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Security and Internet Trends

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Security and Internet Trends

  1. 1. Trends: Since April 1995, my Web Digest For Marketers email newsletter has been analyzing and reporting on the meaningful trends in Internet Marketing. It was the very first marketing newsletter on the Net. Publishing this newsletter for a decade has taught my editors and me how to spot meaningful shifts in Internet Marketing worthy of your attention. Below are my Top 10 Trends for the Next 10 Years in Internet Marketing. It deserves your attention because it will help you map your future in this dynamic Internet Marketing industry. Going forward in time from here, I recommend you stay on top of breaking trends and shifts in Internet Marketing by subscribing free to my Web Digest For Marketers weekly email newsletter at http://wdfm.com Trend #1 - Pay Per Call Rings In Any salesperson worth his or her salt knows that a call is worth many times more than a click. Having 1-to-1 contact with a prospect live on the phone is so much more likely to result in a sale. Some say the likelihood is ten- fold. So it's no wonder this nascent industry has many people watching closely. There will be issues with "fake" phone calls that will be reminiscent of click fraud problems today. But look for the pay-per-call industry to catch on fire within the next 1 1/2 years, despite these concerns. I am devoting an entire issue of Web Digest For Marketers to the subject of Pay Per Call later this year. Trend #2 - Feed Marketing Flourishes
  2. 2. You've got RSS (Real Simple Syndication). You've got Podcasting (where you can download and time-shift audio content to your iPod or MP3 player). Now you've even got Video Podcasting where you can download MP4 videos into Sony's PlayStation Portable unit for viewing when you're mobile. As the use of RSS grows quickly, and more consumers buy iPods or MP3 players, these formats will grow in usage. And where there are ears and especially eyeballs, marketers are never too far behind. The podcasts may employ the sponsorship model, or subscription (further off), or simply be done for the coolness factor, customer retention, or PR pop that you'll get if you do it early enough. RSS ad units will settle into some format that offers a decent ROI for the advertiser. There are already coupons being fed via RSS. Expect to see more point-to-point syndication feed models as we move forward in time. Get Larry Chase's "Essential Search Engine Marketing Resource Guide" as a bonus when you subscribe free to Web Digest For Marketers. Trend #3 - Email Marketing Will Survive Spam issues will recede dramatically, because they have to. Too much is at stake. We may resort to the payment of email postage for guaranteed delivery, or maybe not. But the email platform is now like a fax machine. While there are fancier applications, email is easy, cheap, effective and everywhere. Trend #4 - Personal Agents Propogate
  3. 3. Watch for the growth of "agent software" to help you sift through the morass of online information. There's too much relevant stuff for mere humans to sift through now. Agent software learns your habits by following your moves online and on your computer as well as by asking about your preferences. Some early forms of this exist now, but it will become much more sophisticated. Your agent will bring you both B2B and B2C offerings, whether the latest on-target ad deal or the best tennis racket at the best price. Trend #5 - Reverb Marketing, In Stereo eMarketer points out that many Internet users already use multiple forms of media at once. Even as I write this I'm listening to CNBC in the background. Smart marketers will synchronize their messaging so the end user hears and sees complementary messages at or near the same time. This will be the new definition of what media planners call "Road Blocking." Since the end user's attention is split between different media, it will be essential that messages reinforce each other. HINT: Visual gags on TV spots or simply showing the 800 number on screen won't be as effective, because a significant segment of people won't be watching the screen. Even today we're starting to use TV like radio. Trend #6 - Audio Blogs/Video Blogs (V-Blogs) Blogs are obviously here to stay. Some of the cutting-edge blogs are starting to offer content in audio and even in video. This will not only affect
  4. 4. journalism, but it will impact the retail business as well. Imagine a personality-driven QVC blog on your computer screen. Trend #7 - IPTV Adds Interactivity Microsoft and others are currently exploring TV over Internet protocol. But don't expect TV on the Net to look and act like the TV you see on your television screen. After all, we already have television, so who needs the redundancy? IPTV (or as some say TVIP) will take a different twist. While Madison Avenue types will say, "At last, we can now feed TV commercials over the Net!", consumers will not want to see those ads on their computer screens. They already TIVO over on them on their TV screens, right? IPTV will be much more interactive. In addition to an 800 number, with IPTV you'll be able to click and buy right then and there. One form might be a video catalog wherein you click on the product or infomercial of interest. To really make this happen, compression schemes will need to get better in order to prevent buffering at the consumer end. Trend #8 - Commercial Content On Demand Messages from marketers need to be so appealing that the audience actually requests the message. This evolutionary process is already underway as "push marketing" is giving way to "pull marketing". The costs of paper, postage, TV and print production are getting too expensive and are not performing as well as they used to. Commercial content that the end user wants isn't far-fetched. Look at Lucky magazine or niche catalogs such as Outdoor Adventure Sports. B2B marketers have been using high- value ads for years. The advertisers in Web Digest For Marketers generate
