Cybersecurity firm helps advertisers avoid ‘click fraud’
MIDDLETOWN – To many of the Android smartphone users, the cute cats or nature scenes in their freshly installed wallpapers were just a way to personalize a commonly held device.
The reality was a bit more nefarious though.
When those users weren’t on their phones, the downloads moved on to their real purpose: playing videos and viewing ads through unseen background processes as part of scams aimed at advertisers trying to reach people, not bots.
Users lost some battery life and bandwidth, but advertisers lost about $3 billion, according to Rich Kahn, the Delaware expert who uncovered the scheme called one of the largest frauds in history in 2017.
“There are a million ways to lose money with ad fraud,” said Beth Kahn, Rich’s wife and co-founder of Anura Solutions, a Middletown startup that lists 40 fraud classifications on its site.
There are hundreds of variations of ad fraud with new ones developed all the time, they said in interviews from their 7,500-square-foot office off U.S. Route 301.
According to a 2019 study from Juniper Research, advertisers were to lose upward of $42 billion in ad spend globally that year to fraudulent activities committed via online, mobile and in-app advertising. That is a 21% increase from the $35 billion lost to advertising fraud in 2018.
By 2023, Juniper estimates that ad fraud losses could reach $100 billion, a figure that the Kahns believe is conservative considering that nearly 25% of all internet traffic is fraudulent.
To try to beat back that tide, the couple and their 14 employees serve clients in the U.S. and as far away as Singapore and Ukraine.
Anura tackles online fraud – by bots, malware and humans – by analyzing hundreds of data points and billions of requests daily. Its dashboard helps clients track where the fraud is coming from, such as Facebook or affiliates, and ultimately suggests where to cut it off.
“Anura saves me the time that it takes to actually sit down and pull all the reports to go down the manual rabbit holes,” said Penny Lee, head of sales at BriteBox, a marketing and advertising company in Orlando. “If I had to put a value on that, I would say Anura is priceless.”
Anura aims to serve an enterprise class spending $50,000 to $100,000 a month on marketing. For firms spending far less, they suggested marketing automation software that applies Anura technology.
Small companies can also deploy a “honey pot,” or a field on a form that’s hidden from people but will be filled out by bots. Any request that comes with that field filled in is therefore fraudulent.
The Kahns dislike captchas, or the ubiquitous small tests that aim to ensure a person and not a bot is completing an action, because they increase customer friction and too often stymie real potential customers.
Online fraud can be more insidious than just shipping a product to somebody who hasn’t paid. It can involve lots of chargebacks – money that’s essentially escrowed, then lost – which endangers the existence of businesses’ merchants accounts. It can also involve fraudulent leads, including staff time lost following them up, possible violations of the Telephone Consumer Protection Act – at $1,500 per call – and damage to the brand.
Anura calls itself is “one of the fastest-growing AdTech companies in the United States,” and Beth said they would have been better off professionally if they had been in Silicon Valley or another tech hotspot. But it was an opportune snowstorm and dedication to family that landed the firm in the First State.
Rich is a serial entrepreneur, co-founding an internet service provider; a firm called Paid for Surf; eZanga, a digital marketing company; and now Anura, first as a product and then its own firm.
The Kahns decided 20 years ago to move from New York and closer to Beth’s parents in Myrtle Beach, S.C. They identified 19 communities between the two with good schools, low crime and other attractive qualities of life and devoted a summer to exploring.
“We just kind of fell in love with Middletown,” Rich said, with the decision made one snowy day their family needed medical care and discovered the southern New Castle County town.
By Ken Mammarella