The Cost of Typosquatting

An Examination of Its Impact on the Top 250 Most Popular Websites

Executive Summary

It’s often acknowledged that typosquatting is rampant in the domain name space, but few understand the actual impact of this practice on brand owners.

In order to quantify the economic impact of typosquatting, FairWinds Partners analyzed domain names that are typographical variations of the top 250 most highly trafficked websites. The study concludes that typosquatting costs the brand owners associated with those sites $364 million and 448 million impressions per year in aggregate due to unnecessary advertising costs, lost sales, and poor user experiences (note: not a calculation of broader cybersquatting).

Our findings demonstrate that not all typographical errors are created equal; the kind of typo does matter. Some typos can do over $1M in annual damage to a brand and, in turn, can offer savvy brand owners significant returns on investment if that lost value is recovered. However, this study also shows that brands do not need to attempt to enforce their rights to the majority of infringing domains. In fact, most examples of typosquatting (typographical error based cybersquatting) do not impact a brand’s bottom line, since most domains do little to actually harm the rightful brand owners and would do little to benefit their online strategy. Prioritizing which domains to pursue is the key to reducing losses associated with this form of abuse and recovering the lost value. The analysis and findings presented by FairWinds in this study can help guide any brand’s search for the needles in the typosquatting haystack.

Foreword

As FairWinds reported in a past study, Internet users frequently use Direct Navigation, which is the practice of typing keywords appended with an extension such as dot-COM directly into an Internet browser’s address bar to locate websites. The prevalence of this navigation technique enables the widespread success of cybersquatting and typosquatting in particular, as these practices feed on traffic targeting well-known website addresses.

Typosquatting refers to the practice by which individuals seek to monetize or otherwise benefit from traffic generated by spelling or keystroke mistakes made by direct navigators attempting to reach specific websites. While our previous typosquatting study yielded important information about just what kinds of typos are valuable to both brand owners and the cybersquatters who prey on them, we have conducted a follow-up study in order to determine just how much traffic and money brand owners are losing as a result of this infringing practice.

There are, of course, other types of domain name infringements that are not taken into account in this whitepaper—namely combosquatting. Cybersquatters who practice combosquatting register combinations of brand names (or typos of brand names) and generic keywords (ex. IBMsoftware.com). This type of abuse is also very harmful but was not included in the scope of this particular study.

We have chosen to restrict our examination to typosquatting since it has finite boundaries to work within. For example, there are only so many permutations of the correct spelling of a domain name and we can easily find which of those are registered, who registered them, how they are used in commerce, and how frequently users type them into the address bar. This cannot be done with combosquatting as easily since there are infinite brand name and generic keyword combinations and permutations of spellings therein.

We hope that by conducting a thorough examination of the typo domains of the 250 most trafficked target domain names that fall within our study’s parameters, we will find out more about the scope and scale of typosquatting and cybersquatting in general.

FINDINGS

By calculating the losses experienced by the top 250 most frequently visited dot-COM sites that fell within the parameters of our study, we estimate that, in aggregate, typosquatting costs the brands associated with these sites $285 million per year due to unnecessary advertising costs, lost sales, and poor user experiences.

KEY RESULTS

• The top 255 most highly-trafficked sites in our study lose $265,180,586 to typosquatters each year
• Brands lose an additional $19,986,288 as a result of misusing the typo domains in our study that they do own
• 4 brands lose over 25 million visitors per year to typosquatted sites
• 10 brands lose between 5 and 11 million visitors per year to typosquatted sites
• 4 brands experienced an annual dollar impact of over $5 million
• 33 brands experienced an annual dollar impact between $1 million and $5 million
• Instead of spending money to reclaim all typosquatted names, brands can prioritize reclaims to pursue those domains that will produce a return on investment in a pre-determined time frame

 

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