  5. 5. sales leads by offering high-value PDF downloads on subjects of particular interest to the target audience they're trying to reach. The how-to workshops at Home Depot are a prime example on the B2C side. It doesn't take a seer to see that the days of "hot air advertising" are so over. Trend #9 - Publishing Faces Tectonic Shifts Research is already showing that many people in their 20s are not picking up the newspaper habit the way their parents did. Add to this demographic shift the cost of newsprint, postage (for magazines) and handling, and it's likely to cause tectonic shifts in the publishing industry. Many people already read newspapers and magazines online. My bet is that special issues will appear in print, and that many publishers will ultimately have to figure out how to make a go of it with free content online (i.e., advertiser- supported), perhaps by asking their readers for demographic information that enables the publisher to sell targeted advertisements at a premium, as you'll frequently find with trade publications. At the same time, in select industries people will pay for online subscriptions that deliver real value. This is already apparent (the Wall Street Journal has 700,000 paid subscribers), but it's not for every content provider out there. For a look at the next level, check out www.cnbcdowjones.com, where you can get just the editorial clips of CNBC, sans commercials, for $99(US) a year. You get 250 plays per month. I subscribe, and find it to be a great time saver. Trend #10 - Direct Marketers Will Take Over the Internet Oops, this has already happened, but not the way I predicted 10 years ago. There are two types of direct marketers on the Net. Those who
  6. 6. started out as online marketers have come across the language and practices of DM without realizing it. They talk of response rates by way of clickthroughs, cost per lead, cost per sale, and so on. This group would do well to study the DM masters who have written extensively on the subject over the past 80 years. Then there are the traditional direct marketers, some of whom get it, and some of whom are still riveted on the shriveling response rates of print mailings and catalogs and on ever-increasing postage costs. The irony here is that traditional direct marketing folks are the ones who understand human nature best. Because of their extensive experience, they can smell what will work and what won't. It's baked into their genes now. This group would do well to look at the Net as the incredible opportunity it is, rather than focusing on what was. What was is not coming back. The good news for traditional DM'ers is that the Internet has not repealed the laws of human nature. So while the tools of DM are changing, the underlying principles that have driven DM since the time of Ben Franklin are still exactly the same. Bonus Trend - Internet-Free Zones Become the Hot New Trend The Internet will become as ubiquitous as cell phones are today. Some enterprising travel package company will then begin offering "Internet-free zones" - no cell phones, no Internet, no fax machines, and you won't have to climb the Himalayas to escape the media onslaught. This won't be an option for many people. It seems already that people desperately need to stay connected to others, lest they connect with themselves. :) LC
  7. 7. Part TWO Subscribe to the AAFTEC Newsletter, Focus on Fraud 2005 Fraud Trends: Consumers Being Hounded by Internet and Telemarketing Scams WASHINGTON, D.C.—Today the National Consumers League (NCL) released its annual lists of the top telemarketing and Internet scams that plagued consumers in 2005. More consumers are reporting scams, and victims are losing more money, according to the nonprofit organization, which is headquartered in Washington, DC. Based on information that consumers provided last year to NCL’s National Fraud Information Center/Internet Fraud Watch program, the average loss to telemarketing fraud rose from $1,974 in 2004 to $2,892 in 2005, and Internet fraud losses more than doubled, from an average of $895 in 2004 to $1,917. The number of scams reported rose by 39 percent for telemarketing fraud and 12 percent for Internet fraud. Read More>>> October is National Cyber Security Awareness Month: ID Thieves Preying on Consumers with New Phishing Scam Called Pharming
