By Christine Kern, contributing writer
Unauthorized ads on retailers’ sites could cost up to $2.1 billion in sales this holiday season.
Retailers could lost up to $2.1 billion this holiday season to unauthorized ads on retailers’ e-commerce sites, according to a report from Namogoo, a company whose software is aimed at protecting sites from such incidents. This disruption of the customer session is known as online journey hijacking, and it could have serious consequences for retailers.
Online journey hacking is growing into a serious challenge for retailers. "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." The most significant impact of the disruption is that retailers could lose customers and sales through compromised experiences. When users feel that they can no longer trust ads on a particular site, they will abandon that site.
For the report, Namogoo analyzed 500 web pages from major ecommerce sites and discovered that 15 to 25 percent of all customer sessions were exposed to unauthorized ads. During peak shopping season, that number jumps to 20 to 30 percent of all session. Additionally, 80 percent of the unauthorized ads were competitive product ads that directed shoppers directly to the retailers’ competitors.
“Amazon isn’t the only threat to retailers this holiday season. Online journey hijacking is a serious issue for online retailers, not just from a revenue standpoint but also in terms of brand experience and loyalty,” said Chemi Katz, co-founder and CEO of Namogoo. “The amount of lost revenue resulting from such tactics is astronomical and can be devastating, particularly at such a pivotal shopping time as the holiday rush.”
The report suggests that just as online retailers are investing time and money in making their websites as profitable and engaging as possible, the malware developers are upping their game to optimize ads for more clicks and revenue by appropriating their competitors’ customers.