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Having been involved in this sector for over fifteen years now, the rate of change in the market dynamics continues to surprise me—from its early years when MarkMonitor and NetNames clearly led the space for several years, then seeing well-funded startups such as Yellow Brand Protection and Incopro challenge that, followed by a period of heavy M&A, it is now extremely diverse.
This is confusing for both potential customers and investors who continue to be drawn to a sector that sees double-digit growth and meets the test of dealing with an unsolved business-critical problem that only gets more important as the world goes increasingly online. Throw in new problems, such as fake NFTs and related marketplaces, and we have an interesting but confusing space.
In order to simplify matters, I am therefore dividing my commentary into a number of categories:
Market Leaders — these are the companies that have leadership in terms of market share (by revenue or client numbers) and contribute to the thought leadership in the space. They have global coverage in terms of sales and service and attempt to cover most of the common use cases—anti-counterfeiting, IP abuse on websites and social media, fake websites, digital content piracy, etc.
Challengers — these are the vendors that are aiming to fill that broad requirement but do not yet have the market share, coverage or recognition so far.
Legacy vendors — companies that still hold significant market share but whose solutions and customer base are waning.
Specialists — over the last few years, it has become clear that solving the whole set of issues in the online space cost-effectively may be too much for one vendor, so businesses have developed that focus on solving one significant problem extremely well. An acceptable user strategy may be to deploy a number of these for a large global brand or just to address the one problem that is doing significant damage to a smaller entity.
Regional players—these are vendors that have originated in one country or region and are attempting to address the whole problem set but, due to scale or just their stage of development, are largely focused on clients in a given geography.
I would stress that the content below is my own view of the current state of the Online Brand Protection market. I have offered all the providers the opportunity to dialogue with me, and most of them have taken that up, but I have been clear that it was on a “no fee, no editorial control” basis.
Where they have declined to interact with me, I have used publicly available information and my own knowledge of the players.
I have also spoken to a small number of customers and others who have worked in the sector for a significant period and whose views I respect.
I feel it is worth discussing what we are looking for in a good or successful vendor so it is clear how we should judge them.
Essentially OBP is a straightforward set of steps—search the internet looking for misuse of a term or image, filter the results for false positives and level of criticality, enforce, follow up and report back to the rights owner with some degree of analysis. In theory, 100% of that process could be entirely manual or entirely automated, and in practice, most vendors use a mixture of the two.
In practice, the breadth and success of searching, the speed and accuracy of filtration, the diligence of follow-up, and the completeness of reporting vary hugely depending on the quality of staff and the capabilities of the technology deployed.
The ability to automate processes improves speed and should improve accuracy (but may not), as well as scalability and cost-effectiveness. A vendor that does all or most of its work manually may struggle for scalability and profit, and a provider that tries to do it all with technology may only be able to solve a narrower set of problems (enforcement on an Asian platform with a disputed or absent trademark, for example, would most likely require human intervention to be successful).
The strength of technology, its ability to crawl far and wide and categorize efficiently, plus the knowledge and skill with which client-facing staff navigate the digital world are the key measures of a vendor, in my opinion, and the acid test of those is customer satisfaction, retention and acquisition.
Given that most of the players in this market are privately funded, there is very little solid data on revenue, market share, profitability, etc. My assessments, therefore, are based on my personal knowledge of the industry and some access I have had to information over the years.
Since the dismemberment of MarkMonitor, I do not believe any provider has revenues related to OBP that exceed $100m and the only one that even tops $50m, as far as I can tell, is Corsearch.
Corsearch has a legacy business related to Trademark Search and Watch, which is not part of this discussion, but its OBP business really started with the acquisition of Yellow Brand Protection in 2018, followed by the Dutch startup Pointer, then Marketly, Incopro and Entura—this has been a roll-up of the sector that was completed by Astorg, who took ownership in 2021.
They do, therefore, have a very complete solution including all the usual elements of OBP as well as Digital Content Protection, and plenty of technology as well as well-tenured staff to service their clients who include heavyweight users in the space, such as Adobe and Johnson & Johnson. They claim to have a significant amount of intelligence in the platform for analyzing data and identifying networks of abusers as well as over one hundred staff in Asia which is a key location for dealing with the problematic platforms and sources of much of the abuse.
In addition, they clearly have an owner who sees the opportunity in the space and has been prepared to invest in it.
I do, however, have two main question marks in terms of their true “leadership” of the market.
The first is in relation to contributing to thought leadership and advocacy, which expands the level of knowledge and improves a lot of IP rights owners generally—whilst they have a number of staff who have been in the sector a decade or more, they do not deploy those to educate the market in the manner in which some vendors have in the past, and they do not espouse a vision very openly.
