggers or other software that automatically steals usernames,
                                                           passwords, and additional information without a user’s knowledge.

                                                           These schemes are most frequently aimed at financial service providers, but
                                                           phishers are expanding their reach by targeting gaming companies, career sites,
                                                           social media publishers, retail firms and others. In fact, 444 organizations were
                                                           phished for the first time in 2008. The potential damage to legitimate brand owners
                                                           ranges from lost customer trust to millions of dollars.


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Marketers: Their Own Best Hope
Knowing how directly online brand abuse affects them is a key first step for marketers.
Fortunately, the problems presented by online brand abuse are solvable, especially
if brand owners leverage the technologies available to them. After all, it’s only
                                                                                            No enterprise can compete
reasonable that technology, having enabled the problem, can also be used to fight it.       without efficiency in its
Because abuse impacts a wide range of business functions, the work of protecting
                                                                                            marketing spend; when
against it will involve a range of functional units within the enterprise. Marketers will   that spend must be limited,
want to take a leadership role—both for the good of the enterprise and to protect           it’s critical to eliminate as
marketing investments and brand reputation. The current economic downturn
provides further incentives for marketing’s involvement—notably, pressure on marketing
                                                                                            much waste as possible.
budgets. No enterprise can compete without efficiency in its marketing spend;
when that spend must be limited, it’s critical to eliminate as much waste as possible.

If marketers choose their strategies accordingly and work collaboratively with other
functional units to implement holistic protection strategies, they may succeed in
protecting hard-earned equity and revenues.


What NOT To Do
As marketers engage with the problem—and, ideally, join with other functional units
to do so—there are strategies best avoided. They include:

Doing nothing. There is little likelihood that online brand abuse will go away of
its own accord. As long as there is money to be made, scammers and criminals
will leverage your brand to do it. Because you’ll have to deal with the problem, it
makes sense to focus on prevention, which is frequently much easier than repairing
damage already done.

Manual approach. Trying to keep tabs on uses of your brand across the vastness
that is the Internet simply isn’t feasible—there are too many venues, channels, and
messages moving at high speed. Shifting technological complexities necessitate
a technologically-aided monitoring strategy. One other advantage of automated
monitoring: you’ll demonstrate to potential fraudsters that you actively protect your
brand, which will likely discourage them from attacking, much as a prominently
displayed security system encourages burglars to look elsewhere.

Treat all abuses equally. Given any two specific brand abuses, one will impact
your brand and revenue more heavily, more quickly, or both—and that abuse must
be addressed first. Marketers should work with other functional units to set priorities
for monitoring, response and enforcement.

Respond to every abuse. Brand protection budgets will have their limits, too,
and not every abuse will have an appreciable impact on revenue, reputation, or
marketing budgets—so identify the most egregious abuses, set priorities and focus
efforts where they’ll have the most impact.



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                                                 Best Practices in Online Brand Protection

Brand protection works                           Despite the dangers, there are considerable grounds for optimism. Many larger
                                                 enterprises have deployed holistic, multi-faceted brand protection programs. The
best when detection,                             most successful among these have achieved substantial declines in fraudulent
prevention, and response                         activity; and these declines can be related directly to improved returns on marketing
mechanisms complement                            investments. The strategies employed by these companies include the following
                                                 recommended best practices.
one another.
                                                 See the entire problem. Preventing and responding to attacks can’t begin until
                                                 you’ve gained a clear understanding of how and where your brand may be attacked
                                                 online. Cataloging the risks is a good start, but you won’t be able to effectively
                                                 set priorities until you gauge each threat’s potential impact on your business. In
                                                 particular, work to understand the effect threats have on your online advertising
                                                 spend and across-the-board marketing efforts.

                                                 Speak up for your brand. Don’t depend on Legal and other business functions
                                                 to enforce against online brand violations. Take the time to watch for—even
                                                 anticipate—attacks against your brand, and encourage pro-active defense and
                                                 decisive enforcement action when it’s needed.

                                                 Think big-picture, wide-picture. Brand protection works best when multiple
                                                 detection, prevention, and response mechanisms are designed to complement one
                                                 another. The desired, holistic brand protection approach means assessing every
                                                 channel, every tactic abusers may leverage, including those in offline settings. You’ll
                                                 need to work across organizational boundaries to achieve the synergy needed to
                                                 effectively safeguard your brand.

