Latest / Selling on Giants: The eCommerce Marketplace Podcast / How Ad Fraud Quietly Destroys eCommerce ROI with Rich Kahn

Transcript

How Ad Fraud Quietly Destroys eCommerce ROI with Rich Kahn · Selling on Giants: The eCommerce Marketplace Podcast

0:14
SPEAKER_01: Welcome back to this Helling on Giants.
0:16
SPEAKER_01: Today's episode is about how ad fraud quietly destroys e-commerce ROI.
0:22
SPEAKER_01: My guess is Rich Khan, founder and CEO of Anura.
0:26
SPEAKER_01: Rich has been in the digital advertising game for over three decades, and his path into fraud prevention starts the way most real solutions start.
0:35
SPEAKER_01: He got hit with fraud inside his own marketing agency, realized that there was nothing credible on the market, and built the system himself.
0:44
SPEAKER_01: In this conversation, we break down what fraud is, how it actually works in the real world, and the three main ways it shows up through bots, malware, and human fraud farms.
0:57
SPEAKER_01: Rich also explained why this is no longer a question of if you have fraud, but how much and what it does to performance signals, attribution, and ROI.
1:08
SPEAKER_01: We also get into practical indicators to look for, what you can do immediately to reduce risk, and what onboarding looks like if you want to measure and mitigate fraud without breaking your funnel.
1:20
SPEAKER_01: Let's jump in.
1:21
SPEAKER_01: Before we jump into the full conversation, here's what this episode is really about.
1:27
SPEAKER_01: Ad fraud is one of those problems most e-commerce teams would assume they would notice if it was happening.
1:34
SPEAKER_01: The reality is it usually shows up quietly.
1:37
SPEAKER_01: Performance looks a little off, ROAS drifts, lead quality drops, chargebacks rise months later.
1:45
SPEAKER_01: And by the time it's obvious, the damage is already done.
1:48
SPEAKER_01: In this episode, we break down what ad fraud actually is today, not in theory, but in practice, and Rich explains the three main ways fraud happens through bots, malware, and human fraud farms, and why human-driven fraud is more common and affordable than most brands realize.
2:06
SPEAKER_01: We also talk about why affiliate traffic and partner networks tend to carry higher risk and how that fraud often blends into legitimate-looking performance data.
2:16
SPEAKER_01: One of the most important takeaways from this conversation is that fraud does not always make performance look worse.
2:23
SPEAKER_01: In some cases, it can make ROAS look better by inflating fake conversions and form fills.
2:29
SPEAKER_01: That polluted data then feeds back into your ad platform and optimization logic, pushing spend in the wrong direction.
2:38
SPEAKER_01: We also get into why trying to recover ad spend after the effect rarely works and why preventing fraud, fraudulent users from ever seeing or clicking your ad is the only reliable strategy.
2:51
SPEAKER_01: As AI-driven media buying and automation accelerates, Rich makes a strong case that the fraud problem is getting more sophisticated, not less.
3:01
SPEAKER_01: If you run paid traffic, rely on performance data to make decisions, assume your ads are clean because the dashboard looks fine.
3:08
SPEAKER_01: This episode will change how you think about ROI.
3:12
SPEAKER_01: Let's get into it.
3:13
SPEAKER_01: Hey Rich, welcome to the show.
3:15
SPEAKER_01: I'm excited to have you on Selling on Giants and to dive into how ad fraud quietly destroys e-commerce ROI.
3:22
SPEAKER_01: But before we dive in, I'd love to know a little bit about like how did you even fall into this?
3:27
SPEAKER_01: Ad fraud is so niche and unique.
3:30
SPEAKER_01: It seems like uh it seems like you must have been put in a very unique situation to have this problem to solve.
3:36
SPEAKER_02: Well, yes.
3:37
SPEAKER_02: So uh about 2003, my wife and I started a company.
3:41
SPEAKER_02: It was um think of Google much, much smaller, right?
3:45
SPEAKER_02: So it was a basically a place where people can go and buy traffic for their campaigns, all text-based ads, target by geography, target by keyword, bid price, all the usual stuff, same thing just like Google, but again, much smaller.
3:59
SPEAKER_02: Um, and in 2003 we launched it, great success, things were going great.
4:04
SPEAKER_02: In 2004, we got hit with traffic quality is starting to turn.
4:08
SPEAKER_02: It's not looking the same as it was a couple of months ago.
4:11
SPEAKER_02: What's going on?
4:13
SPEAKER_02: So I started looking at the data and I realized right away this is this looks like fraud.
4:17
SPEAKER_02: Like I can just tell based on the analytics that I'm looking at, it looks like fraud.
4:21
SPEAKER_02: So I'm like, you know what?
4:22
SPEAKER_02: I dealt with fraud in the past, and I'm just gonna go find a fraud solution, bolt it onto the back of my my platform and just keep going and just grow my business.
4:30
SPEAKER_02: But looking around, nothing existed.
4:32
SPEAKER_02: This is 2004.
4:33
SPEAKER_02: So the first commercially available fraud solution didn't come out until like 2008, 2009-ish um era.
4:40
SPEAKER_02: So as a developer, I'm like, look, we can either do nothing and lose our business in the next year or two, or I can just build it myself and see if we can solve it.
4:48
SPEAKER_02: Um, so I built it myself and it solved the problem, and then it didn't.
4:53
SPEAKER_02: And we had to because fraud kept evolving, so we had to keep evolving our solution, and we kept I stayed on top of it, eventually hiring a team to take over and run the process that I was doing.
5:04
SPEAKER_02: And about 10 years later, we looked up and it's like we have all these clients asking to use our solution outside of our platform.
5:12
SPEAKER_02: So I want to say it was 2015, uh, if I got my dates right.
5:19
SPEAKER_02: Um, we ran a year in 2014, we did the year in review of fraud detection companies because you know, we were getting told, hey, we should really spin this off into its own company.
5:29
SPEAKER_02: And I'm like, before I take another second mortgage out of my house, build another company and another platform, do we bring something special to the market?
5:38
SPEAKER_02: Like, there's there's at this point we're talking like 2014, 15, there's half a dozen, you know, fraud solutions, or or they also know them as people here as IVT, invalid traffic solutions.
5:49
SPEAKER_02: That's the other term for it.
5:50
SPEAKER_01: Oh, okay.
5:51
SPEAKER_02: So you had other companies out in the marketplace that were doing this stuff.
5:53
SPEAKER_02: So I'm like, I want to make sure we're doing a better job.
5:56
SPEAKER_02: If not, there's no reason to enter the market.
5:58
SPEAKER_02: Like these are bigger companies, they've got you know tens of millions in sales already, they're already got a head leg up on us.
6:04
SPEAKER_02: Let's just take a look at it.
6:05
SPEAKER_02: So we bought traffic, uh, spent 100,000 of my own money buying traffic on Google, Yahoo, and Bing, drove it to a landing page.
6:14
SPEAKER_02: Well, let's call it a funnel, right?
6:16
SPEAKER_02: Which was a marketing funnel.
6:18
SPEAKER_02: And then as the traffic hit the funnel, at the at the stage where we needed filtration, we had all the companies mark that traffic, score the traffic any way they want, recorded that transaction, then it came down to generating a lead, which was the ultimate part of the funnel uh for different marketing services.
6:36
SPEAKER_02: And then we manually called each one to get everybody on the phone so we can determine was it a real lead or was it a fake lead?
6:44
SPEAKER_02: Um, so now we knew the human verified data, and then we went back to all the services and figured out okay, who got it right, who got it wrong.
6:53
SPEAKER_02: And we were significantly stronger than all the other solutions in the marketplace.
6:57
SPEAKER_02: We were finding stuff they were missing, we were more accurate on our solution.
7:01
SPEAKER_02: Like we were just it was, and I'm like, you know what?
7:03
SPEAKER_02: That looks great.
7:05
SPEAKER_02: But before I get a second mortgage on my house, let's run it again.
7:09
SPEAKER_02: Ran the test three times.
7:10
SPEAKER_02: Wow.
7:11
SPEAKER_02: And by the third time, my whole team is like, Rich, we're crushing it.
7:16
SPEAKER_02: We this we gotta do it.
7:17
SPEAKER_02: And I'm like, fine.
7:18
SPEAKER_02: So, you know, got the capital from from mortgage from a second mortgage and from you know, merchant cash advances and anywhere I could to put this together.
7:26
SPEAKER_02: Um, family, friends, and fools, like I like to say.
7:29
SPEAKER_02: Yeah, so ultimately uh it ended up being uh April 17th, uh April, I'm sorry, April 1st of 2017.
7:37
SPEAKER_02: We launched it as a standalone product.
7:38
SPEAKER_01: That's too funny.
7:39
SPEAKER_01: The date, did anybody like, is this an April Fools joke?
7:42
SPEAKER_02: It was funny because like I didn't want it to be on April Fools, but it was just that was ready to run.