Secondly, M&A on this scale is always a distraction, and they now have many competing technology platforms which will either be costly and hard to manage or require a consolidation effort to combine the best of each—I am told the latter is taking place and will be finished early this year, but will obviously feel better about this aspect once it is completed and demonstrable.
This Barcelona headquartered firm leads the sector both in terms of the number of clients and marketing and has raised over $100m in capital over a succession of rounds in order to fund that its global expansion and product development.
With over a thousand deployments, they have clearly had a lot of success in new customer acquisition with a focus on the SME market, and their digital outreach and advocacy are second to none.
Having clearly identified that expanding the market is a critical success factor for their own growth, they do an excellent job of helping non-believers understand the criticality of OBP to modern business success. They now have many customers in that segment who are prepared to vouch for them, participate in events and permit their names to be used in marketing materials, which is laudable.
The solution is highly automated with an easy-to-use portal that is designed for self-service covering most of the more common use cases, from anti-counterfeiting and social media misrepresentation to some aspects of digital content piracy. This is great for smaller clients with tight budgets who do not want costly managed service, but they do also have an operations team capable of providing assistance and taking on some of the load.
The question mark over Red Points is whether they can meet the requirements of the most highly infringed brands on the internet—although they can boast companies such as Hugo Boss and Puma as clients, we have not seen any evidence of the big media, electronics or pharmaceutical brands working with them. This may be just a matter of time, or it may be that they cannot offer the sophistication or scale of service to meet this need, yet—only time will tell.
This Israeli-based business is unusual in that it is the only one we are reviewing which is actually public, having listed on AIM, the UK small-cap stock market, in December 2020.
This means we have access to financials that paint a picture of a small (around $7m ARR) vendor that is growing at close to 60% per annum and some way from profitability. This is precisely why they sit in the “challenger” category—they have won some large clients from other providers, have a slightly different positioning from most players in the OBP space and reputedly have very strong technology supported by a smaller but experienced customer success team. With another few years’ progress at the current rate, they could easily join the leadership group.
Their positioning is one of “digital risk protection,” meaning they have solutions in the anti-phishing, threat intelligence and executive impersonation fields, as well as the usual anti-counterfeiting and IP abuse areas and see the CISO as well as other typical OBP targets in marketing, e-commerce and legal as their buying persona. This positioning is shared with legacy providers Opsec and CSC, but the BrandShield solution is more modern and more infosec oriented than theirs, in my opinion.
Their success so far is not as marked in Europe and Asia as it is in North America, and international expansion would seem an important next step for them, as would a more prominent marketing drive may be focusing on the value of combining OBP with other digital threat mitigation which certainly differentiates them from the market leaders.
Appdetex began life in 2012 and was started by one of the co-founders of MarkMonitor, Faisal Shah. It was originally focused on mobile app abuse, although that market turned out to be too narrow and specific to support a mainstream business with real growth ambitions.
Being based in Boise, near MarkMonitor’s main Operations Centre, Appdetex has had ready access to a ready source of staff well acquainted with the online brand protection space, and tenured service professionals are undoubtedly one of the strengths of the company—many of their larger historic contracts consist mainly of people delivering a highly customized service with just an element of technology supporting the project.
This has meant that repeatability has frequently been an issue, with their revenues dependent on a small number of very large contracts with firms such as Apple and Facebook. These are great clients, but this structure of the business makes it hard to scale it and even harder to do that profitably.
I would expect that the recent re-branding, as well as a change in leadership, is a response to this and represents a desire to take the business forward based on a more technology-focused approach. Their “tracer module” was one of the technology strengths of the platform, tracing the dots that join up serial infringers across marketplaces, social media, websites, mobile app stores, etc., and it seems they have based the new persona of the business upon that. They now need to significantly up their marketing and improve their brand recognition based upon this if they are to approach leadership status.
A challenge for Tracer, therefore, is how to retain its current customized high-end customer set while growing the business on a more scalable basis with more tech and less human capital.
The other issue is how they expand beyond their Boise base—currently, they are exclusively represented in EMEA and APAC by Lexis Nexis, the business solutions company that sells their technology and add their own services and customer success capabilities. That is a great way to expand quickly without growing the expense base, but it begs the question of what their global strategy is.
Tracer is undoubtedly a business in transition with a new name, new leadership and some uncertainty about its global plans. In my opinion, they need to re-focus the business, increase their marketing and improve their brand recognition based upon whatever their vision for OBP and go to market are now.
SIPI was founded over a decade ago by the Head of Anti-Counterfeiting of Richemont, the luxury brand group based in Switzerland.
