Staying one step ahead in the digital world

Back in 1999, Naomi Klein’s No Logo hit our bookshelves. Klein argued that companies had moved from being simply producers of consumer products, to being lifestyle choices. The compelling event for this shift was the growth in the availability of the Internet.

The next generation of big brands would understand the importance of embracing a rapidly-changing environment where the importance of ‘bricks and mortar’ was evolving into the importance of ‘clicks and order’.

In the past 10 years we have seen more technological change than in the previous 2000. We now live in a world where the average consumer owns more than four Internetconnected devices and, based on statistics from Internet World Stats, 32.7 percent of the Earth’s population has Internet access, a growth of 528 percent since the publication of No Logo.

Today we consume everything online, organising our entire lives from the palms of our hands. Companies which are not adapting to an online future will see their market share dwindle.

The Internet is no longer viewed as the second Wild West. In the space of a decade almost every company has moved online. There is no doubt that the Internet has silently but inexorably revolutionised our lives. But, as with all revolutions, freedom has come at a price. The removal of global barriers online has opened up dangers to consumers and businesses alike.

Big brands are realising the huge potential of reaching new global markets online. The key to this success is to follow HSBC’s example, and act locally. One size does not fit all online, so significant thought and planning needs to go into ensuring a successful launch of an online business model in a new market. Online globalisation requires content localisation, messaging, and design.

Some well-known companies have paved the way by successfully implementing a localisation strategy. Fire up your laptop today in an Internet café in Milan, Munich or Madrid and you will see a local version of the world’s most visited website: Google. The page looks almost identical wherever you are in the world, apart from the language of the search buttons.

Google automatically redirects you to google.it, .de or .es by analysing your IP address. Its mantra is to deliver the most accurate results for every search, every time, so if you want to know a train time while in Milan, you search by clicking the ‘Cerca con Google’ button and your results will be tailored to show you those most relevant to your current location.

The real benefit for global brands, however, comes when they combine on- and offline activity. The slogans ‘The Real Thing’, ‘Just Do It’ and ‘I’m Lovin’ It’ represent three of the biggest brands in the world, and Coca-Cola, Nike and McDonald’s have created integrated campaigns using this consistent messaging. Justdoit.com is as important to Nike as the Nike.com domain name.

Matching geographical markets and product sets with localised domain names and content is an essential part of any global online strategy. Country-specific domain names continue to grow at a rapid pace. The German .de domain name now has more than 15 million registrations, making it the third most-used suffix in the world.

The way to a fast buck

Imitation may be flattery, but in the online world the well-known proverb could be changed to ‘imitation is an easy way to a fast buck’. Counterfeiting can affect any brand that produces physical goods, wherever it trades: it is not a problem born out of the Internet.Forgery is a centuries-old profession, and today counterfeiting is a high growth business.

Many Western businesses have outsourced production to Asia in order to benefit from cheaper labour and raw materials. However, factories that produce legitimate products for a brand have also been known to produce counterfeit products, often using the same materials, labour and production techniques. Ignoring moral and legal issues, they see counterfeiting simply as a means of maximising their production processes, providing employment and boosting the local economy.

The spectacular rise of eBay and other marketplace sites has meant that thousands of small businesses have been able to flourish, finding customers across the world at little cost. But this is also a free market economy: the ideal environment for counterfeit goods. There are few barriers to entry and prices are setby what the buyer wants to pay, and what the seller wants to offer. Consumers love a bargain, so they will often be willing to sacrifice quality for a better price. And every time this happens it damages the brand’s reputation.

Cybersquatting—registering domain names that look remarkably close to a brand name—is a common form of counterfeiting, and could be costing trademark holders more than $1 million per brand, per year. Counterfeiters do not even need to try to be proactive.

We all make mistakes when we use a web browser on occasions, so misspellings, or ‘typosquatting’, can often deliver victims to corrupt sites. To the untrained eye, HBSC.com looks very similar to HSBC.com. When combined with an authentic-looking website, customers’ financial data is at risk.

According to a September 2011 report from Symantec, more than two-thirds of adults had been victims of cybercrime. And this number is set to rise. The increasing ease of compromising mobile devices (attacks on mobiles were up 42 percent year-on-year), the willingness of users to give away personal data on social networking sites and a lack of understanding of basic PC protection, are all fuelling these numbers. Symantec estimates that there is a victim of cybercrime every 14 seconds somewhere in the world. In 2011 it was estimated to have cost the world economy $114 billion.

"For an online brand it is no longer just a question of registering your domain names in key geographical regions, or monitoring potential brand infringements."

Facebook is listed as a multi-billion dollar NASDAQ company with more than 900 million active users—more than 20 percent of the global population.

Every 60 seconds there are more than half a million updates or comments added along with more than 130,000 photos. It is hardly surprising that cybercriminals have begun targeting their approach to social media sites.

The new face of digital crime is often unseen. Companies can take basic precautions to ensure that they are not part of the problem. Secure Sockets Layer (SSL) is a vital tool for online businesses. It informs users whether a website is genuine and can help discover viruses and malware before they can do real damage. NetNames works closely with Symantec—which blocks more than 4,900 infected websites per day—to provide a range of solutions for customers of all sizes.

All the trends point to significant growth in demand for online brands and services. Similarly, we are unlikely to see any reduction in the amount of cybercriminal activity. Prevention is not the only cure in this instance. Consumers and brand owners alike need to be educated on the dangers. But perhaps the biggest threat is just around the corner.

The new world

In June 2012, the International Committee for Assigned Names and Numbers (ICANN) announced that it had received 1,930 applications for new generic top-level domain name (gTLD) suffixes. In the next decade our online experience will be shaped by the likes of .shop, .music and .london. In announcing the applications, ICANN’s chief executive officer Rod Beckstrom commented that this would change the Internet forever. You cannot argue with his statement, but will it change for the better or worse?

For an online brand it is no longer just a question of registering your domain names in key geographical regions, or monitoring potential brand infringements. A simple nike.com presence may now have to look at nike.london, nike. boots and nike.soccer. For a brand owner this is a logistical minefield and a potentially very expensive one too.

Brand owners will need to ensure that they consider their infringement policies. What will they allow others to register, and what will they pursue for defensive reasons? Sedo, one of the world’s largest domain name brokers, has conducted a study of what it believes will be themost effective new domain name suffixes. It feels that .shop, .web and .site will be the most popular and thus the ones where brand owners will have to be the most diligent.

The new gTLD world is still at least a year away, and a lot can change in that time. NetNames has worked closely with ICANN as one of the leading global registrars and will continue to advise its clients on what steps they can take to ensure that their brands are protected, both at the evaluation stage of the new gTLDs through potential formal objections and, once launched, through trademark protection services.

The growing threats of entering global commerce and reaching out to new customers and markets must be part of a company’s strategy. Just as opportunities open up, so will new threats. The protection of vital online digital assets needs to be the cornerstone of any expansion strategy—a company has to stay one step ahead in the 21st century.