7:48
SPEAKER_02: Like everything was done, and we're like, okay, we can launch it.
7:50
SPEAKER_02: And I'm like, all right, what day?
7:52
SPEAKER_02: The first.
7:52
SPEAKER_02: April 1st, really fine, that'll be fun.
7:55
SPEAKER_02: Launch it.
7:56
SPEAKER_02: And that that was a we did a big press release and a big rollout, and and here I am trying to grow it now because I'm the salesperson on the system.
8:05
SPEAKER_02: So I would basically go to the basement uh after work, sit down, and I had probably at that time only had about 2,000 LinkedIn contacts, and I personally emailed each one a personal message.
8:17
SPEAKER_02: Wow, asking him to come try the new solution, test it out.
8:20
SPEAKER_02: And that's how we got our first handful of clients.
8:22
SPEAKER_02: Wow, that's amazing.
8:24
SPEAKER_01: Do you think in your particular situation, because you had the advertising and digital marketing background, did that help you craft a better solution than what was out there?
8:33
SPEAKER_02: Yeah, because I was able to see real data, human verifiable data.
8:39
SPEAKER_00: Yeah.
8:40
SPEAKER_02: Um, if I was in the programmatic space that focuses on branding, this is where my competitors focused.
8:47
SPEAKER_02: So how do you know if your solution is real or fake?
8:50
SPEAKER_02: Like not real or fake, but how do you know if your solution's accurate or not?
8:53
SPEAKER_00: Yeah.
8:53
SPEAKER_02: You don't.
8:54
SPEAKER_00: Yeah.
8:55
SPEAKER_02: Because branding is just about getting eyeballs in front of it.
8:58
SPEAKER_02: And how do you know you got real eyeballs?
8:59
SPEAKER_02: You don't.
8:59
SPEAKER_00: Yeah.
9:00
SPEAKER_02: But if somebody comes in, fills out a form, you pick up the phone and say, Hey, I'm calling you because you asked for more information about marketing services.
9:08
SPEAKER_02: Yes, I remember filling out that form.
9:10
SPEAKER_02: Boom, you know that's a verified lead.
9:12
SPEAKER_02: That's a real person.
9:13
SPEAKER_00: Yeah.
9:13
SPEAKER_02: On the flip side, if you call and get the person on the phone, like, what the hell are you talking about?
9:16
SPEAKER_02: I didn't fill out any form, then you know it's a it's a fraudulent lead.
9:20
SPEAKER_02: So it's very verifiable.
9:22
SPEAKER_02: So in fact, that's where we started when we launched the company.
9:25
SPEAKER_02: We focused on the performance marketing space, affiliate marketing, lead generation, things that had provable because we knew that if we competed against any of our competitors, we were gonna win.
9:35
SPEAKER_02: And that's where we started our our marketing.
9:37
SPEAKER_01: Oh, that's pretty interesting.
9:38
SPEAKER_01: And like I said, I don't know a ton about the ad fraud space, but it sounds like the background and like what you've built, like you were uh you were destined, every step kind of moved you closer in this direction.
9:48
SPEAKER_02: Yeah, I felt like I got pulled along.
9:51
SPEAKER_02: Yeah.
9:52
SPEAKER_01: Well, like if that's if that's a way to say it.
9:54
SPEAKER_01: It's a good problem to have.
9:55
SPEAKER_01: Well, Rich, let's dive into the main topic.
9:58
SPEAKER_01: And um, so we're gonna discuss how ad fraud quietly destroys e-commerce ROI.
10:02
SPEAKER_01: And we have a variety of listeners.
10:04
SPEAKER_01: So I want to start with some of the basics.
10:05
SPEAKER_01: So, like, can you explain what ad fraud is?
10:08
SPEAKER_01: Is it like is it some guy just working for Google filling out forms on my behalf?
10:14
SPEAKER_01: Is it a is it an AI robot?
10:16
SPEAKER_01: Like, what can you define ad fraud and like what what it what it is actually?
10:20
SPEAKER_02: So ad fraud is okay, ad ford's committed by three different vehicles for the most part.
10:24
SPEAKER_02: It's either a bot, and that could be an AI bot or a standard bot, doesn't matter.
10:29
SPEAKER_02: Malware, so software installed on your on your device, or it can be done by human fraud farms.
10:35
SPEAKER_02: So any one of these vehicles are capable of doing it.
10:39
SPEAKER_02: Bots are cheap, AI is pretty close to the same price as that.
10:44
SPEAKER_02: Mauer is a little more expensive because you got to get software installed on people's machines and human resources.
10:49
SPEAKER_02: When you start doing human fraud farms, they're expensive, but you you can license them right now.
10:53
SPEAKER_02: You can license a human fraud farm for as little as$9 an hour per person.
10:57
SPEAKER_00: Jeez.
10:58
SPEAKER_02: So it's while it's still more expensive than running a bot, it's still very cost effective.
11:03
SPEAKER_02: I'll give you an example.
11:04
SPEAKER_02: So, what is fraud?
11:06
SPEAKER_02: Fraud is a lot of things.
11:08
SPEAKER_02: It's traffic you don't want, it's lower conversion, it's it's just somebody siphoning your dollars out.
11:14
SPEAKER_02: And I'll give you an example.
11:16
SPEAKER_02: Uh last year, so I got to get this year's data once it's published, but last year, so 2024, okay.
11:22
SPEAKER_02: Uh, as a global society, we spent north of 700 billion dollars in digital marketing.
11:28
SPEAKER_02: Okay.
11:29
SPEAKER_02: Yeah, that's a huge number.
11:31
SPEAKER_02: Fraud stole by our conservative estimates, 140 billion dollars.
11:37
SPEAKER_02: Wow, that is a lot almost.
11:39
SPEAKER_01: Yeah.
11:40
SPEAKER_02: I laugh because I, you know, I'm a I'm a Shark Tank fan.
11:42
SPEAKER_02: I love to watch Shark Tank.
11:43
SPEAKER_02: Like sometimes I'll go to bed and just throw it on for, you know, they got the the season just going back and forth.
11:48
SPEAKER_02: And I love it where like people get up and it's like, oh my God, this is the diaper industry.
11:52
SPEAKER_02: This is a a five billion dollar market.
11:55
SPEAKER_02: And like, oh wow, that's a big marketplace.
11:57
SPEAKER_02: I'm like, yeah, but fraud is 140 billion.
12:00
SPEAKER_02: Like, just to put it in scale is just ridiculously different.
12:04
SPEAKER_02: Yeah, so you have to really look at it like that.
12:06
SPEAKER_02: So it's so first off, I always tell people it's no longer a question of if you have fraud, it's a question of how much fraud are you being affected by.
12:13
SPEAKER_02: Interesting.
12:14
SPEAKER_02: And how much you're affected by really depends on where you buy your traffic.
12:18
SPEAKER_02: So I give you a simple one affiliate marketing.
12:21
SPEAKER_02: Okay.
12:22
SPEAKER_02: Average fraud to find on affiliate marketing for us is 45%.
12:25
SPEAKER_02: Wow, it's almost one and two.
12:27
SPEAKER_02: Right.
12:27
SPEAKER_02: So think of it this way you you can go right now and sign up for thousands of affiliate programs.
12:36
SPEAKER_02: Yeah.
12:37
SPEAKER_02: You you say, hey, I know I know how to generate traffic because you know you have a blog site that's crushing it and say the car insurance market.
12:44
SPEAKER_02: So you go and sign up with all the car insurance companies and say, I'm gonna drive you leads, and they'll all sign up, hey, I'll pay 15, I'll pay 20, I'll pay 25, depending on you know, state location, stuff like that.
12:56
SPEAKER_02: So they're gonna pay you every time a form is filled out.
12:59
SPEAKER_02: So legitimate person runs their traffic, puts their offers into their blog.
13:04
SPEAKER_02: They've already got all the traffic there.
13:06
SPEAKER_02: It runs, they make their money, and then one of two things happen.
13:10
SPEAKER_02: Either the the person, this affiliate, is either scrupulous and wants to commit fraud.
13:16
SPEAKER_02: So they go basically run the bots, run the the human fraud farms, do whatever they want.
13:21
SPEAKER_02: So, like they can go to a human fraud farm, nine bucks an hour, hire one person, give them a database of names and phone numbers and email addresses, whatever information they need, point them to the link for the affiliate offer to fill out the form, and then tell them, okay, I want you to go to this form and manually by hand fill out the form so it looks like it's not a bot.
13:42
SPEAKER_00: Yeah.
13:43
SPEAKER_02: When it's all done, check the box that says, Yes, I'm not a robot.
13:46
SPEAKER_02: Press the submit button, and I just made 15 or 20 bucks, right?
13:50
SPEAKER_02: Yeah.
13:50
SPEAKER_02: So my question is at nine bucks an hour, one person, how many forms can they fill out in an hour?
