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The Agile Brand with Greg Kihlström®: Expert Mode Marketing Technology, AI, & CX
#846: Red Points' Daniel Shapiro on brand protection in a deepfake world
00:28:14
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In an age of AI powered deepfakes and sophisticated counterfeits, is your brand's core identity becoming more of a liability than an asset? Online agility requires moving beyond just building a brand to actively and continuously protecting its integrity. In a digital landscape where threats evolve at the speed of AI, this isn't just a defensive tactic. It's a core component of maintaining customer trust and lifetime value. Today, we're going to talk about the often overlooked alternative other side of brand building brand protection. In our rush to create amazing customer experiences and leverage new technologies, we're also creating new vulnerabilities for counterfeiters, impersonators and fraudsters to exploit, ultimately eroding the trust and lifetime value we worked so hard to build.
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Welcome to season eight of the Agile Brand Podcast. This season we're going all in on Expert Mode, MarTech, AI and Customer Experience, talking with the people and platforms behind the brands you know and love. Again, I'm your host Greg Kilstrom and I help Fortune 1000 companies make sense of martech, AI and marketing ops. Hit, subscribe or follow to make sure you always get the latest episodes and leave us a rating so others can find us as well. And make sure you check out our sponsor, TechSystems, an industry leader in full stack technology services, talent services and real world adoption. For more information, go to techsystems.com now let's dive in. To help me discuss this topic, I'd
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like to welcome Daniel Shapiro, SVP of Brand Relationships and Strategic Partnerships at redpoint.
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Daniel, welcome to the show.
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Hey Greg, thanks for having me. I'm super excited to join you today.
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B
Yeah, looking forward to this conversation.
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And as I said, it's not talked about as frequently as some other things and yet critically important. So looking forward to to talk about this. Before we do though, why don't we. Why don't you give a little background on yourself and your role at redpoints?
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C
Sure. So as as the Senior Vice President of Brand relations and Strategic partnerships, I work a lot with brands to help them protect their identity in this digital age. And our goal of course, is to help maintain their customer trust with their brands and safeguarding the brands against counterfeiters. We have fraudsters out there, impersonations and in addition I spend a lot of time working directly with marketplaces. Amazon's, ebay's, Alibaba's social media platforms, Meta, Instagram, Facebook, Twitter, TikTok, making sure that of the volume because we take down a lot of infringing listings and we drive a lot of volume to those marketplaces. And to be able to make sure they can consume that in a way that's efficient and fast, really important to our brands. And in my role, I've had the privilege and the honor to have testified before the United States Senate Judiciary Committee. Their subcommittee on intellectual property regarding this Safe Shop act always twists me up a little bit there. And I've had the opportunity to testify at the US China Economic Security Commission before. And that's been great experiences. And before I did all that, I worked for eBay for eight years and I helped ebay create their first ever brand protection team to disrupt worldwide the counterfeit problem that was occurring. So I've been in this funny space now for about 16 years.
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Yeah, yeah.
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And it definitely sounds like I'm talking to the right person about this too. So, yeah, looking forward to diving in. So we're going to start with just kind of start at the strategic level and talk about just why brand protection is so important. And you know, I think as with it kind of just reminds me of like the insurer, to use a metaphor, like insurance is, you know, less thought of like you need it when you need it. But, you know, the C suite histor historically viewed brand protection as kind of a purely legal or an IP kind of a defensive issue as, as marketing leaders become the primary stewards of customer trust and experience, how are you seeing their role in this conversation, you know, evolve from something that might be considered a cost center concern to a strategic growth driver?
