One of E-Commerce’s Biggest Problems is Hiding in Plain Sight
Digital marketers obsess over customer experience because they understand it's essential to e-commerce success. However, these carefully crafted customer journeys are increasingly vulnerable to a growing — yet rarely discussed — threat: online journey hijacking.
Namogoo's recent comprehensive report on online journey hijacking lays bare the scope of this threat. The report found that approximately 20 percent of e-commerce shoppers in 2018 had their shopping experiences sabotaged by malicious injected ads. Across browsers, devices and verticals, online journey hijacking affects millions of consumers and robs businesses of hundreds of millions of dollars in revenue.
Understanding Online Journey Hacking
A customer’s online journey is “hijacked” when unauthorized ads are injected into malware-infected web browsers. Affected users see product ads, banners and pop-ups which appear to be part of the website, but are in fact meant to divert them to competitor sites. Because these unsanctioned promotions only appear on the user’s side, retailers are often unaware of these injected ads, which can cost them between 2 percent to 5 percent in annual revenue and negatively impact precious brand equity and customer trust. Imagine investing endless time and resources to get your e-commerce website just right, only to have it peppered with ads from competitors which are injected onto users’ browsers.
The report underscores just how pervasive this problem has become. There’s no silver bullet browser or device immune to this malware, nor any particular vertical or demographic. However, subtle variations in the data do reveal a number of interesting insights.
Safari and In-App Browsers Hit Hardest
While all major desktop web browsers exhibited high infection rates, Apple’s Safari web browser exhibited the highest infection rates for both desktop and mobile users, at 24.66 percent and 19.19 percent, respectively. Notably, the Pinterest and Facebook apps virtually tied for the second-highest infection rate among mobile browsers, at roughly 12 percent each. Considering the substantial investments digital marketers are pouring into these platforms, their vulnerability to online journey hijacking drives home the seriousness of the issue.
Similar Effects Felt Across Markets and Seasons
Infection rates varied only slightly between the U.S. and Europe. They spiked at 21.57 percent for U.S. shoppers during the Q4 2018 holiday season, whereas European shoppers experienced their highest infection rates (22.56 percent) in Q2 2018. However, these fluctuations were relatively minor. Deviations between the worst and best quarters and between regions varied by roughly 2 percent, indicating the problem is worldwide and widespread.
Subscription-Based Brands Faced Tough Q4
Although there was little variation in infection rate across verticals — since it's caused by malware running on the user’s device — variations in seasonal impact on certain verticals were dramatic. For example, while infection rates rose in Q4 2018 for all verticals, subscription-based brands’ infection rates more than doubled from Q3 to Q4 for desktop and mobile (34.14 percent and 17.13 percent in Q4, respectively).
Hijacking Targets Disproportionately Valuable Customers
One might assume that because infected users seem more vulnerable that they would naturally be less tech savvy and therefore less important to e-commerce businesses. Think again. On both desktop and mobile, previously infected users converted at double the rate of the “clean” users whose journeys weren’t hijacked. While this may seem surprising at first, it actually highlights that the most active online shoppers are more inclined to download extensions and other web services that are bundled with digital malware — and consequently become infected.
Once the injected ads were blocked, checkout abandonment rates improved considerably, dropping nearly 10 percent during the crucial Q4 2018 holiday shopping season.
Through great effort and expense, digital marketers court qualified leads, build beautiful online experiences, and optimize e-commerce journeys, only to have that investment siphoned off by crafty malware. Hundreds of millions of dollars in potential e-commerce revenues are thus lost to online journey hacking every year. The hijackers have thrived largely because, until recently, the e-commerce community was in the dark about the threat. Armed with better data and new insights into scale of the problem, retailers can do more than shine a spotlight on this growing threat — they can combat it. The time has come to handcuff these invisible e-commerce thieves and win back retailers’ hard-earned revenue.
Chemi Katz is the co-founder and CEO of Namogoo, a SaaS company that helps businesses prevent online journey hijacking.
Chemi Katz is co-founder and CEO of Namogoo, a SaaS company that helps businesses prevent online journey hijacking.
With over 17 years of experience in the security, commerce and advertising spaces, Chemi is a serial entrepreneur with a track record of leading some of the tech industry’s most innovative companies. Prior to co-founding Namogoo, Chemi was General Manager of DoubleVerify Israel and co-founded Seapai and Reissod. Earlier in his career, Chemi led Production Operations at LivePerson (NASDAQ: LPSN), was Global Business Technology Manager for Aladdin and managed IT Outsourcing for Bynet.