13:55
SPEAKER_02: 20, 30, you know, they can fill out a number of those forms.
14:00
SPEAKER_02: So if you said 20 forms at 20 bucks a uh form, that's$400 and you only paid$9 for that hour.
14:07
SPEAKER_02: Those are good margins.
14:08
SPEAKER_02: Highly illegal, obviously, but good margins.
14:10
SPEAKER_02: Actually, no.
14:11
SPEAKER_02: No, that's not illegal.
14:12
SPEAKER_02: Not illegal.
14:13
SPEAKER_02: What?
14:14
SPEAKER_02: Oh, there is no law on the books that says you can't do that, and more importantly, there's no laws internationally that says you can't do it.
14:20
SPEAKER_01: Oh my goodness.
14:21
SPEAKER_02: Whose fraud is is served overseas.
14:24
SPEAKER_02: So now it's a lawless crime.
14:27
SPEAKER_02: We all know that logically, that's stealing.
14:29
SPEAKER_02: Yeah, yeah, of course.
14:31
SPEAKER_02: Just logical, but it's not legal.
14:33
SPEAKER_02: Oh my god, legal and logical aren't always in line with each other.
14:37
SPEAKER_01: That is wild.
14:40
SPEAKER_01: So is it so the affiliate marketing that makes sense?
14:43
SPEAKER_01: How about on the pay-per-click side?
14:45
SPEAKER_01: Do you find that you're seeing a lot of like um like Google?
14:48
SPEAKER_02: Does is Google riddled with ad fraud?
14:51
SPEAKER_02: Google and Facebook, about 10% fraud is what we typically find.
14:54
SPEAKER_01: Is it my competitors that are paying to fill out my forms, for example?
14:59
SPEAKER_01: Like who, like, what's the incentive from a PPC perspective?
15:03
SPEAKER_02: So there's there's two basic types of fraud that you'll see like on Google.
15:07
SPEAKER_02: We'll just pick on Google because they're one of the biggest, right?
15:09
SPEAKER_02: Sure.
15:09
SPEAKER_02: Everybody likes to pick on Google.
15:11
SPEAKER_02: So you could have competitor fraud.
15:14
SPEAKER_02: So I come along, I'm your competitor, and we're let's stick with the car insurance just because I'm on that check already.
15:20
SPEAKER_02: We'll stick with that example.
15:21
SPEAKER_02: We both sell, we both represent some type of car insurance that's out there.
15:27
SPEAKER_02: So we have a budget.
15:28
SPEAKER_02: Let's say it's 10,000 a day on Google.
15:30
SPEAKER_02: So you have 10,000 a day, I have 10,000 on a day.
15:33
SPEAKER_02: And you're bidding a little bit more than me because you can your margins are a little better.
15:37
SPEAKER_02: So you can afford to spend, I don't even know what the the dollar the cost per click is nowadays.
15:42
SPEAKER_02: Let's call it five dollars a click.
15:44
SPEAKER_02: Sure.
15:44
SPEAKER_02: You can afford to spend six, I can only afford to spend five.
15:47
SPEAKER_02: So I have to wait for you to exhaust your ten thousand dollar budget before my ten thousand dollar budget goes.
15:53
SPEAKER_02: I'm like, well, we're gonna fix that.
15:55
SPEAKER_02: So there is software online right now that I can download called the Ad Clickerbot.
16:00
SPEAKER_02: What?
16:00
SPEAKER_02: AdWords clickerbot, because it was built when it was known as AdWords, not ads, right?
16:05
SPEAKER_01: That's back in the day.
16:05
SPEAKER_02: So I'm sure it's changed over the times, but it's it's a piece of software you download.
16:09
SPEAKER_02: I put in the keyword that I want to search for, I put in the domain that I want to attack, and then I hit go.
16:18
SPEAKER_02: And then it will basically click on your ad, six dollars a click, bang away, not convert for you, exhaust your ten thousand dollar ex bid your budget, and once your ad stops showing, mine moves up to the top and I start making I start getting the traffic.
16:34
SPEAKER_02: So that does happen.
16:36
SPEAKER_02: It's called uh competitor fraud.
16:38
SPEAKER_01: Wow.
16:38
SPEAKER_01: And no ramifications, it's just a good does.
16:42
SPEAKER_01: If you guys caught that, how do you stop it?
16:45
SPEAKER_02: We have we get into complex ways.
16:48
SPEAKER_02: I mean, that's more of the sales pitch of what we do.
16:49
SPEAKER_02: And I generally speaking, on things like this, I don't like to go into a sales.
16:52
SPEAKER_02: We'll talk a little bit about that.
16:53
SPEAKER_02: Yeah, we have software that can identify it in real time and eliminate those devices from clicking on your ads and stuff like that.
16:58
SPEAKER_02: Like a blacklist almost, right?
17:00
SPEAKER_02: You're like sort of like that, yeah.
17:02
SPEAKER_02: We're not looking at an IP address, we're looking more at the device itself.
17:05
SPEAKER_02: You know, is this device being you know manipulated?
17:08
SPEAKER_02: Are they using IP addresses that shouldn't be used?
17:11
SPEAKER_02: There's like a whole, I mean, uh it's been 20-something years in the making of of how we come up with this and and help mitigate this.
17:18
SPEAKER_02: But then you have on the other side you have people that are just looking to make money.
17:22
SPEAKER_02: So most people don't know this, but 90% of the traffic you buy from Google Ads is not from Google.
17:29
SPEAKER_02: Who's it from?
17:30
SPEAKER_02: Well, have you said have you personally ever set up a Google Ads campaign?
17:34
SPEAKER_01: Uh long time ago.
17:36
SPEAKER_02: Yeah.
17:37
SPEAKER_02: So anybody that set up Google Ads campaign will know this happens and they may not know where it is.
17:42
SPEAKER_02: But when you start building out the campaign, there's a hidden feature or hidden select box select box that says include Google's partner networks.
17:52
SPEAKER_02: And that's by default checked, which is where 90% of their traffic comes from.
17:58
SPEAKER_02: And most people don't dig in to shut that off.
18:00
SPEAKER_02: If you shut it off, it eliminates some of the fraud, but not all of it.
18:03
SPEAKER_00: Okay.
18:04
SPEAKER_02: There's still fraud that attacks Google.
18:05
SPEAKER_02: But you can start, you can reduce some of the fraud by by shutting that off.
18:08
SPEAKER_02: But then you also shut off some of your your reach, which could also increase your cost per click.
18:13
SPEAKER_02: So there's we we go through a whole management system with people on how to do this right the right way.
18:18
SPEAKER_02: But in there, you have tons of websites you've never heard of that drive a lot of traffic and make money every time a click takes place.
18:28
SPEAKER_02: So now let's we we talked about the the fraudulent guy.
18:31
SPEAKER_02: Let's talk about the non-fraudulent guy, you or me, right?
18:33
SPEAKER_02: Okay.
18:34
SPEAKER_02: So you're running a blog site, talks all about car insurance.
18:37
SPEAKER_02: You've got Google ads on there, people are clicking on them, you're making$2 a click.
18:41
SPEAKER_02: Life is good.
18:42
SPEAKER_02: And you're like, damn, if I could double the traffic, I could double my revenue.
18:46
SPEAKER_00: Yeah.
18:47
SPEAKER_02: How do I do this?
18:48
SPEAKER_02: So now you start searching the internet, not for fraud, you're searching the internet just for lower cost per click traffic that you can buy to land on your site with the hopes that they click on an ad and convert and make the money.
18:59
SPEAKER_02: So if and I'm gonna run run bad on math right now because it's it's weird.
19:05
SPEAKER_02: But if I'm making$2 a click and I can spend a dollar a click to generate enough clicks that one of those clicks on the ad, I can make a dollar.
19:15
SPEAKER_02: I'm basically arbitraging a thing.
19:18
SPEAKER_02: And that's what it's called search arbitrage.
19:20
SPEAKER_02: Huge industry do hundreds of millions of dollars a month in business across dozens and dozens of companies.
19:27
SPEAKER_02: But what ends up happening is you end up buying traffic that's cheap.
19:33
SPEAKER_02: Cheap traffic is latent with fraud.
19:35
SPEAKER_02: Now you're not doing it purposefully, but it gets into your stream, and like it's not what you're trying to accomplish.
19:41
SPEAKER_02: What you're trying to accomplish is that arbitrage model.
19:44
SPEAKER_02: Shoot, I just double my revenue, and I'm I'm spending so for every dollar I spend, I'm making two, do this all day long.
19:50
SPEAKER_02: I mean, how many dollars can I feed the system?
19:52
SPEAKER_02: And that's what you want to do.
19:54
SPEAKER_02: But what ends up happening is sooner or later, uh, and usually fairly quick, Google comes along and says, Oh, the last three months of traffic you sent us was all garbage.
