Luis Casillas
Companies, in Brazil and around the world, constantly face the challenge of protecting their brands against piracy, an illegal practice that harms not only business, but also consumer reputation and trust. Investing in anti-piracy strategies is essential to ensure a positive Return on Investment (ROI) in the long term. Understand how companies can benefit from implementing effective anti-piracy brand protection measures and how this can result in lasting competitive advantages.
What is ROI?
ROI, Return on Investment, is an essential metric in the business world. Although it may seem like a technical term, its essence is quite simple. This is the result that reveals whether the money invested in a certain area or project is actually generating financial returns. In a world where every penny spent counts, ROI becomes the ultimate judge, determining the success or failure of corporations and strategies.
How is it related to anti-piracy? Well, when it comes to protecting your brand against piracy, investing in anti-piracy solutions is essential. Understanding return on investment (ROI) in this context means evaluating not only anti-piracy spending, but also the impact of these measures on the brand's financial health.
It's an equation that goes far beyond numbers on a spreadsheet; it is directly linked to the protection of intellectual property, brand reputation and, ultimately, consumer trust. ROI, therefore, is the key to not only justifying, but understanding the effectiveness of anti-piracy strategies and their importance in the business world.
Understanding the tangible and intangible results
Understanding the sum of results, tangible and intangible, in the context of anti-piracy, is also important to be clear about the importance of protecting the brand.
Tangible results can be measured in terms of lost revenue to “competitors” who counterfeit products. These are the figures that appear in financial spreadsheets and performance reports
Intangible results are manifested in the customer's trust in the brand and the company's reputation. Therefore, to fully understand the impact of anti-piracy, it is necessary to evaluate both the numbers and the sentiments, check out:
Tangible
The tangible result of brand protection against piracy is measurable and direct. Estimating lost revenue is an essential component of this equation. For example, this estimate can be made by multiplying the volume of advertisements found in the POC by the value of each advertisement and the number of sales already made through them. However, it is not always possible to obtain accurate data on past sales for each advertisement. In this case, in a conservative approach, number 1 can be used as a substitute, which underestimates the reality, since, in many cases, the sales volume tends to be much higher.
A real example illustrates this impact: a fake advertisement for a popular Stanley cup was selected through a marketplace. An analysis following the calculation indicated above showed that this advertisement generated 249 thousand reais in sales of pirated products. This value represents revenue that the official brand no longer received due to the presence of the counterfeit product on the market. Once the amount of pirated product sales is known, it is possible to calculate the Return on Investment (ROI) by dividing this amount by the monthly fee for the Brand Protection service, providing a clear view of the financial impact of protecting against piracy. This is a demonstration of how combating piracy can translate into measurable and solid financial results for companies.
Intangible
Although they cannot be quantified in the same way as financial numbers, their value cannot be underestimated. Intangible aspects are the "glue" that keeps consumers loyal to the brand, building trusting relationships that can last for years.
In addition to customer trust and reputation, measures against piracy bring with them other equally relevant intangible results. The better ranking of the real product in marketplaces and search engines is one of these benefits. The absence of counterfeits allows the legitimate product to stand out, avoiding competing for attention and positioning. This, in turn, reduces the need for heavy investment in advertising and promotion, resulting in significant savings.
Anti-piracy also alleviates the workload of the customer service sector. With fewer complaints and attempts to return counterfeit products, teams can focus on providing more effective service and building strong relationships with consumers. This can, in turn, lead to more positive reviews and a better company image.
In highly regulated sectors such as medicines, chemicals and food, protection against piracy can represent a significant reduction in the risk of legal sanctions. Counterfeit products in these segments can lead to serious regulatory violations, resulting in substantial fines and damage to brand reputation. Protecting the integrity of the original product is therefore a vital preventative measure.
Finally, anti-piracy also plays a role in anchoring the prices of genuine products. Prevents devaluation caused by the presence of counterfeit products on the market. With fewer low-quality alternatives competing on price, authentic products can maintain their market values, ensuring sustainable profitability for companies. These intangible benefits, although they do not appear directly in financial spreadsheets, are essential components of brands' success and resilience against piracy.
Piracy in Brazil and the World
According to a study released in 2022, conducted by Akamai, a cybersecurity company from the United States, Brazil is among the main countries in the world in the consumption of pirated content online, occupying 5th position in the global ranking. This trend has major financial repercussions: in 2020, the country experienced significant losses resulting from piracy.
According to data presented by the National Forum against Piracy and Illegality, the estimated total economic impact of piracy in Brazil was approximately R$287 billion. This amount represents the combination of direct losses suffered by 15 different industrial sectors with the estimated taxes that the Brazilian government failed to collect due to illegal commercial activities.
In addition to losing money, there are other negative aspects to consider. The first and most obvious is tax evasion, which covers a variety of fees and taxes, from import taxes to federal, state and municipal taxes. These lost tax revenues could be used to provide benefits and services for the population.
Furthermore, the introduction of pirated products into the Brazilian market, even if some are of high quality, negatively impacts the local industry. When illegal products enter the economy, they suppress demand for national products, such as clothing and footwear. If these pirated products were not present on the market, there would be a greater incentive to expand national production of these items, leading to a possible increase in employment opportunities in the sector.
On the world stage, the following are ahead of Brazil: the United States (1st), Russia (2nd), India (3rd) and China (4th). Around the world, the most pirated sectors were:
- Television - 66 billion views;
- Publishing - 30 billion access;
- Cinema - 14.5 billion access;
- Music - 10.8 billion access;
- Apps - 8.9 billion downloads.
More than a threat, a victim
It's important to understand that when we talk about brand threats, we are actually dealing with victims. A threat, which could be a social network profile or a sales page for pirated products, represents not only a risk, but at least a real victim of piracy. And this estimate that one threat equals one victim is actually a very conservative measure. The scale of the consequences of piracy is often substantially greater, possibly reaching hundreds of times greater than it first appears. This finding highlights the importance of protection against piracy, as the potential damage can be much more extensive than we imagine, affecting not only the brand, but also consumers and the economy as a whole.
Without a doubt, having an anti-piracy brand protection solution, such as ClearSale's Brand Protection, is essential in these times, and measuring the long-term return on investment, both tangible and intangible, only reinforces the importance of protecting this crime against corporations and people.
