Moving Forward by Stepping Back

In April of 2005 I sat at my usual corner table at Krispy Kreme donuts in San Antonio.  It had become my “thinking place” and every few weeks I would ponder life over a couple of donuts and a cup of coffee. I was reading a series of articles on the growing problem of “click fraud”.  Our former parent company, Optimal iQ, had recently found a group of fake clicks and we were intrigued by the problem.  Perhaps it was the highly caffeinated sugar rush but at that moment, I had an epiphany.  I realized the problem of click fraud was only going to get worse and more complex.  Measure this challenge against the rapid growth of search marketing and there was an opportunity staring me in the face.

Click Forensics was born in January of 2006 through the hard work of my co-founders and our dedicated team. We raised over $15,000,000 to solve a problem, execute a plan and lead the industry.  Today Click Forensics is the clear leader in traffic quality management. Our original vision was to “help ensure advertisers get what they pay for” and today that is exactly what we do.  I’m very proud of Click Forensics and excited about the opportunity to continue to serve and improve the online advertising community.

In June of last year I made the decision to begin my exit from the company.  Click Forensics is growing rapidly and developing cutting edge technology our competitors can’t touch.  My role has deliberately been changing over the last year and I feel I owed it to myself and my family to explore “what’s next” for me.  So last week, I formally stepped back to a board of director position.  I will continue to help the company in any way I can and remain an active advisor, board member and chairman of the Click Quality Council.

As I reflect on the last four years or so of our growth, there are eight things that come to mind that I am most proud of:

1. We raised awareness about click fraud – Sure we may have ruffled a few feathers when we launched our Click Fraud Index ™ in the spring of 2006, but those numbers caused everyone to stand up and listen.  Google called us out in August of that year and dismissed the problem of click fraud as insignificant, claiming their own efforts to stop it were "reasonable".  The problem was hugely significant and no standards existed to stop it.  Something had to be done so we took the lead.  With the support of the advertising community, we “encouraged” Google to take the problem seriously and listen.


2. We brought “both sides to the table – No one wanted to talk about the problem of click fraud in 2006.  We recognized that solving this problem was in the interest of everyone in the advertising ecosystem.  We worked hard to listen to advertisers and work with search engines to develop sustaining solutions that are communally beneficial.


3. We built a bridge – In a groundbreaking partnership with Yahoo!, we built the FACTr™ system (Fully Automated Click Tracking and Reconciliation).  FACTr allows advertisers to communicate directly to the ad providers via Click Forensics.  Yahoo! led the way and by the fall of 2007, Looksmart, Google and others followed suit.


4. We saved advertisers money – Our tools and insight are effective in identifying unwanted traffic and allow an advertiser to work with the ad provider to get what they pay for.  Hundreds of customers have used our technology to find click fraud and improve their campaign ROI.


5. We led the charge for standards – Working closely with the Interactive Advertising Bureau (IAB) and dozens of online advertising companies we developed standards that were released in June of last year.  It was a team effort from Google, Microsoft, Yahoo!, Click Forensics and many others.  The result is a document that can be built upon for years to come.


6. We worked with some of the best – Our customer list includes industry-leading advertisers like Vegas.com, Progressive Insurance, Experian and EBay.  On the ad network side our clients include leaders like Adknowledge, Turn, Yahoo! and Lycos.  The relationships I have made through customers, partner companies and industry leaders means a lot to me (even Shuman!).  The online advertising industry is vibrant and growing.  Some of the brightest people I have ever been associated make this industry great.


7. We caught click fraud – We have an incredible team of scientists, engineers and developers. Many of them have PhD’s and tremendous industry experience.  We have put their knowledge to work by innovating ahead of the fast moving bad guys.  One example of this is our identification of the “Bahama Botnet”, an organized group of fraudsters using a highly sophisticated approach.  Our discovery of this (subsequently alerting Microsoft, Yahoo! and Google) saved advertisers from paying for these clicks.  Additionally, it forced the bad guys to change their approach.


8. We changed online advertising… for good – The work that we have done and continue to do is meant to have a sustaining effect on online advertising.  Improving traffic quality in real time means that publishers and ad networks can send out highly qualified clicks to advertisers and enhance trust.  This relationship, built on standards and delivered on quality, will accelerate the growth of online advertising for years to come.  We are proud to play an important part in the ecosystem.

