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For the second year, cybersquatting – the practice of abusing trademarks within the domain name system – continued to rank as brandjackers’ tool of choice for exploiting reputable brands, growing by 18% in 2008. Brand abuse grew overall across mainstream industry brands including apparel, automotive, high technology and media. In addition, phishers expanded their targets in 2008, with 444 organizations phished for the first time.

“MarkMonitor Brandjacking Index: 2008 – The Year in Review” measures the effect of online threats to brands quarter-over-quarter throughout 2008. The Brandjacking Index investigates trends, including drilled-down analysis of how the most popular brands are abused online and the industries in which abuse is causing the most damage. The report examines how brandjacking tactics – such as cybersquatting, false association, pay-per-click (PPC) abuse, objectionable content, unauthorized sales channels and phishing – have changed over the past year.

“Online brand abuse has reached a critical phase during which new exploits are accelerating while older threats endure, causing real and tangible harm to corporate reputations, intellectual property, customer relations and revenue streams,” said Irfan Salim, president and chief executive officer of MarkMonitor. “The good news is that brand holders have resources available to them to take action. The companies who are most successful in fighting abuse are those that make defending their brand a priority at the highest levels of management.”

Cybersquatting continues as tool of choice for brandjackers.

• Cybersquatting rose 18 percent during 2008, making it the most perpetrated form of abuse for the second year in a row.

• A total of 440,584 instances of cybersquatting were identified in Q4, followed by 86,837 instances of false association and 33, 614 instances of pay-per-click abuse.

• Consistent and notable quarter-over-quarter growth in cybersquatting for two years demonstrates that brandjackers are increasingly leveraging trademarks as they make use of best practices in search engine optimization to divert traffic to illegitimate or unauthorized sites.

• Brandjackers are combining cybersquatting with other abuses, a practice called “blended abuse,” to attack brand reputations.

Brandjackers increase focus on e-commerce and offensive content abuses to drive revenues.

• E-commerce abuse grew by 46 percent over 2008 and 13 percent over Q3 to a yearly high of 24,589 instances.

• Offensive content abuse grew by 21 percent over 2008 and 23 percent over Q3.

• Brandjackers increasingly leverage search engine optimization techniques for e-commerce and offensive content abuse to drive revenues.

Abuse across mainstream industry brands including apparel, automotive, high technology and media continues to rise.

• Abuses of apparel brands rose 28 percent in 2008. Other industries experienced notable growth in brand attacks in 2008 including automotive at 21 percent, high technology at 21 percent, and food and beverage at 17 percent.

• Abuse of media brands reached a yearly high of 43,832 instances, signifying an 11 percent increase in 2008.

• Phishing remains the top brand-related problem for financial institutions due to increasingly sophisticated methods and technology.

The United States, Germany and the United Kingdom continue to host the majority of brandjacking Web sites.

• While brand abuse is prevalent through the world, for the second year the United States, Germany and the United Kingdom are home to the majority of brandjacking Web sites.

• 68 percent of Web sites that host brand abuse are hosted in the United States. Germany hosts 9 percent followed by the United Kingdom at 4 percent. Canada hosts 4 percent.

• English speaking countries account for 80 percent of the top 15 countries hosting brandjacking Web sites.

Phishers move into new verticals, become more targeted, and continue to scale operations.

• A total of 444 organizations were phished for the first time in 2008 as fraudsters continued to exploit opportunities to find new targets. Additionally, 422 organizations were phished in Q4 2008, an increase of 8 percent from Q3 2008 and 7 percent over the previous year.

• Phish attacks against “other” industries (non-auction, payment services, retail/service or financial brands) reached 11,000 in 2008, a 135 percent increase.

• Attacks against payment services brands increased 122 percent in the second half of the year. Attacks against financial services brands increased 51 percent in the second half of the year, a rise MarkMonitor attributes to the current economic crisis.

• Phish attacks against retail/service brands dropped 83 percent in 2008 and attacks against auction brands dropped 67 percent in the second half of the year.

• A total of 36 percent of phish sites were hosted in the United States in 2008, followed by the Russian Federation, Republic of Korea and France each at 6 percent and Germany at 4 percent.

“Brandjackers are honing their techniques as they continue building their revenue on the good names of leading brands globally,” said Frederick Felman, chief marketing officer of MarkMonitor. “That 80 percent of abuse sites identified in our study last year remain active today confirms that abuse is economically sustainable for fraudsters. We expect attacks to grow both internationally and in complexity, further increasing the threat to organizations’ reputations and revenues.”

The Brandjacking Index is an independent report produced by MarkMonitor that tracks and analyzes abuses of 30 brands from the Best Global Brands study by Interbrand. The cornerstone of the report is the volume of public data analyzed by MarkMonitor using the company’s proprietary algorithms – no customer data or proprietary customer information is used to create the Brandjacking Index. MarkMonitor searches approximately 134 million public records daily for brand abuse in domain data as well as U.S. and international Patent and Trademark Office data.

The phishing data MarkMonitor analyzes is based on feeds from leading international Internet Service Providers (ISPs), e-mail providers and other alliance partners. The company has scanned billions of Web pages since November 2004 and processes up to 16 million unique suspected phishing e-mails daily.