20:03
SPEAKER_02: We're recalling all that revenue.
20:05
SPEAKER_02: What they can do that?
20:06
SPEAKER_02: Wow.
20:06
SPEAKER_02: They I've seen them do it as far back as six months.
20:09
SPEAKER_02: Wow.
20:10
SPEAKER_02: And literally shut companies down and then bankrupt the owners, and it's just it's a big mess.
20:15
SPEAKER_02: So anybody playing in that space needs to have some type of invalid traffic solution, fraud solution in place to help them mitigate that so they don't run into a trap.
20:26
SPEAKER_01: Are there particular categories or uh size of businesses that is gonna be more impacted by something like this?
20:36
SPEAKER_02: I haven't come across it yet.
20:38
SPEAKER_02: Because they don't target, usually you fraudsters when they're doing it, they're targeting making money, not specifically an individual company.
20:45
SPEAKER_00: Okay.
20:46
SPEAKER_02: And they like to not target individual companies because if you target Allstate, yeah, like with the car insurance, right?
20:53
SPEAKER_02: You target Allstate.
20:54
SPEAKER_02: Allstate's gonna see their they are watching their numbers like like hawks.
20:58
SPEAKER_02: And when something uh changes, they're gonna go back to Google and guess what?
21:01
SPEAKER_02: They're a big enough client to be able to demand refunds.
21:04
SPEAKER_02: Oh, interesting.
21:05
SPEAKER_02: So if I was the person who's attacking it, I wouldn't want to just attack Allstate.
21:10
SPEAKER_02: I want to attack everybody.
21:11
SPEAKER_02: You know, it doesn't have to be just car, like maybe I want to stick with the car insurance, but maybe which leads to hundreds of companies, but maybe I want to attack every vertical out there.
21:19
SPEAKER_02: There's millions of clients out there, and if I spread my fraud across a lot of companies, it gets harder to find.
21:26
SPEAKER_01: Wow.
21:26
SPEAKER_01: And just a little bit at a time, man, that that is wild.
21:31
SPEAKER_01: So you mentioned earlier in the conversation, like there's certain indicators that you're you immediately know this is fraud to uh fraud traffic.
21:38
SPEAKER_01: Like, what are those KPIs?
21:40
SPEAKER_01: Is it like when you look in your Google Analytics and it's like a weird website you never heard of, and you click on it and it's like just crap?
21:47
SPEAKER_01: Or is it like what are some of those indicators that's like, oh, this is definitely fraud?
21:52
SPEAKER_02: So we're looking at a lot of I mean, we're looking at over 800 data points.
22:00
SPEAKER_02: To identify to identify fraud.
22:02
SPEAKER_02: So we're looking at lots of different things to try to identify does the data make sense?
22:08
SPEAKER_02: Does the data interact with each other correctly?
22:10
SPEAKER_02: Does this look like a legitimate person?
22:12
SPEAKER_02: Um, there's no single bullet, like we don't have a silver bullet, but we may have, because we we have hundreds of millions of clicks going on or visitors that we're scanning on a ro on a daily basis, and we're going through those visitors, and all of a sudden, and I hate to use this word, but an IP address shows up that's a hundred percent use for fraud.
22:33
SPEAKER_02: We might add that to a list to say, hey, you know what, this is bad.
22:36
SPEAKER_02: The second we get a good click in from that, we'll take it off the list.
22:39
SPEAKER_02: There are some companies, some of my competitors, that's all they do is just IP address.
22:43
SPEAKER_02: And that's so 1990s style of fraud detection because you and I don't own our IP addresses anymore.
22:50
SPEAKER_02: Like we used to own the IP address, like it was generally speaking, it was your IP address, but you have a cell phone, right?
22:56
SPEAKER_02: You bounce off a cell tower that has a limited number of IP addresses, maybe a handful of IP addresses, and thousands of people share that cell tower throughout the day, all sharing the same IP addresses.
23:05
SPEAKER_02: So that doesn't work.
23:07
SPEAKER_02: You know, I'm in an office, I've got about 30 employees in the office.
23:10
SPEAKER_02: Probably in this office, we probably have a hundred different devices between anything that's digitally connected, my Alexa, my cell phone, that's all connected to the Wi-Fi, and all it goes out, one IP address.
23:20
SPEAKER_02: So that doesn't work.
23:21
SPEAKER_02: If you go to a conference, you know, conference is a great example.
23:25
SPEAKER_02: You might have thousands of people at a conference all sharing the same Wi-Fi.
23:28
SPEAKER_02: Oh, there you go.
23:29
SPEAKER_02: How do you how do you know if that's good or bad?
23:31
SPEAKER_02: Yeah, you really want to get down to the individual.
23:33
SPEAKER_02: Is the individual that's connecting to my website at this moment real or fake?
23:38
SPEAKER_02: That's what really kind of sets us apart than than our competitors because we're not looking at the IP address, right?
23:43
SPEAKER_02: Because behind the I call it call call it like the ring rungs of a ladder.
23:46
SPEAKER_02: At the very top, you got the IP address, right?
23:49
SPEAKER_02: And unless that's 100% fraudulent coming from that IP address, you can't really do much with that to be accurate about that fraud.
23:56
SPEAKER_02: Last thing I want to do is block that IP address and prevent real people from converting on my site.
24:01
SPEAKER_02: That's money I'm losing, right?
24:03
SPEAKER_02: Behind the IP address is a device next wrong of the ladder, right?
24:08
SPEAKER_02: That device, so behind each IP address, you have tons of different devices.
24:13
SPEAKER_02: Like I said, my office alone, small office has probably a hundred devices that that are connected.
24:17
SPEAKER_02: Behind each device, go down a wrong, one more wrong, is a user.
24:21
SPEAKER_02: Yeah, the user of the device.
24:24
SPEAKER_02: So you might be the user on your cell phone, but if you have a fraudulent app running, it actually acts as a separate user.
24:30
SPEAKER_02: Oh, really?
24:31
SPEAKER_01: So you would see a device with multiple users, and you're like, bingo, that's I can tell which is real and which is fake.
24:38
SPEAKER_02: Oh, interesting.
24:39
SPEAKER_02: So we get down to that user level that that really identifies because again, if I block a real, I'll give you a perfect example.
24:45
SPEAKER_02: We had a content writer that was working for us, it was outsourced, it was a marketing company that was doing a bunch of things for us.
24:50
SPEAKER_02: One of the things they were doing was writing for us.
24:52
SPEAKER_02: And the writer was so excited so excited to get on a call and actually talk to us and say, I've got a great example for you.
24:58
SPEAKER_02: So she was she went to a website that she's been before, it's a women's fashion site, and she spent like an hour shopping, and you know, she was buying some you know, clothes, some purses, or you know, some women's apparel.
25:10
SPEAKER_02: Yeah, she filled up her cart, went to make a purchase, and wouldn't let her make a purchase.
25:13
SPEAKER_02: I identified her as fraud.
25:15
SPEAKER_02: Really?
25:16
SPEAKER_02: Like, I work for a fraud detection company, they're mismarking me.
25:19
SPEAKER_02: Whatever they're using is mismarking me.
25:21
SPEAKER_02: Let me try switching browsers.
25:23
SPEAKER_02: She tried switching browsers, they were blocking her.
25:26
SPEAKER_02: She tried switching uh devices.
25:28
SPEAKER_02: So she went on her husband's computer, same thing, wouldn't let her buy.
25:31
SPEAKER_02: She's like, you know what?
25:32
SPEAKER_02: I know enough, they're blocking my IP address.
25:35
SPEAKER_02: I'm just gonna go to a competitor and buy it there.
25:37
SPEAKER_02: So she went to a different women's fashion site, bought the stuff there, had no problem, and guess what?
25:43
SPEAKER_02: She's now a client of that new competitor.
25:45
SPEAKER_02: So, what did that cheesy marketing and blocking the IP address incorrectly cost that company?
25:51
SPEAKER_02: I mean, she's she told me she spent about a thousand bucks on that purchase.
25:54
SPEAKER_02: Wow, but she buys stuff throughout the year.
25:57
SPEAKER_00: Yeah.
25:57
SPEAKER_02: So how much did it really cost them?
25:59
SPEAKER_02: Um, so you really got to be careful.
26:01
SPEAKER_02: Like, we tout ourselves as the world's most accurate fraud solution.
26:05
SPEAKER_02: We actually guarantee we're 99.999% accurate when we identify somebody as fraud.
26:10
SPEAKER_00: Wow.
26:11
SPEAKER_02: No other company comes close, no other company has a guarantee behind it because they can't.
26:15
SPEAKER_02: So for us, that's our that's what sets us apart.
26:18
SPEAKER_02: Like we know that if we tell somebody this is fraudulent, take it to the bank, you're not going to lose money, go ahead and block it.
26:24
SPEAKER_02: And that's how we do it.