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Yeah, really great question, because you're absolutely right. I mean, traditionally it's always been an IP legal matter. And I think that's primarily because the IP lawyers or general counsels or patent attorneys, they own the responsibility for filing the trademarks, the utility patents, the design patents for a brand. And because it's so costly to file those all over the globe, they tend to be the guys that protect people from taking advantage of those intellectual property or trademarks, et cetera. And so that's why I think it's always been there. But to your point, we do see the marketing leaders taking an increasingly more active role when it comes to this brand protection. I think what you said was true, which is because of the trust and experience and protecting that lifetime value of the customer. It's really critical. I was looking at at some of our data related to marketing before I joined you, and we have about 1300 customers that we represent all over the globe. And I was shocked actually when I looked up the data from our own internal factor, but about almost 40% of our customer contacts that we have at brands have a nexus to marketing. It may not be exactly the cmo, but certainly leaders in the marketing department are a part of this strategic execution of brand protection. So I think that's really important. And I, and I think the driving factor is that customer trust, that brand reputation, managing, you know, potential negative reviews that come out of buying counterfeits or consumer harm. I think about sometimes a brand might have cosmetics or baby goods and when those fail or blister your skin or, you know, small parts come off in your child's mouth. Those things are really critical to brand integrity. And I think that's why marketing people are stepping up and saying, look, we need to manage this, this, these outcomes. And that strategic evolution, I think is really important to recognizing that in enhancing this customer journey and managing the brand protection and the daily influences of the goods and the bads of that are really, really important for the marketing teams today.
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Yeah, yeah.
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Because to your point, those marketing leaders, they're investing, you know, millions and millions of dollars. And we talk a lot on the show about creating that consistent omnichannel, customer experience, personalization, all of those types of things. And yet, you know, a single instance of one of the, you know, scenarios you mentioned, you know, customer buying a counterfeit product and having a bad experience, you know, what, what are the long term consequences for brand equity from, from that persp.
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Right. And those millions of dollars that it takes to build that brand are at risk all the time. Because as you mentioned, the single instance of counterfeits can have a very big impact on your customer business. And I think today, whether it is fake social media ads or whether it's fake product on a marketplace or fake websites, it's coming at the brand from all areas of the business of this e commerce channel that we talk about and protecting it become extremely critical. I think that we did a survey last year of about 2,000 consumers in the US who either intentionally or unintentionally bought a counterfeit. And when we asked the people specifically, those who unintentionally ended up with a counterfeit, who do you hold responsible and would you continue to buy from the brand? 29% said they actually think the brand's fault, it's the brand's fault that they bought a counterfeit and they would no longer buy from that brand because of that. And it makes me think when you ask that question, which is, can you imagine a marketing team learning that a counterfeit impact could cause 30% of your consumer base not to come back? Now, granted, they Bought the counterfeit, hoping it was the real one, but nonetheless they are your, they are, they were your consumer. But because of that bad experience, they say we're out. You know, it's a, it's a real, it's a real impact. And that long term impact on a brand's reputation can be significant. And I think that's sort of what that, you know, survey we did brought to light for us.
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Yeah, yeah. And then to combat this, then, you know, to, I guess to get a little more, more tactical here. It reminds me of kind of the cyber security kind of thing. It's, it's an arms race. Right. So, you know, technology advances to protect and then the same or similar technology can be used to cause or enable other types of attacks. So, you know, fraudsters are now using AI to scale their attacks and brands are using AI to defend themselves. So that kind of back and forth. Can you maybe give a concrete example of how AI is being used tactically to move beyond this kind of like whack a mole approach to, you know, proactively identifying and neutralizing entire fraudulent networks even?