                                                 Take the offensive. It’s possible to pre-empt fraudsters on a number of fronts—
                                                 and doing so may lead potential infringers to exploit other, more vulnerable brands,
                                                 rather than your own. Be proactive in every aspect of brand protection.

                                                 “Own” your domain portfolio. Too many enterprises spread domain portfolio
                                                 management across multiple organizations or geographies, inviting domainers and
                                                 other scam artists to jump on the inevitable lapses. Do whatever you must to ensure
                                                 your organization has a single, global view of your domains, enabling it to ensure
                                                 timely renewals and quickly assess both opportunities and threats. And keep looking
                                                 forward: when you’re developing a new brand, anonymously register new domains
                                                 well ahead of launch time or even consider your own top-level domain, or ‘dot brand’.

                                                 Take control of online channels. It’s critical to know precisely where your goods
                                                 are being sold—and by whom. Be aggressive about spelling out and enforcing
                                                 channel compliance; this is another area where proactive effort discourages
                                                 undesirable business practices by affiliates or partners.

                                                 Work closely with Legal. They’ll appreciate your efforts to prioritize abuses;
                                                 and they can help you prioritize by understanding enforcement ramifications.
                                                 Collaborate continuously to target the worst, most damaging abuses.


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Keep it real for your customers. Clamp down on fraudulent (and other negative)
online experiences associated with your brand—and do so publicly. Showing
your customers that you care about their experience gives them the confidence
to continue working with you online. Think about it: consumers are less likely to
abandon a cart when they know the brand owner works hard to prevent fraud.

Listen. Some of the most valuable intelligence you can acquire will come from
customers, employees, and other stakeholders outside the inner circle of brand
holders. Reach out to these communities to encourage alerts, ideas, and suggestions.

Know when to tread softly. Not every brand abuse calls for immediate legal
response; in some cases, a simple request to the offender, or a strongly–worded
warning letter, will evoke the best outcome (and, in many cases, at less cost).


When to Get Involved? NOW
As marketers and technologists, we operate in a highly changeable world. We also
know that fraudsters rely on change to identify and exploit opportunities quickly, as
they arise.

The sooner your organization has a cross-functional brand protection effort—
championed and actively supported by the marketers responsible for a brand’s
health and well-being—the better return you’ll earn on every marketing investment.
The time for marketers to stand up to online brand abuse is now.



   Holistic Brand Protection at Epson
   Challenges
   Faced with ever-increasing counterfeit and grey market sales online, digital
   imaging technology provider Epson created a cross-functional team to build
   and launch a brand protection strategy.

   Solutions
   By deploying an integrated, automated brand protection solution on a global
   level, Epson has complete visibility of its global domain portfolio and brand
   usage online. The company is now able to safeguard its brand equity against
   a wide range of online abuses.

   Results
   These measures have resulted in a three-fold reduction in counterfeit activity
   on consumer auction and B2B tradeboards, with similar reductions in active
   cybersquatting incidents. With brand attacks reduced, returns on marketing
   investments are likely to grow.




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About MarkMonitor

MarkMonitor, the global leader in enterprise brand protection, offers
comprehensive solutions and services that safeguard brands, reputation and                               More than half the Fortune
revenue from online risks. With end-to-end solutions that address the growing                            100 trust MarkMonitor to
threats of online fraud, brand abuse and unauthorized channels, MarkMonitor                              protect their brands online.
enables a secure Internet for businesses and their customers. The company’s                              See what we can do for you.
exclusive access to data combined with its patented real-time prevention,
detection and response capabilities provide wide-ranging protection to the ever-
changing online risks faced by brands today.                                                             MarkMonitor Inc.
                                                                                                         U.S.    (800) 745.9229
To learn more about the MarkMonitor Brand Protection Platform, Solutions and                             Europe +44 (0) 207.840.1300
Services, please visit www.markmonitor.com.                                                              www.markmonitor.com




Boise | San Francisco | Washington D.C. | New York | London | Toronto | Frankfurt

© 2009 MarkMonitor Inc. All rights reserved. MarkMonitor is a registered trademark of MarkMonitor Inc.
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