Brand loyalty is the Holy Grail of marketing. It creates a world of consumer allegiance that encourages repeat buying of favorite products and services, and it casts loyalists as willing brand evangelists who proudly don logos and spread passionate word of mouth to all within earshot. Luxury brands in particular are precious entities that are estimated to have billions of dollars in value, thanks in part to brand loyal customers. Millward Brown, for example, has valued the Louis Vuitton brand at $22.6 billion. But what happens when a brand, regardless of stature, is breached or abused?

With the power of social media/Web 2.0, companies are exposed to a multitude of online threats that have the potential to impact corporate reputation. These threats could include broken links that lead to lost revenue; porn sites that use misspelled keywords to pull customers away from a legitimate site; and the rise of Blogstorms that are often the tipping point to a damaged reputation. In fact, it is estimated that 4 percent of all brand mentions online are associated with traffic diversion or misrepresentation schemes; and an estimated 7 percent of the world’s GDP is related to the sale of counterfeit goods—a high proportion of which is sold through online auctions.

Whether intentionally malicious or innocuous in nature, any exposure to an online threat can impact corporate reputation and ultimately affect revenue, profitability and brand loyalty. It’s no surprise then that even Gartner has identified reputation as one of the biggest threat to enterprises in 2008. The bottom line is that retailers and brand owners need to make it a priority to protect themselves from the online threats that quickly erode precious brand equity and corporate reputations. That means taking the time to understand which threats could impact their business (and there are more than one might realize), making it a priority to continuously monitor for potential breaches, analyzing and measuring the magnitude of each threat, and taking the appropriate actions to mitigate them.

Kevin Joy is vice president of BrandProtect.

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“It’s hard to know where to spend your money.” This is a quote from Mat Zucker at Agency.com, an Omnicom Shop from Adweek.

I circled that quote three times over because it optimized the confusion and quandary most agencies have today. They really don’t know. They are not sure whether they should ethically advise their clients to shift major budget to the web or protect their existing bread and butter in print and TV. They don’t know whether to build a microsite, re-build the existing corporate site or build landing pages within social networks like Facebook. They simply are more confused, conflicted and truthfully unable to make good strategic recommendations going forward. So, they guess and pontificate and recommend using old school “push” methods and creative mentality that does not work on the web, costing corporations billions in lost marketing dollars.

There is no reason for confusion. It just takes a little guts to do something new for your client, or if you are the client, new for your company. Find out what your target audience does, where they go, what they like and then use those channels and information to market to them.

Aaron Kahlow is managing partner of BusinessOnLine and chairman of the Online Marketing Summit. He is a regular columnist for Electronic Retailer magazine.

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