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Yes, and the phrase you use is a phrase we use all the time too, which is if the bad guys are using AI, we need to use AI. Brands need to use AI and these sophisticated tools because the battle is real. Right. And I, and I think we all know that, at least a lot of us know that in the world of tools out there or software out there, there are great softwares and tools that help you quickly build a website, which used to take, you know, if you try to do it yourself or you hired a company, could take forever. And now there's so many great tools that you could build a website. If you were a small entrepreneurial brand, you could build a website in literally couple hours. You could take if you decided to open up a storefront on an Amazon or a Walmart and you wanted to have a storefront, you could quickly use some of these tools to list your product, grab your photos and get all your descriptions up there so that you can start doing business, you know, in those channels. Or if you wanted to put ads on social media, again, great AI tools to help you do that. And that's an important piece to recognize because those are the same tools that bad actors use for nefarious activities, which is to, and some may modify those tools a little bit, but they accelerate the speed in which these bad actors do. And at the core of bad actors are fraudulent networks. Is, is money. And there is so much money to be had that it is why they go so fast and it's why they may have adopted AI before a brand adopted AI. And, and I think of as an example we use and I hear that phrase you used in the question, which is whack a mole. But it's one of those phrases where what it really means is that as we go after something, something else pops up. And so we need to change the game. We need to use AI as a strengthening tool to allow us to identify how are these bad actors circumventing detection. You know, what kind of AI models can we do, how do we create this is the kinds of things we do. But how do we create these trends and risk scoring on multitude of factors like different kinds of listing behavior which identifies a bad actor or even seller behavior. And what I mean for that is there's seller networks across multiple platforms and if we can identify that with AI, we can make this effort, you know, much easier. And I would say maybe lastly it doesn't really stop there because there's other tactics to do from a real case perspective, which is we do like a revenue recovery program where we use AI to help us identify these counterfeiters sellers across, you know, all these different marketplaces. And we use a third party law firm to help us create litigation on behalf of that brand. And when we do that, we freeze the funds that those brands have in those accounts. And with that frozen funds, when this lawsuit is settled, the brand gets some of that money. Right. And that's a little bit of a recovery revenue to pay for some of these things that bad actors are taking advantage of. So this process really truly works best when you combine the power of AI with industry experts. And I think at red points we've been doing this for 15 years. So we take that power that we're building in our AI, but we have to be able to use an infuse that industry experts into it to really make it effective for our, our customers today.
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Yeah, and let's talk a little bit more about that too because that, that idea of, you know, industry partnerships and you know, because again it, it's not going to happen, it's not going to be successful long term in a silo. So you know, how do this is platforms, payment processors, even competitors. Right. So can you talk a little bit about how, how this works in a, in a partnership perspective?
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Yeah, and that's a really good question. I think today we're sort of brands used to have maybe an internal team doing brand protection and today sort of, I hate to say but long gone are the days that a brand could do this without bringing in some sort of technology and brand protection teams inside brands. Trying to do this in this isolated version just won't work. It takes these, as you mentioned, these interconnected networks. Today, like I mentioned, we spend a lot of time with marketplaces and social media platforms to really create partnerships. I think today it's important to know that in the world of E commerce, what we think of E commerce today. But today somewhere between 2 and 4 billion items will be listed newly listed tomorrow in e commerce sites, marketplaces, social media, standalone websites that weren't listed today. And there is no way to go after those if we don't think about, about how to make these partnerships work. So we often create these partnerships with platforms and with the brand in order to strengthen the knowledge base. In other words, platforms can't solve it on their own, brands can't solve it on their own. And we really, as a provider and technology provider, we can't solve it. What we can do is bring in the platform, bring in the brand, say here's all the things we've been taking down and we want to share some information with you, the platform, and can you use your AI and technology to prevent many of these listings from ever showing up? And that's what's taking place today. And of course, lawmakers are pushing, and industry associations are pushing legislative or regulatory issues. And then I think you mentioned in your question, the financial payment process is really a key element because it's against the law to take credit card payment for counterfeits or stolen goods or drugs or etc. So they're motivated to help too. And I think those partnerships, that's interconnective partnerships with the brand, really reaching out for others to assist them is the future of tomorrow. And moving away from the isolated challenge of trying to do this on your own
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to get this done, then certainly it takes investment in order to do this. But you know, CMOs are used to proving ROI for all kinds of, all kinds of efforts. How do you reframe this brand protection conversation? Kind of going back to the very top of the show, how do we turn this from simply a cost center, an expense to an investment in the brand? You know, what are metrics, you know, beyond simple, you know, maybe some of the simpler numbers that, that demonstrate a direct link to things that you've talked about, revenue recovery, market share protection, things like that.
