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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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JUNE 22, 2004
Tangled in the Phishing Lines The proliferation of scam messages purporting to be from legit companies has tech experts and marketers scrambling for fixes Marketers will spend a whomping $1 billion this year compiling e-mail addresses, crafting online offers, and sending out messages they hope will trigger action and inspire loyalty in their customers. But much of that effort could be for naught. An epidemic of "phishing" and "spoofing" attacks, in which scammers dupe Web users into divulging account and other personal information by pretending to represent known brands, is eroding trust in all e-mail marketing (see BW Online, 5/24/04, "How to Avoid the 'Phish' Hook"). When the subject of e-mail communications comes up, "my clients just hold their heads," says Howard Davidowitz, chairman of Davidowitz & Associates, a New York retail consulting firm. "My clients are reporting it is one big mess." His advice for now is to hold off stepping up e-mail marketing efforts until phishing problems have been worked out. Most companies are still adding to e-mail marketing budgets -- but not by much. Total category spending will rise from $1.2 billion in 2003 to $1.57 billion in 2007, but it will slip as a percentage of total marketing spending from 18% in 2003 to 11% by 2007, predicts Forrester Inc. THREE WAYS. What to do? Given the growing scourge of phishing, marketers had better devote some of their marketing money to protecting their customers -- or risk losing them forever. Security and e-commerce companies say they have no quick fix, although they're increasingly working together to come up with one. "It's a huge problem, it's getting bigger, but it's one we're going to solve," says Neal Creighton, chief executive of online security firm GeoTrust. Today, three main approaches are available for dealing with phishy e-mail and spoofing scamsters: adopt technology that certifies legitimate mail -- a sort of Good Housekeeping seal of approval; incorporate toolbars that warn users that they may be entering shady parts of the Internet; and use software that can help companies react when targeted by tainted mail, blunting the damage to customers. GeoTrust's technology falls into the first category. Its software digitally signs and certifies e-mail. Companies pay GeoTrust about $20 a year per user to certify that workers who send company e-mail have their identities verified by an independent third party (in Microsoft Outlook, these e-mails come with an image of a red ribbon). SHORT-TERM PLANNING. Several other technologies are emerging to compete with GeoTrust to help companies send out e-mail that customers can trust. Some Internet service providers are developing so-called "black lists" that block e-mail from known spammers. In the future, these could be turned into "white lists," so that only e-mail that has been verified from legitimate sources makes it through. Now, software is available that can help companies react more quickly when their customers are targeted. That way they can better protect customers, keeping them loyal. Since it may be years before any "silver bullet" solution is found, "we're emphasizing short-term goals that can help out," says Shawn Eldridge, chairman of the Trusted Electronic Communications Forum, a cross-industry group formed on June 16 to come up with tech standards aimed at fighting phishing and spoofing. "Companies need to start by bringing in layers of defense." One key, especially for banks and credit-card companies, is better security systems and transaction monitoring. Information-technology consulting firm Unisys (UIS ) works with banks to set up monitoring systems that can spot a phishing attack as it happens.
BW MALL
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