26:26
SPEAKER_02: We get down to the user level, not just the IP address or the device.
26:29
SPEAKER_02: We really get down to the individual that's connecting at that time.
26:32
SPEAKER_01: That's pretty interesting.
26:34
SPEAKER_01: And then, as like um ways to make your clients whole, once you identify that fraudulent uh information, typically our e-commerce brands, like if it's through Google, are you able to like show that and get refunded for those costs per click?
26:50
SPEAKER_01: Is it a way to be made whole?
26:51
SPEAKER_01: Yes and no.
26:52
SPEAKER_02: Okay.
26:53
SPEAKER_02: Google doesn't like to be told by anybody how to charge at once.
26:57
SPEAKER_02: Right.
26:58
SPEAKER_02: So I did read an article not too long ago that said that, and I might have these numbers flip-flop, but it yields the same thing, that Google will agree with 10% of the requests that come in for uh refund and they'll agree to about 30% of what they're asking for.
27:20
SPEAKER_00: Got it.
27:21
SPEAKER_02: So when you look in the marketplace, if you multi-do the math, it basically on average Google, you know, for every request that comes into Google, Google gives it about three percent.
27:29
SPEAKER_02: Wow.
27:30
SPEAKER_02: Right.
27:30
SPEAKER_02: So that's we we practice the art of avoidance.
27:33
SPEAKER_02: Yeah.
27:33
SPEAKER_02: So instead of waiting to collect the data and get credit, which you can do, but we know is is not likely to happen often enough that that's a way to do it.
27:44
SPEAKER_02: Um, we'll actually, and actually I shouldn't say that, we do that more so with clients that spend a lot of money.
27:49
SPEAKER_02: Like you're spending six figures a month with Google, you got their attention, right?
27:54
SPEAKER_02: That's the client that they want to really work with.
27:56
SPEAKER_02: So you get a little more attention there.
27:57
SPEAKER_02: If you're spending sub that, you're not gonna get as much attention.
28:01
SPEAKER_02: And it makes sense because they have so many clients, yeah, they only have a handful of account managers, they can't really stay.
28:06
SPEAKER_02: Yeah, it is what it is.
28:08
SPEAKER_02: So our technology identifies it and will actually hide your ad from the fraudulent visitor.
28:13
SPEAKER_02: Well, you can't even click on your ad.
28:15
SPEAKER_02: That's how we work.
28:16
SPEAKER_02: That's awesome.
28:18
SPEAKER_01: So if I'm an e-commerce company and let's just say I don't really know about ad fraud, like what are some indicators that I would see that I would need to reach out to you, Rich?
28:26
SPEAKER_01: Like we're doing, I'm gonna stick with PPC because that's my wheelhouse.
28:30
SPEAKER_01: We're doing PPC humming along.
28:32
SPEAKER_01: Like, what are something that I'll see that's like, hmm, that's that's that right?
28:36
SPEAKER_02: It it comes down to fallout of money.
28:39
SPEAKER_02: What is going on?
28:41
SPEAKER_02: Do you have a high chargeback rate if you're an e-commerce site?
28:44
SPEAKER_02: Like, are you sending out product and then all of a sudden getting charged back months later?
28:47
SPEAKER_02: And meanwhile, you already sent the product out, you already paid the affiliate out if you have an affiliate, you already paid the marketing dollars through Google.
28:54
SPEAKER_02: It's already been out the door, you're out hard cost and you're out the product, you know, and then you get a chargeback, which is a chargeback fee because everybody knows in e-commerce if you get a chargeback, it's like$25 for the chargeback fee plus the investigation, and half the time you don't win it.
29:08
SPEAKER_02: You know, so it you gotta watch those numbers.
29:12
SPEAKER_02: E-commerce is a little tough because most of my e-commerce players tell me that it can take upwards of nine months to get the chargeback data back.
29:22
SPEAKER_02: It just depends on where they fit in the cycle, right?
29:25
SPEAKER_02: Yeah, and if it takes nine months, you've already paid out the you've already paid out the marketing dollars, you already shipped out the product.
29:31
SPEAKER_02: I'll give you a great example.
29:33
SPEAKER_02: We had a very large um airline ticket company working with us, and they were like, look, if you're even a fraction of a percent wrong, mismarking a real person as fraud, you're gonna cost me more in 10 minutes than I spend with you all month.
29:46
SPEAKER_00: Wow.
29:46
SPEAKER_02: And I to me, that's when I that's this was early on, and this is when I realized the accuracy is gonna be paramount for e-commerce players, especially.
29:56
SPEAKER_02: Because if I say no, don't charge it, just like my my writer, you're gonna lose a thousand dollar you know order and the customer moving on, you know, lifetime value of that client, you just lost because you did something wrong.
30:08
SPEAKER_02: So we were constantly trying to prove ourselves.
30:11
SPEAKER_02: And I remember the head of uh whatchamacallit, fraud called me and goes, I got one.
30:15
SPEAKER_02: Hey, I go, what do you got?
30:16
SPEAKER_02: He goes, A month ago, somebody made a purchase on our site and you marked it as bad, you marked it as fraud, and I know it's not fraud.
30:22
SPEAKER_02: I go, why do you know it's not fraud?
30:24
SPEAKER_02: He goes, Because they actually flew the ticket.
30:27
SPEAKER_02: Oh I'm like, oh, that's different.
30:31
SPEAKER_02: I've never come across that before.
30:32
SPEAKER_02: So I said, Hold on a second.
30:34
SPEAKER_02: So I went back and looked at our back end secret sauce data, and I'm like, dude, there's no way this is real.
30:41
SPEAKER_02: I can guarantee you.
30:42
SPEAKER_02: I said, tell you what, print that ticket out that you have on your desk, post it in your in your office, and three months from now, when that thing comes back, I want you to call me back and apologize.
30:53
SPEAKER_02: And it was like two months later he called back and had to apologize.
30:55
SPEAKER_02: Oh no, he's like, but I don't understand.
30:57
SPEAKER_02: They actually flew the ticket.
30:58
SPEAKER_02: I mean, that's because they got fake ID, which is easy to get nowadays.
31:02
SPEAKER_02: Yeah, you know, it passes FAA regulations, and you know, they flew the ticket under an assumed name and nobody caught it.
31:10
SPEAKER_01: Damn, that is that's brazen.
31:12
SPEAKER_01: Yeah, that is, especially like, oh my god.
31:15
SPEAKER_01: Uh you can uh can you go to jail for something like that?
31:18
SPEAKER_01: Or that's still I would think so.
31:21
SPEAKER_01: Okay, I was thinking so too.
31:22
SPEAKER_02: Like I mean, not for buying the ticket, but well, first off, you stolen credit card, right?
31:26
SPEAKER_02: So it's probably a couple thousand dollars because let's face it, if you're gonna steal a credit card, you you're gonna buy fake tickets, you're gonna buy first class, right?
31:32
SPEAKER_02: So yeah, you're probably talking a couple thousand bucks, so it goes over certain limits.
31:36
SPEAKER_02: Um, so it's credit card fraud.
31:39
SPEAKER_02: Um, from what I remember, it was somebody in the country, so they they gave a fake address in the country, and then they flew uh whatchamacallit under a false name.
31:48
SPEAKER_02: I mean, you're breaking all kinds of rules.
31:49
SPEAKER_02: Yeah, yeah, that's a different type of fraud altogether.
31:52
SPEAKER_01: So I mean, yeah, they're breaking we're not covering that here, but that is insane.
31:56
SPEAKER_02: Yeah, that's a different fraud that's definitely uh against the law.
32:00
SPEAKER_01: So if I'm uh a CMO at a company uh managing, you know, e-commerce or staying in a lane, uh, what strategies or tools do you recommend for like detecting some of this ad fraud?
32:10
SPEAKER_02: Like, should every website have Google Analytics as a basic, or is there um I hate to say it, but in in right now, we just launched a new version of our software.
32:20
SPEAKER_02: It took three months because it was a total rewrite.
32:23
SPEAKER_02: Um, about three months ago, three plus months ago, um, one of our big clients who's really attuned to their numbers found some type of fraud that was getting around our system.
32:35
SPEAKER_02: They had the data, they had the proof, and then we started looking at it.
32:38
SPEAKER_02: And they weren't just getting around us, they got around every IVT solution in the market.
32:44
SPEAKER_02: Wow.
32:45
SPEAKER_02: That we that we're aware of.
32:46
SPEAKER_02: I shouldn't say uh because I don't know them all, but yeah.
32:48
SPEAKER_02: I mean, we're talking dozens and dozens of IVT solutions that are hundred million dollar or billion dollar worth of evaluation companies.
32:55
SPEAKER_02: Like we're talking big company with teams of PhDs working on their stuff and got around all them.
33:01
SPEAKER_02: We're the first company to launch a version that will protect against that type of AI fraud.