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Yes, and I think the challenge really is that I don't know if there's one measurement, different brands Use different measurements. We create for our customers an economic impact dashboard that we estimate the number of takedowns and how much that has cost the brand. The challenge with that is that we do it at a very conservative level. But we know from a social media ads perspective or fake websites, there's no way to track, track how many people fell victim to those fake websites or those fake ads. So we don't really know the cost of those things, but we know that they are costly, that we know that consumers get taken, and we know that consumer trust and brand reputation is at stake. Particularly again, if it's a safety item, it's even more dangerous. But I know to fact that some brands measure takedowns as the measurement. If I've taken down a thousand a week or 5,000 a week, that is a measurement. Some people use legal action, as I mentioned, that revenue recovery or suing, and some use raids as a measurement tool that if I could get through five factory raids this year or two factory raids, that would be, you know, value. But measuring that is challenging. But I think one of the other things that's challenging when I think about like measurements that, that I can't even fathom how to exactly measure this. But even LLMs, you know, it used to be when we, when we were marketing departments and we were driving revenue, we would do a lot of search engine optimization to get our brand surfaced high in the results. And then as that changed a little bit, we had to do pay for, pay for click for Word, you know, word search. And that was driving, driving up the brand in the search and driving revenue. And now we have these LLMs that are surfacing in many of the search engines that we use today, whether it's Google, Yahoo or Bing. But LLMs are the large language models are surfacing an answer to your cue. And I think about if a person of my age said what's the best facial cream for a guy my age? And it lists these five brands. I mean, I don't know today if those are the best five brands because what if the brand that I really was hoping would be there is getting clobbered in counterfeits and there's so many negative reviews and this LLM is scraping those reviews from Reddit or from Amazon or from, you know, some social media posts and, and that's what made it not show up on the list today. So I think there's a lot of challenges today in terms of how we do measure that. But I maybe share one real case example that you asked for, which is, and we did a live case with this, so it's okay to share this one. But one of our clients, Purple Mattress, they make a nice, really nice bed. But we had in a short period of time when they first started working with them, taken down over $6 million worth of, of counterfeit listings. And he came back to us after we showed him that economic impact and he says I think this is much higher, maybe two to three to four times higher than what you're telling us in terms of what we're really feeling from these counterfeits impacting our market share out there. So it's hard to know for sure how to do this today, but we have to think about all of the different components that you know, come into scale here and how do we, how do we measure that? When you think about as I mentioned earlier, 2, 2 to 4 billion items being listed tomorrow and your products in there for sure, the question is how much Today you have authorized resellers or distributors that can sell. So a lot of that product will be okay, it's going to be authentic and some small piece will be, you know, counterfeits and.
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Yeah, yeah. And I mean I think that that's the challenge here too is just how do you report on fraud that was prevented? Right. You know, it's a, it's a, it's a difficult if not, I mean you meant, you mentioned some, some ways to potentially estimate. But you know what, I guess what's the right way of, of think of framing this?
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Yeah, I, I, my experience and I've been doing this for a long time as I mentioned to you, but I'm, I'm not shocked but I've always at all, a little bit when I'm talking to a brand and they say to me, because we're experts in this anti counterfeit and they say can you tell us how big our problem is? And I said look, it's the first time we're working with your brand. I don't know how big your problem is.
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Right.
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You know, we're going to learn together. And sometimes they say how big do you think your problem is? And, and people don't know because I think people haven't really thought about that scale of E commerce today. You know, we think about our own personal website that the brand has their own great e commerce site that's just one component. There are multiple components out there and finding that out is, takes time but so really important understanding of the effect and particularly I'll share one time we helped a customer on, on Amazon who was suffering from counterfeits and they were a five star seller and the next thing you know they're a three star seller. And they had a big counterfeit problem and we helped them with that counterfeit problem. But now they were three stars on Amazon and they wanted to be five stars and they go, how do I get back to five stars? Well, you've got to sell your way into it. There's no, there's no, no magic bullet. You, you needed to act faster when you saw these negative reviews building, you know, and those are signals that we really need to pay attention to.
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Yeah, yeah. And so looking, looking ahead then, you know, I know we've already touched on some of the tools. You know, Gen AI has certainly made things easier to do. Even the ability to create a website easier and easier has, has enabled some of these things. Where, where is the next frontier that brands need to be paying attention to for brand impersonation and fraud? And you know, maybe what's, what's something that they should be doing today to prepare?
