This small Middletown company fights big ad fraud cybercriminals

If you’ve ever run an online advertising campaign, you’ve probably seen it happen: Your ads are getting a lot of hits, but few to no conversions. It could have been that the campaign wasn’t effective enough — but, most likely, your campaign, like many others, was a victim of a lucrative kind of cyber fraud.

How lucrative? According to a 2019 Juniper Research study, advertising fraud is a $42 billion industry and growing.

For those who haven’t run ad campaigns before, here’s how this kind of cyber fraud generally works: You fund an ad campaign, for example, through Google Ads, and agree to pay websites and apps that display your ad on a per-click basis. Your ad lands on a fraudulent website, or even a legitimate website that uses fraudulent tactics, and your ad gets thousands of clicks. Unfortunately, it’s getting clicks because the website uses an illegal service where bots — or, sometimes, low-paid humans working for “click farms” — to click the ads for the sole purpose of a payout from you.

Your return on investment (ROI) plummets. In some cases, businesses have gone under due to ad fraud. And it’s not as easy as just dropping online advertising to avoid it — especially during the COVID-19 era, when ecommerce has become the lifeblood of many companies and ads are a necessary component to drawing in customers.

Rich and Beth Kahn, cofounders of the Middletown-based Anura, noticed the suspicious pattern back in 2005, when click fraud was in its infancy and they owned an advertising company. They started to look for ways to mitigate this growing brand of cyber fraud.

“They really had a grip on it before anyone,” Adam Kaminski, digital marketing specialist for Anura, told Technical.ly. “Many people are what we call ‘unaware Adams'” — business owners who don’t recognize what’s happening as their ROI diminishes.

Using artificial intelligence and machine learning, Anura’s new cybersecurity tool monitors client web assets 24 hours a day, identifying fake and suspicious clicks and mitigating it by deploying actions like blocking IP addresses.

“It’s a fraudster’s dream right now,” said CEO Rich Kahn. “There are no laws on the books against it.”

The goal, Kaminski says, is to reduce ad fraud to one quarter of all clicks. Which shows just how prevalent and hard to prevent this type of fraud is.

“One tactic is domain spoofing,” said Kaminski. “Basically someone sets up an IP address, sets up four other machines in the same room, but the machines are registered in Europe, South America, Canada, so we really can’t trace it all the way back to an individual. But we can recognize that these IP addresses need to be monitored.”

The product has been successful so far: “We have clients everywhere,” Kaminski said. “We’re not in the booming metropolis down in Middletown, but we get the job done.”

Why Middletown?

“I ask [the founders] that all the time, because they’re from New York,” said Kaminski, who was born and raised in the Middletown area.

The answer is simple: “They settled down here with their family because they love it. “They were advertisers and they found a real-life problem that they wanted to mitigate, and have been tackling it ever since.”