33:06
SPEAKER_02: Wow.
33:07
SPEAKER_02: Um so if they're able to get around teams of people that this is what they do, it's really hard pressed to find somebody to do it themselves.
33:17
SPEAKER_02: So it's so much so I always tell people it's cheaper to hire a company like us than to hire one person to work on the project.
33:25
SPEAKER_02: Yeah, and you're gonna need more than one person.
33:27
SPEAKER_02: You know, you're gonna need a team of people, a data lake, AI modeling, I mean, machine learning algorithms, years of experience doing this.
33:36
SPEAKER_02: I mean, because it's just it's not like you go to school for this.
33:39
SPEAKER_02: This is stuff you like, like everyone's like, Oh, I got a PhD.
33:41
SPEAKER_02: What do you got?
33:41
SPEAKER_02: In mathematics, typically, right?
33:43
SPEAKER_02: Yeah, you know, I even have I even have a researcher who's like touting that he's a PhD and he knows what he's talking about.
33:48
SPEAKER_02: He's a PhD in chemistry.
33:49
SPEAKER_02: It has nothing to do with what we do, right?
33:52
SPEAKER_02: Um, but yeah, so ultimately it's you know, it's just cheaper and faster to hire a company like us that this is what we do.
33:59
SPEAKER_02: We're even third-party certified.
34:01
SPEAKER_02: There's there's two companies out there that do certification.
34:03
SPEAKER_02: One of them is called Tag, okay trustworthy and accountability group.
34:06
SPEAKER_02: And they actually look at our code, look at our process, look at everything we do, and sign off that we're following best practices for the industry standards.
34:14
SPEAKER_02: Damn, okay.
34:15
SPEAKER_02: It's cheaper just to hire a company like us than to really try to do it yourself.
34:18
SPEAKER_02: Unfortunately, there's really no free tools out there that you can play with that are going to help you identify.
34:23
SPEAKER_02: This is just this is after this this adjustment that just came out with this new I just I don't see people being able to do it themselves.
34:30
SPEAKER_01: I could see with AI being able to iterate so fast that it's uh software needs to catch up with software, that's for sure.
34:37
SPEAKER_01: Yeah.
34:38
SPEAKER_01: So uh just kind of wrap up on the uh e-commerce before we talk a little bit about Anura.
34:44
SPEAKER_01: Um so if I'm humming along, like typically e-commerce.
34:50
SPEAKER_01: So I'll know I have fraudulent.
34:52
SPEAKER_01: So will I see a drop in ROAS or it's just the chargebacks of the primary indication?
34:58
SPEAKER_01: Does anybody ever drive traffic to get the clicks but it doesn't convert?
35:01
SPEAKER_02: And then some of the older fashion attacks do that, where all of a sudden you have a ROAS at a certain level and all of a sudden starts to drop fast.
35:09
SPEAKER_02: Yeah, and you know you got an attack.
35:11
SPEAKER_02: Um, you can see fluctuation.
35:13
SPEAKER_02: I've even seen it where ROAS is higher than expected.
35:17
SPEAKER_02: And people are like, what do you mean higher?
35:19
SPEAKER_02: It's because the way you're tracking your ROAS.
35:22
SPEAKER_02: It's you know, you could be just tracking things that are easy to manipulate, form fills, like we just spoke about.
35:27
SPEAKER_02: I can give human fraud farm a list of things, and if they're filling out too many forms per click, ROAS goes through the roof.
35:33
SPEAKER_02: Yeah, because that's how they're tracking it.
35:35
SPEAKER_02: So you gotta really gotta look at the data where it makes the most sense.
35:38
SPEAKER_02: Um, you're gonna feel it like if you're for if you have form fills and you feel it all the time.
35:42
SPEAKER_02: How many people have form fills and you pick up and call a person?
35:45
SPEAKER_02: And hey, you never get them on the phone.
35:47
SPEAKER_02: When you get them on the phone, they don't know who you're talking about.
35:48
SPEAKER_02: Yeah, happens that's clearly fraud.
35:51
SPEAKER_02: If you have a form on your site, you get this all the time.
35:53
SPEAKER_01: Yeah.
35:54
SPEAKER_01: Yeah.
35:55
SPEAKER_01: E-commerce, uh D2C or uh services for sure.
36:00
SPEAKER_01: So we get them too beautiful.
36:02
SPEAKER_01: Well, tell me a bit about Enora.
36:04
SPEAKER_01: So, you know, let's just say I'm an e-commerce brand, I suspect there's fraud, and I'm looking for a solution and we decide to move forward.
36:11
SPEAKER_01: Like, what is uh what does onboarding look like?
36:13
SPEAKER_01: And kind of what is what's the process that we take together to start kind of correcting some of this uh fraudulent activity?
36:21
SPEAKER_02: Yeah.
36:22
SPEAKER_02: Well, first thing we want to do is we want to establish that we want to be a relationship with you guys for a long time.
36:26
SPEAKER_02: Like it's a one quick scan, doesn't help anybody.
36:30
SPEAKER_02: But what we do do just to see how it works is we do a free trial.
36:34
SPEAKER_02: We do a two-week free trial so we can scan your traffic for two weeks, put a number on it, tell you where it's coming from, and then tell you how we can solve the problem using our technology.
36:43
SPEAKER_02: Um, because if I find no fraud on your site, I'm a developer, I really want to solve problems.
36:49
SPEAKER_02: I don't want to sell you a product unless you're just doing it for an insurance purposes.
36:52
SPEAKER_02: That's fine.
36:53
SPEAKER_02: I want to solve a problem.
36:54
SPEAKER_02: Like if you come to me with a problem, I want to be able to solve that problem.
36:56
SPEAKER_02: If I'm the wrong solution, we'll let you know.
36:58
SPEAKER_02: But if I'm the right solution, I'm gonna show you how to solve the problem.
37:01
SPEAKER_02: So the two-week trial is important.
37:03
SPEAKER_02: Once you say yes, this makes sense, this is gonna solve the problem we have.
37:07
SPEAKER_02: Let's do business, let's sign the contract.
37:09
SPEAKER_02: Okay.
37:10
SPEAKER_02: Contract gets signed.
37:10
SPEAKER_02: First thing we want to do is do the onboarding call.
37:13
SPEAKER_02: We want to make sure the software's installed, right?
37:15
SPEAKER_02: We want to double check to make sure we're not screwing up with anything else because there's so many pieces of software out in the marketplace that interfere with each other.
37:21
SPEAKER_02: Want to make sure there's no software conflicts, everything's looking good.
37:24
SPEAKER_02: We rely on the data, everything's good.
37:26
SPEAKER_02: And then typically, um, a week later, we do a deep dive, get a training for anybody that's gonna be logging into the dashboard, train them up on the dashboard, how to do data, how easy it is to get our support.
37:36
SPEAKER_02: Our support is so easy.
37:37
SPEAKER_02: We have a less than one hour response time, one less than one hour, one business hour response time in case you're out to lunch.
37:44
SPEAKER_00: Yeah, I get you.
37:45
SPEAKER_02: Um they can just pick up them, call us, so we have live chat on our site.
37:49
SPEAKER_02: Uh, and it's our live chat, it's not a third-party live chat that feeds their stuff back into AI.
37:54
SPEAKER_02: So your stuff ends up all over the place, it's private.
37:56
SPEAKER_02: Um, so all good stuff.
37:58
SPEAKER_02: Then what we do is at least once a month for the first three months, we do another call to double check on data, make sure we do some retraining, maybe add some more new users, do set schedule some more training for the new users, uh, make sure everything's going smooth, make sure they're getting the most out of the software because if they're getting the most out of the software, they're not going anywhere.
38:16
SPEAKER_02: Yeah, they'll be clients of ours for life.
38:18
SPEAKER_02: As long as we're solving a problem, they'll continue to do that.
38:20
SPEAKER_02: Then after the three months, we switch to a quarterly uh review.
38:25
SPEAKER_00: Okay.
38:26
SPEAKER_02: They're more than welcome to reach out to us on a regular basis, but we want to at least get touch base with them once a quarter.
38:32
SPEAKER_02: If they miss or can't make it, we'll do a recording on what we found, what we see, what's going on, new trends, new rollouts, new features that we put out, whatever, just give them an update.
38:41
SPEAKER_02: So at least once a month they got our face in front of them.
38:43
SPEAKER_00: Yeah.
38:44
SPEAKER_02: And then to be on the safe side, once a week we check all our clients for anomalies.
38:49
SPEAKER_00: Okay.
38:50
SPEAKER_02: Do they have anything that's spiking up, spiking down, changing, anything that we need to be aware of?
38:54
SPEAKER_02: And if we catch something, we'll email the client and say, Hey, by the way, we noticed, you know, you had a spike in traffic or a spike in fraud.
39:01
SPEAKER_02: Um, we should talk, you know, if you want to get on the call, or at least make sure you take a look at it.