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Yeah, I, I think doing something is the key. Doing nothing is not a good solution. Doing something. So starting somewhere, right, Some brands get attacked differently. Some brands get attacked through marketplace listings and their counterfeits are on these marketplaces and cause challenges for brands. Some brands get attacked only on social media, you know, through posts or through marketplaces that are on the social media. And some brands get attacked. This is what I'm seeing today as a trend. But a lot of brands today are being attacked through the impersonation of websites that are identical clones of their website. And unless you really look at that URL and you think you're on the brand's website, whom you follow, whom you like to buy things from and you make a purchase on that website today, most of those websites will not send you a product. Because I think a lot of these fraudsters got smart and said, well, why would I put something in a box and ship it to you when I could just steal your credit card money? You know, when you put in your payment, it's much faster if I just take your money and move on. And these speed of takedowns today, you know, we're taking down maybe 70,000amonth of these fake impersonating websites of brands. And a few years ago it might have been a thousand, you know, I mean, it's, it's really become a trend. So I'd say, yeah, there, there are a lot of things that are changing, but I don't know if there's one measurement that you know, is particular to a brand. I think brands have to, we have to look at that and say where, where is this bad stuff happening? Can we where it's coming from? And then once we identify it, how do we solve that? But that's what I think brands have to start thinking about.
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Yeah, absolutely. Well, Daniel, thanks so much for joining today. Definitely a timely topic that more brands need to be paying attention to. Couple last questions before we wrap up here. First one, if we were having this interview one year from today, what is one thing that we would definitely be talking about?
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Well, we would certainly be talking about, boy, has the, the increase of sophistication grown so tremendously in one year. I can't believe it myself. Right. I mean, we'd be talking about what will be the next. I just actually read a great story from a guy who invented a fake brand and he built a website, he did reviews and read it and he did all this effort to build a fake brand to measure whether large language models these LLMs would pick this up as a valuable brand. And all but one picked it up and surfaced them as a top brand. And so, you know, is that tomorrow it's possibly that's tomorrow. And, and I think sometimes, you know, I don't want to make it sound like it's doom and gloom and that we're at this issue, but you know, being a retailer or being a brand has always been a lot of work. It's never, always, never been an easy journey. But I think today e commerce has changed. E Commerce at one time was a very small sliver of brands business. Today it's a significant piece of the business. And because that shopping pattern changed, the brand has to change and say, what do I do if I want to continue to drive this good business online? How do I do that and how do I do it safely and keep up with this challenge? But it's not doom and gloom. It's really about, you know, resurfacing an idea on how to do this better. Yeah. Yeah, I love it.
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Well, Daniel, thanks again. Last question for you here. What do you do to stay agile in your role and how do you find a way to do it consistently?
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That's, that's a tough one. But I, for me, I'm super fortunate that I'm speaking with marketplace and social media platforms all the time and listening to what their challenges are and how they're trying to fight this fight. That really helps give me a better picture of what's happening. I get the opportunity to speak to customers that are considering using our tool. I talk to customers that are using our tool and I also host a podcast myself called he owes your brand Protection and I invite guests from platforms like Amazon to join me and brands that aren't our customers and brands that are our customers. But having these conversations about what this brand is experiencing because different categories, whether you're in housewares or baby goods or fashion and footwear or cosmetics, the nuances of attacks are different in different industries. So learning from that really is what sort of grounds me and and keeps me dialed into the industry. Yeah. Love it.
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Well, again, I'd like to thank Daniel Shapiro, SVP Brand Relationships and Strategic Partnerships at redpoints for joining the show. You can learn more about Daniel and Red Points by following the links in the show notes
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this episode is brought to you by Tech Systems. They're leaders in full stack tech services, talent solutions and helping companies put it all in action. You can learn more@techsystems.com that's teksystems.com and thanks again for listening to the Agile Brand podcast. If you like the episode, hit subscribe and drop a rating so others can
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find the show too.
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And if you're interested in in consulting, advisory work, or if you need a speaker for your next event, feel free to reach out. Just visit GregKilstrom.com that's G R E G K I H L S t r o m.com the Agile brand is
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