Since then, it has been a small but growing player in the OBP market with a solution set that focused on anti-counterfeiting and built a substantial team in India and China that developed a strong knowledge of the challenges faced by major brands and the processes required to enforce on a global basis.
Through its early years, there was only a basic technological platform behind this, without even a client portal, but today they make similar claims to many vendors around the use of AI, risk scoring and the identification of high-value targets as well as a client-facing dashboard. The emphasis, however, is strongly on service and the creation of a project team around the customer to identify and solve their specific brand protection problems.
In July 2021, SIPI was acquired by Authentix, a significant player in the physical anti-counterfeiting sector with solutions covering track and trace and other authentication offerings creating a similar value chain to that of Opsec Security who, had acquired the MarkMonitor OBP business from Clarivate a year previously. SIPI has since re-branded Authentix Online Brand Protection.
What is clear is that over time they have collected a significant number of clients, including some of the most heavily infringed enterprises and now work for over 200 brands globally. They have a large operational base in Asia, which is positive both from a cost and operational point of view.
The next step for them would be to increase their visibility and develop a clearer go-to-market strategy such that they could actively compete on a broader set of opportunities.
Having made forays into the OBP market by buying GenuOne and P4M over a decade ago, physical authentication player Opsec Security made its latest acquisition in the space by purchasing MarkMonitor from Clarivate in January 2020.
Having founded and led the market for many years, MarkMonitor had an enviable list of large and smaller clients, but its technology base was outdated and a series of ownership changes and acquisitions of its own diluted the focus. This meant that increasing proportions of human capital were deployed to meet a very broad set of use cases, from basic anti-counterfeiting to digital fraud and both on demand and live piracy, driving the cost base of the business through the roof.
Since the merger with Opsec the focus has been on getting this under control, which is understandable, but it has also resulted in the loss of large numbers of knowledgeable staff from all parts of the business and the company no longer has the depth of skills for which it was once known.
Steps have been taken to improve the technology base, especially on the anti-fraud side, but the fact that the architecture is flawed and investment spread across multiple platforms that were designed for OBP, fraud, live, and on demand piracy means that it is unlikely to keep up with newer entrants to the space.
I, therefore, anticipate the customer base shrinking over time as clients follow big players such as Johnson & Johnson, Adobe and Facebook to other vendors and with reduced spend and significantly reduced market knowledge in Sales and Marketing, I see it unlikely that new customers will join in enough volume to make up for this.
Corporation Service Company dominates the Corporate Domain Management sector, and when they purchased NetNames in 2016, who in turn had acquired Envision, an early leader in the OBP space many years previously, one would have expected them to rival then market-leader MarkMonitor with the combination of a large domain-oriented base and a strong and broad OBP offering to cross-sell into it.
They were successful in this for a period, but once the accountants realized how much technology investment is required for OBP in comparison to domain management, cost control combined with a historically weak marketing and sales effort has taken its toll. Although they have a compelling value proposition with domain management and OBP under one roof, they have not really sought to grow the OBP business and seem happy to milk their base for upsell and additional domain-related services such as SSL certificates and DNS services.
This means that their customer base has been a fruitful place for more active and technologically advanced vendors to feast, and many of the legacy clients have departed to the market leaders and challengers identified previously.
Today, it is hard to see why anyone other than a very committed CSC domain customer with the most basic OBP needs would choose this solution set, and I can only see the customer set continuing to shrink over time.
3PM Solutions offers a very different proposition to any of the vendors we have discussed so far, focusing entirely on a technological means to detect, analyze and confirm infringing content using computer vision and artificial intelligence without human intervention.
The ability to do this comes from a background in high-frequency trading, where technology, infrastructure, data and speed separate the best firms. With this approach, 3PM spent the last ten years investing in infrastructure, MLOps and technology to analyze images and text very fast.
This means that they can achieve greater accuracy, with far more rapid detection and at scale, without the impact on cost to their customers that a bloated services team and its attendant management and other related expenditure brings. For example, working with one of the world’s largest marketplaces, they have analyzed over 300 million listings in a month and identified counterfeits with 99% or better accuracy.
To be clear, they are not a full-service OBP vendor but can provide an unparalleled solution for marketplaces or larger corporates who need to deal with very high volumes of abuse. Today they work across a narrow set of platforms, but that is purely because of their current clients’ requirements - the technology is sufficiently flexible to be suitable for much broader use cases.
The relevance of 3PM is that they solve the most troublesome aspect of OBP, accurate detection without false positives, quickly, cost-effectively, and at scale, and so, in conjunction with other services, they could provide a highly cost-effective solution for a larger end-user or platform.