39:06
SPEAKER_02: So at least if they're not paying attention to the dashboard, they can take we catch something and we can let them know.
39:11
SPEAKER_02: That's pretty much the process.
39:13
SPEAKER_01: So it makes sense.
39:14
SPEAKER_01: So I'm onboarded, we're working together during the initial onboarding phase.
39:17
SPEAKER_01: It sounds like a lot of hand holding and education.
39:19
SPEAKER_01: How do we use the software?
39:21
SPEAKER_01: Is it after that, is it like 100% self-serve, or is it, you know, you have some alerts that let you know, like, hey, we got the spike, I get the email.
39:30
SPEAKER_01: If I don't check it, I could go in and do it.
39:32
SPEAKER_01: Or does the software automatically catch this stuff and like add them to that, you know, the blacklist for lack of a better term?
39:39
SPEAKER_02: So a lot of times when our clients get set up, it's we call RTA, real-time actions.
39:44
SPEAKER_02: Okay.
39:44
SPEAKER_02: So that this way, if a visitor walks in the door, we know they're fraud, we don't want them to fill out a form or submit a credit card.
39:51
SPEAKER_02: We can block them in real time.
39:53
SPEAKER_02: If they're if you bought that traffic from Google, Facebook, TikTok, Instagram, any one of the any one of the main players, you know, um, we can basically add them to an audience and say, do not show this, add to this audience again.
40:06
SPEAKER_02: So all that stuff is set up in real time.
40:09
SPEAKER_02: Um, I would say 90% of our clients take advantage of real time.
40:12
SPEAKER_02: Some just want to look at data and make decisions manually because that's their process.
40:16
SPEAKER_00: Sure.
40:16
SPEAKER_02: But a lot of people want our real-time actions on so they can kind of set it and forget it.
40:20
SPEAKER_02: It becomes like a visitor firewall, right?
40:22
SPEAKER_02: Once you put a firewall in place, you don't have to think about it again, right?
40:26
SPEAKER_02: But we still have the manual process of once a week going through all their um anomalies.
40:31
SPEAKER_02: If anything pops up and looks funny, we'll notify them directly.
40:35
SPEAKER_02: Uh, this year we're rolling out um uh an alert feature that will do will take it even more granular than the way we do it now.
40:41
SPEAKER_02: So basically they can get text message or emailed or slacked or something like that.
40:45
SPEAKER_02: They'll get some type of web alert so they know, hey, by the way, you just added this new new source and this new source spiked over your threshold.
40:53
SPEAKER_02: You might want to take a look at it.
40:54
SPEAKER_02: Click this link to look at it in detail.
40:56
SPEAKER_02: Cool.
40:56
SPEAKER_02: So that's common.
40:58
SPEAKER_01: And then do you guys provide guidance on those like chargebacks and helping them prove that?
41:03
SPEAKER_01: Or you're just like, here's all the data, your team should know the process, or is it like the first time you show them how and they do it, or do they hire you as a service?
41:10
SPEAKER_01: Like, how do you help them be made whole or even just attempt the process, even though it may not be successful all the time?
41:17
SPEAKER_02: Well, it depends on the client.
41:19
SPEAKER_02: So a lot of times what we'll do is they'll show um we'll show them where to go, but they have to fill out the form with their information, the stuff we don't have access to.
41:28
SPEAKER_00: Yeah.
41:29
SPEAKER_02: Google, for example, right?
41:30
SPEAKER_02: There's a form for refunds.
41:31
SPEAKER_02: Then they'll need a special report.
41:33
SPEAKER_02: Um, we'll show them how to get the report, but we'll help them get it the first, you know, the first time, second time, or as many times as they need us for.
41:40
SPEAKER_00: Okay.
41:40
SPEAKER_02: You know, I have I have some clients that we built a full reporting system in the system and they're just, hey, I need this report.
41:45
SPEAKER_00: Oh, nice.
41:46
SPEAKER_02: Yeah, and we'll just send it.
41:47
SPEAKER_02: You know, it's not a burdensome, like if it became something where they were doing it on a regular basis, we might charge we might have to charge them a few extra bucks for support for for outside of scope support.
41:57
SPEAKER_02: But most people don't take advantage of it.
41:59
SPEAKER_02: Like it just once in a blue moon, they'll say, Hey, can you run this report for me?
42:01
SPEAKER_02: I need this.
42:02
SPEAKER_02: Yeah.
42:02
SPEAKER_02: And the way our system is built, it takes two seconds to put the report request in.
42:06
SPEAKER_02: Once it's produced, we just shoot it over.
42:08
SPEAKER_02: Um, or be sitting in their account, they get an email automatically.
42:13
SPEAKER_02: Um yeah, and then basically um that's pretty much it.
42:20
SPEAKER_01: And then your system, like it sounds like infrastructurally, it's like, I'm gonna come on to you guys, you guys write the first couple weeks, you're gonna catch a whole bunch of stuff, clean it up, and then it's just those anomalies when they come up, it's catching them, adding them to the list.
42:35
SPEAKER_01: If there's opportunities to get money back in a back, if not the system moves on and the the client has peace of mind and knows that their investments are being invested as they should and not fraudulently, essentially.
42:47
SPEAKER_01: Am I summarizing that correctly?
42:49
SPEAKER_02: Pretty much like again, it's not like a uh clean up and be done, right?
42:53
SPEAKER_02: Because you're never gonna get rid of all the fraud, it's gonna constantly be coming into your system.
42:57
SPEAKER_02: Um, and we had plenty of company.
42:59
SPEAKER_02: I I we have several companies that have done this too with us before, like, you know what, I got it down, it's under five percent, everything looks good, we don't need you anymore.
43:08
SPEAKER_02: So we're canceling the contract because they want to save a couple bucks.
43:11
SPEAKER_02: And within weeks, not not even months, within weeks, they call us back.
43:15
SPEAKER_02: I need you guys back right away.
43:16
SPEAKER_02: Oh my god.
43:18
SPEAKER_02: Because that five percent is testing their system and realize, oh, you you lost your protection.
43:24
SPEAKER_02: Great, let's let's spike up the fraud.
43:26
SPEAKER_02: Oh, get out of here.
43:27
SPEAKER_02: Wow, man.
43:28
SPEAKER_02: Uh yeah, we're looked at.
43:29
SPEAKER_02: So people look for us, and when they see us, they know they can't get around us.
43:33
SPEAKER_02: They'll look to they'll just have they'll just keep pinging that site.
43:36
SPEAKER_02: And when that site stops using us and stop being a client of ours, boom.
43:39
SPEAKER_02: And they just bring the fraud.
43:41
SPEAKER_01: Jeez.
43:42
SPEAKER_01: I mean, I get it too.
43:43
SPEAKER_01: The incentives are there.
43:44
SPEAKER_01: If you're an affiliate, uh it sounds like people do it on purpose, but also sounds like people kind of fumble into it because they don't know, and yeah, and they do it to themselves sometimes too.
43:54
SPEAKER_01: So uh it's a really interesting space.
43:56
SPEAKER_01: And I've been in advertising since 2010 and mainly on Amazon.
44:00
SPEAKER_01: Which I think is a little bit different than Google and some of these other systems because it's all encapsulated, I guess.
44:06
SPEAKER_01: But it's really interesting to hear about it.
44:10
SPEAKER_01: I forgot the name of the laws, but they have like the general advertising display laws, uh, where you know what deems an ad, how many seconds of exposure before you can charge.
44:20
SPEAKER_01: Do you guys play into any of that stuff, or is that well, if you look at it, it's the IAB, which is the Internet Advertising Girl.
44:27
SPEAKER_02: Yes, thank you.
44:28
SPEAKER_02: They're the ones who spell out the size of an ad, like the creatives.
44:31
SPEAKER_02: Like they sell they do all the specs, they've been around for decades.
44:34
SPEAKER_02: Yeah.
44:35
SPEAKER_02: And they have, for display advertising, programmatic advertising, they have built a very weak direction of what constitutes a billable impression, right?
44:48
SPEAKER_02: So here's what happened.
44:50
SPEAKER_02: Um, I want to say this was probably 2010, if I remember correctly, when this started, somewhere plus or minus a couple years.
45:00
SPEAKER_02: Um, and what they did was they got together with the current IVT vendors at the time, the current ad fraud solutions at the time, and said, Let's sit in a room and come up with what we consider to be a clean ad impression.
45:14
SPEAKER_02: And because everybody was fighting about what they wanted, what they wanted, they couldn't come up with anything that was meaningful.
45:20
SPEAKER_02: So their, and I think it's still in the books today.
45:24
SPEAKER_02: In fact, I know it's still in the books today.
45:25
SPEAKER_02: I just pulled it up for a training class.
45:27
SPEAKER_02: Um, their basic thing, without reading verbatim, because it's a little kind of few confusing, it says that but to break it down in human languages basically says minimum of 50% of your ad must be in a viewable window for no less than one second to be considered viewable.
