Tricky Tactics that Disrupt Online Revenue Streams

James A. Kaminski, Esq.
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May 2010

ays to market to consumers over the internet have changed exponentially over the years.  More goods and services are promoted and sold over the internet than ever before.  Unfortunately, clever competitors have developed new ways to redirect revenue streams, costing businesses millions.  Further, a disgruntled customer can inflict serious damage on a company’s reputation in an attempt to dry up sales.  Even if these tactics drive traffic away from a web site for only a day or two, millions of dollars and much good will can be lost.  Consider these scenarios:

Scenario 1:  You take great efforts to ensure that the terms and conditions of your offer are fully disclosed to consumers on your web site.  You are the market leader.  You recently noticed a decrease in market share.  You survey your competitors and learn that the overwhelming majority are not disclosing the terms of their offers in a manner that consumers are likely to see – far from an “I Accept” button for example.  You contact the companies and they ignore you.

Scenario 2:  A disgruntled consumer has it out for you.  For whatever reason, he is unhappy with the service you provide.  He posts scathing and untrue diatribes about you personally and your company on consumer “advocacy” and critique web sites.  Worse, he recommends that other consumers contact your federal, state or provincial authorities and file a complaint.  You begin receiving no less than five inquiries from those authorities daily and you become concerned that a government lawsuit is imminent.  You contact the consumer web sites to explain the situation and they refuse to eliminate the posts.

Scenario 3:  A publisher in an advertising network purchases your trademarks as key words in Google’s ad words program.  When consumers try to search for you, an ad appears that links to your competitor’s web site.  You contact Google, but they are non-responsive because their policy is not to get involved in a case like yours.  The ad network claims that they have no way of getting the publisher to stop.  Online sales decrease 25% in the first day the ad runs.

These and countless other situations may severely impact the number of consumers visiting your web site and drive down revenue.  Don’t lose hope, however, because there are certain measures you can take to reduce or eliminate the negative effects of such tactics.

The most effective way to address each scenario described above is to devise a multi-pronged approach that pulls out all stops.  Obviously, the first thing to do is to contact the company directly and ask them to stop or change the activity.  In the case of the consumer advocacy web sites, there may be internal policies that provide some recourse against false postings.   Unfortunately, these efforts usually fall short, requiring more creative actions.

Third parties are often more objective and receptive to helping.  Service providers, such as hosting companies and domain name registrars, frequently have policies that prohibit illegal, and sometimes otherwise legal, activity.  Google, for example, may work with you to remove a deceptive ad. 

Nevertheless if all else fails, more extreme measures may be necessary.  Self-regulatory bodies such as the Electronic Retailing Self-Regulatory Program may serve as a type of arbiter in your dispute.  Government regulatory agencies may also have an interest in getting the conduct to stop.  Ultimately, a lawsuit may be necessary. 

To sum it up, the internet provides a means to promote your products and reach audiences in ways that were never possible.  The same advantages of internet marketing also serve as a detriment -- especially when a bad actor is able to hide behind a cloak of anonymity and target your business.  Nevertheless, marketers should not feel helpless when they become victims of such tactics because there are often ways to get the activity to stop.  Well-devised strategies may result in success rates that approach 60%-70%.

© 2010 Hughes & Bentzen, PLLC.