  8. 8. Washington, DC—In observance of National Cyber Security Awareness Month in October, the National Consumers League (NCL) and the National Cyber Security Alliance (NCSA) have partnered to warn consumers about new computer-based scams threatening their bank accounts and other sensitive personal information. The Washington-based advocates are focusing their efforts on how consumers can protect themselves from the evolving tactics that are used for online “phishing” scams. Phishing is when ID thieves trick people into providing their social security numbers, financial account numbers, PIN numbers, mothers’ maiden names, and other personal information. Read More>>> NCL Provides Consumers with Tips to Tell a Reliable Medicare Drug Plan Resource 10.06.2005 Since legitimate marketing for the federal program began last week, consumers across the nation are becoming aware that, starting in January 2006, Medicare will begin to offer coverage for prescription drugs. As prescription drug plans, consumer and health advocates, industry, and the government begin to send information about the new drug benefit out to the public, people in Medicare will need to know how to tell if they are dealing with a reliable resource. Read More>>> NCL News: Phishing Scams Rank in Top Ten Telemarketing and Internet Scams in 2004 2.03.2005 Today the National Consumers League released its annual lists of top frauds as reported by consumers to its National Fraud Information
  9. 9. Center/Internet Fraud Watch with alarming increases in the average losses of victims reporting the scams in both telemarketing and Internet fraud. And for the first time ever, phishing scams appeared in both top ten lists. Read More>>> The Medicare Prescription Drug Discount Card: Separating the Real Deal from the Scams 12.2004 For months now, Americans on Medicare have been able to sign up for prescription drug discount cards, a part of the Medicare prescription drug law that was passed this time last year. Unfortunately, only about 1.5 million low-income Americans have signed up for a card. More than three times that many had been expected to enroll in the program by year’s end, and more than 7 million people are eligible Washington, DC—Identity thieves are using a new scheme dubbed “phishing” to trick people into providing their Social Security numbers, financial account numbers, passwords, PIN numbers, and other personal information, and anyone with a telephone or email can be a victim, warns the National Consumers League. This method of ID theft is now the fourth most common Internet scam. A new Web site www.phishinginfo.org, describes how phishing works, how people can protect themselves, and where to go for help if they’ve been “hooked” by a phishing scam. Read More>>> New Tips at Fraud.org
  10. 10. Advocacy Group Warns that More and More Consumers Falling for Fake Check Scams 8.11.2004 Washington, DC—The National Consumers League, the nation’s oldest consumer advocacy organization, has partnered with the American Bankers Association (ABA) to alert the public to the growing problem of fake check scams. Based on complaints reported to NCL’s National Fraud Information Center/Internet Fraud Watch database since last December, when the fake check category was added, these scams are now the seventh most common Internet fraud. Consumers who reported fake check scams to NCL’s fraud programs between January 1 and June 30, 2004 lost an average of $5,000. In many cases, the contact is initiated by email. BBB Warns that Imposters are Targeting Consumers and Businesses 8.2.2004 The Better Business Bureau system today issued a national alert to warn consumers and businesses about two questionable operations that are falsely using the BBB name to trick victims. One business is perpetrating an advance fee loan scam that targets consumers and businesses with poor credit records. It has provided as a reference fictitious BBB phone numbers that are answered by representatives who falsely claim to be with
  11. 11. the Better Business Bureau and provide a positive report on the business in question. Read More >>> Consumer Group Says Americans Vulnerable to, Unaware of Counterfeit Drugs 6.21.04 The National Consumers League (NCL) announced today its concerns for American consumers’ vulnerability to counterfeit drugs, a growing problem given the recent rise in government investigations, the explosion of Internet sales of prescription drugs, and new survey results that demonstrate consumers’ inability to identify suspect drugs. Relay services were designed to help people with hearing or speech difficulties use the telephone. Now there is a new way to make relay calls – through the Internet. While Internet relay services are very convenient for many hearing or speech-impaired people, some enterprising con artists are also taking advantage of them to contact potential victims. Read More >>> First “Do Not Call” Case Announced 5.5.04 If you’ve received a call from the National Consumer Council (NCC) offering to help you with your debts, you’re not alone. Those calls may stop now that the Federal Trade Commission (FTC) has sued the NCC and related corporations and individuals for allegedly violating consumers’ “do
  12. 12. not call” rights and deceiving them about the organization and the services it offers. Read More >>> First CAN-SPAM Cases Brought 4.29.04 On April 29, 2004 the Federal Trade Commission, U.S. Department of Justice, and Postal Inspection Service announced action against two spam operations under the CAN-SPAM Act, which went into effect on January 1. POINT THREE Identity theft continues to be the top fraud-related complaint, according to government statistics released Tuesday by the Federal Trade Commission. The total number of complaints rose 17%, from 542,378 in 2003 to 635,173 in 2004, according to the report, National And State Trends In Fraud And Identity Theft. According to the report, 39% of all complaints filed in 2004 were related to identity theft, which is a 1% decline from 2003.