45:45
SPEAKER_02: Yeah.
45:46
SPEAKER_02: So now I did this one time.
45:47
SPEAKER_02: I took, I was talking to a large brand, and I took their ad, cut it in half, sent it to them by email, and I said, Look, because I know we weren't on a screen share like this.
45:57
SPEAKER_02: Said, I'm gonna send you something by email.
45:59
SPEAKER_02: I want you to look at it for one second or less, and I want you to tell me who the brand is.
46:04
SPEAKER_02: Or tell me anything about the ad.
46:06
SPEAKER_02: Yeah.
46:07
SPEAKER_02: And I just cut it straight in half, right?
46:09
SPEAKER_02: Send it to him, and he's looking, I go, You're looking at it for more than a second.
46:12
SPEAKER_02: He goes, I know.
46:13
SPEAKER_02: He goes, I don't know the brand.
46:15
SPEAKER_02: Oh no.
46:15
SPEAKER_02: But let me send you the rest of it.
46:16
SPEAKER_02: He goes, Oh my god, I am embarrassed, it's mine.
46:19
SPEAKER_02: Oh my gosh.
46:20
SPEAKER_02: It was that bad.
46:21
SPEAKER_02: So I'm like, so does that really good for us?
46:26
SPEAKER_02: And it doesn't say anything about fraud, doesn't say by a real person, doesn't say by it doesn't say anything to do with fraud.
46:32
SPEAKER_02: Yeah, it's just what they consider to be viewable because way back then there were a lot of attacks where they were hiding ads, you know, in one by one pixels and things like that.
46:40
SPEAKER_02: So they were trying to combat that type of fraud.
46:44
SPEAKER_02: So we came along, and and our our thing is we want our ad to be in front of a real person.
46:52
SPEAKER_02: And when we do that, viewability is 100%, conversion's at its max, more so than half an ad for one second.
47:00
SPEAKER_02: That makes sense.
47:01
SPEAKER_01: And uh Amazon does the IAB because Nudge said I remember reading some of the literature, and you're right.
47:06
SPEAKER_01: I've I always found that strange.
47:08
SPEAKER_01: It's like it needs to show up half of the page for like a second, and like that counts as in price.
47:14
SPEAKER_01: I never thought that was fair, but it's not, yeah.
47:17
SPEAKER_02: It definitely one second's not enough.
47:19
SPEAKER_02: You're paying good money,$2 CPM.
47:22
SPEAKER_02: I think is the average right now.
47:23
SPEAKER_02: Yeah, but you're paying$2 cpm for that ad to be shown.
47:25
SPEAKER_02: It should be in front of the person for a decent number of seconds.
47:29
SPEAKER_01: 30 seconds at least.
47:30
SPEAKER_02: I mean, if you buy your billboard, you at least you get 30 seconds.
47:32
SPEAKER_01: Yeah, right.
47:34
SPEAKER_01: Now we're going really old school.
47:36
SPEAKER_01: Yeah.
47:38
SPEAKER_01: All good, Rich.
47:39
SPEAKER_01: You got a lot of experience.
47:40
SPEAKER_01: This was super interesting, and I appreciate you coming on and educating me on ad fraud and the audience here uh listening to the selling on giants.
47:48
SPEAKER_01: I like to wrap up these with a final question on the future of e-commerce.
47:52
SPEAKER_01: So, Rich, I'm gonna have you pull out your crystal ball and um see if you can predict this.
47:57
SPEAKER_01: But uh, as AI-driven media buying and automation become more common, how do you see ad fraud evolving and what risk should e-commerce brand brands be prepared for now?
48:10
SPEAKER_02: Huh, my prediction is if people don't take ad fraud seriously, e-commerce will be gone.
48:16
SPEAKER_02: Wow, go.
48:17
SPEAKER_02: Because think of it this way, well, it's I shouldn't say gone, but changed very differently.
48:22
SPEAKER_02: Because think of it this way.
48:24
SPEAKER_02: You're an advertiser right now.
48:26
SPEAKER_02: Yep.
48:26
SPEAKER_02: Let's say you started getting hit with fraud.
48:30
SPEAKER_02: 10% fraud, 20% fraud.
48:33
SPEAKER_02: What percentage of fraud shuts you down as a company where it becomes no longer profitable to advertise?
48:39
SPEAKER_02: There's a number, it's a rhetorical question, right?
48:41
SPEAKER_02: Yeah, there is a number, might be 50%, might be 100%.
48:45
SPEAKER_02: We don't know, but yeah, there's some number where you can no longer afford it to advertise digitally because it doesn't make sense.
48:51
SPEAKER_02: You know, you're spending more than you're making and you're losing money, right?
48:55
SPEAKER_02: So same thing is true for the whole industry.
48:59
SPEAKER_02: Right now we're at my conservative estimate is about 22, 23.
49:04
SPEAKER_02: We always just round it off to 25% when we talk about it in general.
49:07
SPEAKER_02: But right now we're at 25%.
49:09
SPEAKER_02: This new AI that's out is gonna make a big debt.
49:13
SPEAKER_02: So, what happens if if the overall digital marketing becomes 30%, 40%, 50%?
49:20
SPEAKER_02: What number shuts down digital marketing?
49:22
SPEAKER_02: There is a number.
49:23
SPEAKER_01: Oh, there's definitely a number.
49:24
SPEAKER_02: Yeah, that's definitely a number.
49:26
SPEAKER_02: So if people don't take it seriously and start getting behind, getting in front of the fraud, it's definitely gonna drastically change how we do business on the internet.
49:36
SPEAKER_01: I don't believe it.
49:37
SPEAKER_01: Well, if that happens and we're not doing e-commerce, you heard it here first from Mr.
49:41
SPEAKER_01: Rich.
49:43
SPEAKER_01: Hey, Rich, thanks for joining us today.
49:46
SPEAKER_01: Before we wrap up, can you let our listeners know where they can find you online?
49:49
SPEAKER_01: And if you have anything exciting coming up you'd like to share?
49:52
SPEAKER_02: Sure.
49:53
SPEAKER_02: Um, I'm easy to find on LinkedIn.
49:55
SPEAKER_02: That's my uh social network of choice, RichCon K-A-H-N.
49:59
SPEAKER_02: Um, otherwise go to Enora.io, and Nora's spelled right here, A-N-U-R-A.io, and we have tons of free resources.
50:07
SPEAKER_02: In fact, when you first log first head to the website, on the very top of the page, we have the ultimate guide to ad fraud.
50:13
SPEAKER_02: Um, it's the only one of its kind that we're aware of.
50:15
SPEAKER_02: Um, it's about an 80-page report, so it goes and it's broken down by chapters, goes into different sections and different types of things, and so you can break down what you're what you're looking for.
50:24
SPEAKER_02: We also have probably a couple dozen ebooks online.
50:27
SPEAKER_00: Nice.
50:28
SPEAKER_02: Um, and then we publish probably three articles a week.
50:31
SPEAKER_02: Nice.
50:32
SPEAKER_02: Talking about different parts of it.
50:33
SPEAKER_02: So if you want to subscribe to that, you can take a look at that.
50:35
SPEAKER_02: And it's just tons of information so you can really research it and figure out what it means before you reach out to a company and say, hey, I need help.
50:42
SPEAKER_01: That's pretty amazing.
50:43
SPEAKER_01: And just so our listeners know, all that information, including Rich's LinkedIn, is going to be linked in the show notes below.
50:49
SPEAKER_01: So as you're wrapping up, feel free to click in and be sure to click on those resources and get them while you can.
50:55
SPEAKER_01: Rich, thanks so much for joining us today.
50:56
SPEAKER_01: Appreciate your time.
50:57
SPEAKER_01: Thanks for having me.
50:58
SPEAKER_01: That wraps up today's episode of Selling On Giants with Rich Conn.
51:03
SPEAKER_01: Ad fraud is one of those problems that does not just waste spend, it pollutes your data, pushes your optimization in the wrong direction, and creates hidden costs that compound over time.
51:16
SPEAKER_01: Rich also makes a strong point about where this is headed.
51:20
SPEAKER_01: As AI-driven automation becomes more common, the tactics get more sophisticated, and the brands that ignore fraud take on more risk than they realize.
51:30
SPEAKER_01: If you want to go deeper, Rich mentions that Honora has free resources, including an ultimate guide to ad fraud, plus additional guides and ongoing articles.
51:40
SPEAKER_01: We linked everything in the show notes along with Rich's LinkedIn and Honora.io.
51:46
SPEAKER_01: Thanks for tuning in.
51:48
SPEAKER_01: Please like, follow, and subscribe wherever you listen to Selling on Giants.
51:54
SPEAKER_01: It helps more operators find the show and it keeps these conversations coming.
51:59
SPEAKER_00: See you next time.