David Cooper, who founded IPSecure, is a former colleague and fellow veteran of the industry. He had become tired of working with generalist platforms that did many things well enough but nothing brilliantly.
He, therefore, has focused on building a solution for the dominant ecommerce platform in the Western World, Amazon and one that focuses on revenue recovery (other vendors use this as a catchphrase, but, without focus, it is not achievable) such that measurable benefits can be delivered.
The way Amazon is structured makes it very hard for a consumer to discern exactly where they are buying - each ASIN (individual product) has a single set of images and description but several offers from prospective sellers, so brand and rights owners are mixed in with their authorized resellers and fraudsters selling counterfeit versions. Who wins the “buy box” determines how an order is fulfilled, which is why eliminating illicit offers can have such a direct impact on revenue from the genuine item.
IP secure allows the user to build a set of rules for determining likely good/bad sellers and offers. This includes over a dozen parameters, such as price variance, location, shipping cost and duration, win rate, and negative review percentage, such that a health score can be determined for a given brand owner by ASIN, and this can be used purely as business intelligence or as a basis for action such as enforcement.
A huge amount of business intelligence can be reaped from the service so that rights owners can easily see which items are most threatened and where infringers overlap their legitimate supply chain—it is even possible to find new distribution opportunities by identifying locations or sectors of one’s business where genuine sellers are not present but illicit sales are booming!
IPSecure is a pure SAAS technology provider delivering a platform through which users or their agents can monitor and manage their Amazon business. For brand owners who are looking for a fully serviced solution, IPSecure is white-labeling the solution through marketing agencies and Amazon aggregators.
This Cologne-based vendor has been in the industry for more than a decade but has mainly focused on winning and retaining clients in the DACH area, with companies such as Audi and Stihl using them on a global basis.
They offer the full range of OBP solutions from anti-counterfeiting on marketplaces to social media, app monitoring and channel compliance. Their focus is on providing a customized solution based on technology but with a strong emphasis on service and client retention, many of their customers having been with them for many years.
They actually undertake a lot of thought leadership marketing, largely based on a blog written by their CEO, Oliver Guimaraes, with some well-constructed content such as this piece on the Digital Services Act https://globaleyez.net/a-new-era-for-digital-services-in-europe/.
This is promoted via LinkedIn and Electronic Direct Mail and appears to be their primary source of new business, along with referrals, but the focus is mainly on steady growth and client retention, which is the reason they remain in this category; without, it would seem, any great desire to risk profitability by investing in a broader expansion program.
Headquartered in Luxembourg, eBrand badges itself as a “European expert for brand protection on the internet,” and the majority of its client base is indeed in Northern Europe.
In theory, they offer one of the most complete solution sets from domain management through all the main OBP solutions to anti-fraud but are most well known for the first of these, where they have been working with end users and law firms for several years. They now seem keen to push on by extending their reach with full service across their client base and the market.
What they now need to do is up their visibility in the OBP space and secure some lighthouse customers that will prove their technology and service are suitable for enterprise level usage. If they want to operate beyond Northern Europe, they will need to build an expansion plan to extend their sales and marketing reach.
Beyond that, taking the business global would require a whole new level of investment and build out if they wish to compete with the market leaders and challengers.
This Swedish player comes from a trademark and web hosting background, offering a full suite of services from trademark clearance, registration and monitoring as well as domain management, web hosting and some degree of digital security, which includes aspects of OBP.
They also claim to provide some cyber security solutions that would protect clients from DDOS and other infosec threats such as cyber attacks.
Similar to eBrand, their identified customers are mainly regional and at the SME end of the spectrum—essentially a selection of smaller Scandinavian brands, and they claim to be Sweden’s largest web hosting provider.
Whether you are an end user or a potential investor, the above list shows just how crowded this market has become, and I am sure there are others that I am less well acquainted with.
This makes vendor selection challenging as most players make similar claims which are hard to verify easily: “best technology,” “machine learning,” “artificial intelligence,” and “broad coverage” are terms you will hear from many players and, in my opinion, demos do little to help as they are so easily prepped to make a solution look easy to use, and statistics such as compliance rate or volume of takedowns can be very misleading.
If I were selecting a vendor as an end user, the most important factor would be reference customers—look for other clients of similar scale in the same vertical and get a list to choose from (every provider has a couple of “pet” customers), then go talk to them in detail about what they like and what could be improved in the service.
For investors, please take a look at my article written in 2021, as it is as valid then as when it was written.
What is clear, overall, is that this continues to be a fast-growing sector, with many clients’ needs still unmet, so we can look forward to an exciting period ahead and, most likely, yet more market consolidation.
If you would like further commentary or help with the topic, feel free to reach out to me via LinkedIn or [email protected]
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