  13. 13. Another top fraud-related complaint was Internet auctions, which garnered 16% of the total number of complaints filed last year. Others include shop- at-home/catalog sales (8%), Internet services and computer complaints (6%), and foreign money offers (6%). Credit-card fraud topped the list at 28% as the most common type of identity theft, followed by phone and utility related fraud (19%), bank fraud (18%), and employment fraud (13%). The FTC says consumers reported total fraudulent losses of $547 million last year, with the median loss at $259. POINT FOUR Identity theft topped the list of consumer complaints filed with the Federal Trade Commission for the fourth year in a row, according to data released today by the agency. The FTC reported that Internet-related fraud accounted for 55 percent of the consumer fraud complaints filed in 2003, up from 45 percent in 2002. The data was released in the commission's annual list of the top 10 consumer complaints. _ Top Fraud Complaints in 2003 _ • Identity theft • Internet auctions • Shop-at-home/catalog sales
  14. 14. • Internet services and computer complaints • Prizes, sweepstakes and lotteries • Foreign money offers • Advance fee loans and credit protection • Telephone services • Business opportunities and work-at-home plans • Magazine buyers clubs • Office supplies and services Source: Federal Trade Commission Internet fraud cost American consumers almost $200 million in 2003, with victims losing $195 on average. The total loss to fraud was more than $437 million, about $228 per victim. The commission said it received 516,740 complaints in 2003, an increase from 404,000 in 2002. There were 214,905 reported cases of identify theft, about 42 percent of the total. This was an increase from 161,836 complaints reported in 2002. Various kinds of fraud, from credit protection schemes to the infamous Nigerian e-mail hoaxes, resulted in 301,835 complaints. Fifty-eight percent of the victims said that the fraud originated in some form of contact made through the Internet.
  15. 15. "The truth is that the crooks are staying at least one step ahead of the victims online," said Jean Ann Fox, director of consumer protection for the Consumer Federation of America. Auctions produced the largest number of Internet-related fraud complaints, accounting for 48 percent of the total. Despite that figure, many people have trouble figuring out at what point they surrendered their information to online criminals. Fraud is involved in less than 1 percent of eBay's auction listings, of which 20 million are listed at any given time, said EBay spokesman Hani Durzy. The nation's largest online auction company teaches its users how to spot bogus or suspicious auctioneers and avoid e-mail scams that trick users into divulging their financial information, Durzy said. EBay also offers up to $500 in reimbursements for eBay customers victimized by fraud through the auction giant's PayPal service. Susan Grant, director of the National Consumer League's National Fraud Information center and Internet Fraud Watch, said many consumers are less suspicious of sales pitches on the Web than they are of telemarketers peddling dubious products. "I do think that we've done a lot of public education about telemarketing fraud and people are generally prepared when they pick up the phone to recognize the danger signs, but I think that that same caution and common sense hasn't exactly taken hold yet for Internet users," Grant said.
  16. 16. Howard Beales, director of the FTC's Bureau of Consumer Protection, said that more people are reporting fraud and identity theft incidents, driving up the number of cases the FTC released today. The Washington, D.C. area led the list of U.S. locations reporting consumer fraud, beating out the Seattle and San Diego metropolitan areas. The Phoenix-Mesa, Ariz., region produced the largest number of identity theft cases. The FTC's data was based on information it collected in its Consumer Sentinel database, which receives reports from the FBI's Internet Crime Complaint Center, the U.S. Postal Inspection Service, the National Consumers League's National Fraud Information Center, Canada's Phonebusters and the Better Business Bureau. Today's findings reflect an increase in attention that the Bush administration and Congress have given to online fraud and identity theft. The FTC in a report released in September 2003 estimated that 9.9 million Americans were victims of identity theft in 2002, costing consumers almost $53 billion. As many as 27.3 millions were struck by identity theft in the past five years, the commission also concluded. As many as 7 million U.S. adults might have been identity theft victims between June 2002 and June 2003, according to business research group Gartner Inc.
  17. 17. The Justice Department's "Operation E-Con" against Internet fraud netted 135 charges or convictions between January and May last year. The operation involved more than 90 cases and 89,000 potential victims. Congress late last year passed a bill that allows people to report identity theft to a national hotline. It also allows consumers to get one free credit report a year from the nation's major credit bureaus to make sure that they have not become identity theft victims. POINT FIVE Related to this topic > VeriSign signs up eBay, Yahoo to identity program > Google leads robust U.S. Internet search growth > Fresh U.S. outrage ahead of China Internet hearings > Fraunhofer develops tool to curb online music piracy > Gmail becomes a Google Talk interface News Story by Juan Carlos Perez FEBRUARY 17, 2005 (IDG NEWS SERVICE) - As con artists lurk in the dark corners of online auction marketplaces scamming buyers, auction sites are having to deal with the persistent specter of fraud, which some believe is seriously harming buyer participation and sales in this very popular and large e-commerce medium.
