Online hijacking threatens retailers' holiday plans
Unauthorized ads on retailers’ e-commerce sites could cost them $2.1 billion this holiday season, according to a report from Namogoo, a company whose software is aimed at protecting sites from such incidents.
Namogoo scanned 500 web pages from major e-commerce sites to compile the report, finding that 15% to 25% of all e-commerce customer sessions are exposed to unauthorized ads. That number increases to 20% to 30% of all sessions during peak shopping seasons.
In addition, 80% of the ads displayed without authorization during peak season are competitive product ads, sending a retailer’s traffic directly to its competitors, according to the report, the results of which were announced last week at Shop.org in Los Angeles.
In cases where unauthorized ads send shoppers to a competitor's web site, that competitor may have no idea what's happening, according to Namogoo co-founder and CEO Chemi Katz, who spoke with Retail Dive about the study results. The perpetrator could be using another company's ads to get users to click, and then monetizing the clicks in some other way, Katz said.
The user's machine is often the problem, having been exposed to malware through insecure public Wi-Fi or via a download that appeared legitimate but wasn't, Katz said. This malware then drops suspect ads into the user's browsing sessions.
In any case, online journey hacking is getting to be a big problem. "It has been going on for the last three or four years, but has been really proliferating in the last year and a half," Katz said. "And there is always a rise in the last quarter of the year with the holiday shopping activity."
It's a potentially disastrous scenario heading into the holiday season, as retailers could lose customers and sales, and users could have their personal shopping behavior compromised. If users begin to feel they can't trust the ads that appear on a certain shopping site, they may no longer visit that site, even beyond the holiday season. After all, 68% of shoppers are willing to leave e-commerce sites due to a variety of simple functionality issues.
The problem is growing and the losses are piling up in part because the Internet advertising environment — how, when and why certain ads appear on certain sites — is itself hard to track. "The chain of affiliations involved is just very complex," Katz said. Namogoo's journey hijack prevention software aims to scan millions of web pages for unauthorized ads, and to remove the locations of bad ads when they are found.
Namogoo currently can scan web pages across all kinds of desktop or mobile devices. It can't scan native retailer apps yet, but plans to have that capability early next year, Katz said, adding that it will be needed. "On mobile, we are seeing infections starting to happen on both iOS and Android devices," he said. "There is no device that is off limits."