  18. 18. In January, a coalition of eBay Inc. sellers warned that, in their view, fraud is eroding the integrity of that marketplace and challenged eBay to implement concrete measures to address the issue. "The members of this organization feel this is the No. 1 issue that is impacting their business and their ability to grow on the eBay marketplace," said Jonathan Garriss, executive director of the Professional eBay Sellers Alliance (PESA), which groups about 600 large eBay sellers that collectively generate over 70 million eBay transactions and $1 billion in eBay gross merchandise volume annually. Meanwhile, the U.S. government has also identified fraud in online auctions as a real problem. On Feb. 1, the U.S. Federal Trade Commission (FTC) in its "National and State Trends in Fraud & Identity Theft" study for 2004, reported that online-auction fraud last year made up 16% of all consumer complaints, or about 100,000, second only to identity theft with 39%. In the subset of Internet-related complaints, online auction fraud topped the list with 48%. Fraud in online auctions can take a variety of forms. Most commonly, buyers may pay for an item but not receive it, or receive an item that doesn't match the description of the one advertised by the seller. However, some buyers also commit fraud by not paying for goods or by lying about not receiving merchandise. "Most of the complaints are basically about someone offering to sell something and then the consumer will send payment and never receive the item," said Deborah Matties, a staff attorney at the FTC.
  19. 19. EBay, by far the largest online auction marketplace, estimates that only around 1 in 10,000 of its transactions are proved fraudulent, but PESA argues that, even if fraud is rare, incidents get wide media coverage and are likely to discourage many potential buyers from participating in online auctions. Garriss believes the fraud problem is partly to blame for eBay's slower growth in 2004 compared with 2003 in areas such as listings, consolidated net revenue and gross merchandise volume. This slower growth and eBay's missed earnings expectations in 2004's fourth quarter drove eBay's stock price down after its fourth-quarter 2004 financial report. The day after the report, eBay's stock closed at $83.33, from the previous day's $103.05 close. Since then it hasn't reached $90. "We do think there is room for improvement on making the eBay auction marketplace a safer environment for shoppers," said Garriss, CEO of Gotham City Online, a shoes and accessories seller on eBay. Specifically, PESA would like eBay to be more stringent in screening sellers who are new to the marketplace and want to sell either very expensive merchandise or sell in large volumes. PESA suggests possibly putting restrictions on these buyers until their identity has been thoroughly checked out and they have established a good track record in the marketplace. But placing limits on sellers who haven't acted improperly is something eBay will not entertain, said Hani Durzy, an eBay spokesman. "While we respect the opinion of all community members, we will not engage in any
  20. 20. screening before any wrongdoing has occurred. All the people in [PESA] at one point started off as brand-new sellers as well. Had seller screening been in place where sellers would be severely limited if they hadn't sold anything before, everybody in [PESA] would have been affected at one point as well," he said. Durzy said eBay has implemented many tools and information for buyers and sellers to educate themselves about the best way to conduct themselves during an auction. For example, all eBay buyers and sellers are evaluated by the peers they do business with, so everyone has a ranking and anyone can read soneone else's feedback trail. If there are problems, eBay has a section of its Web site called Security Center where members can lodge complaints and bring eBay in as a mediator. Beau Brendler, director of Consumer Reports WebWatch, the online investigative arm of Consumer Reports, says reputable online auction sites such as eBay are trying to do a lot to prevent and combat fraud, but there is only so much they can do within the reality of an auction environment, where the presiding principle generally is "buyer beware." "Online auctions are perfect venues for fraud in the same ways that off-line auctions are," Brendler said. Some common-sense practices buyers are urged to follow include: * Pay only with a credit card or via eBay's PayPal service; avoid sending checks, cash or money orders, or wiring money.
  21. 21. * If purchasing an expensive item, use an escrow service, because they acknowledge receipt of your payment but don't release the funds to the seller until you confirm receiving the item in good condition. * If using an escrow service, make sure it is a reputable one. * Check the feedback others have left about the seller, a common feature on sites such as eBay. * Look for listings with clear details and pictures of the item. * If the deal sounds too good to be true, it probably is: walk away. Still, there is a tipping point at which a critical mass of users can sour on an online auction marketplace, an executive warns. This is why online auction sites have to be as vigilant and aggressive as possible, said Patrick Byrne, chairman and president of e-commerce provider Overstock.com, which launched its online auction business, Overstock.com Auctions, in September and has seen it grow steadily. "Fraud is like a weed. Once you have too much of it in the marketplace, then you don't know who to trust anymore. The whole thing starts getting very shaky," Byrne said.

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