I have enjoyed the opportunity afforded me to play a role in our company and the industry.  I'm deeply appreciative of the support, encouragement and hard work from our employees, partners and board of directors.  It's been an amazing five year ride!

And so now I look ahead.  Currently, I’m enjoying an “entrepreneurial sabbatical” to consider options and explore opportunities over the next few months.  I’m enjoying time with friends and family, traveling and learning about new businesses.  I’m keeping busy by consulting with an advertising technology company, joined the advisory board of an NBA agent firm and of course reading, writing and learning.  At some point, I’ll head back to Krispy Kreme.  There are an unlimited supply of donuts, coffee and problems to solve.  I can’t wait~

Tom Cuthbert

Beware the “Bahama” Botnet

By Steve O'Brien, Click Forensics

Just when you thought the fraudsters couldn’t get any more sophisticated … they surprise you.  Click Forensics researchers have recently discovered one of the most advanced sources of click fraud we’ve seen.  We’ve named it the “Bahama botnet” because when first discovered it was redirecting traffic through 200,000 parked domain sites located in the Bahamas.  It has since been reprogrammed to redirect through other intermediate sites hosted in Amsterdam, the U.K., and even San Jose, CA, but the Bahama name stuck.

Interestingly, the Bahama botnet appears to be closely related to the recent spate of “scareware” attacks, such as the one perpetrated against The New York Times digital site just a few days ago, reported by ComputerWorld.  Visitors to the NYTimes.com site were greeted with a pop-up informing them their computer was infected and directed to an authentic-looking site where they could install a program called Personal Antivirus.  Users duped into purchasing this phony software were then infected with a Trojan that gave control of their computer to an unknown third party that we now know to be part of a gang in the Ukraine.

We believe the Bahama botnet is controlled by this same gang, or their neighbors down the street.  More info about the “Ukranian fan club” can be found in Dancho Danchev’s excellent security blog.  We’re pretty sure the Bahama botnet is related to the Ukranian fan club and the NYTimes.com scareware because they each phone back to a bogus “Windows protection” domain located on the same IP address.

These sources were originally identified by the Black Hat community, but we believe Click Forensics is the first to discover the breadth and depth of click fraud being perpetrated by the botnets it controls.  And the botnet is incredibly insidious.

The video below shows the botnet in action, caught on film and narrated by Click Forensic’s own Matt Graham, the infected machine will exhibit some really funky behavior.  Clicks on organic search results are redirected through a series of parked domains across a number of top-tier ad providers (search engines and ad networks), eventually arriving at an advertiser unrelated to the original query.  The user is momentarily confused, but likely just performs the search again, this time with easy success.



What makes the botnet so insidious is that it operates intermittently so that the user doesn’t really know that anything is wrong.  Additionally, it can operate independently of the user because the authors appear to be building a large database of authentically user-generated search queries.

[caption id="attachment_718" align="alignright" width="500" caption="Seemingly random clicks discovered through advanced pattern detection"][/caption]

And because the queries come from many different machines (IPs) across a broad segment of the Internet population, it is very difficult to find and identify these clicks as fraudulent.  But these auto-generated clicks were not able to disguise themselves well enough to escape Click Forensics anomaly detection algorithms.  Additionally, large amounts of non-converting clicks were spotted in the data we receive from advertisers.  From there, our team was able to hone in on the source of the Bahama botnet.

Building on a Foundation of Success: IAB Guidelines

Over the past week four major players in the online media space have announced accreditation to the Interactive Advertising Bureau’s Click Measurement Guidelines.  This list includes Yahoo!, Google, Microsoft and Business.com.  I wanted to take a moment and explore why you should care about this development and what accreditation means for advertisers.

The IAB is a publisher-focused organization that has led the process to develop click measurement guidelines.  The task force is made up of thirty or so companies representing the online advertising community.  Click Forensics has been a member since day one and participated in every step of the process.

There are three main benefits for advertisers and conversely, three concerns advertisers need to keep in mind associated with the entire process.  First, the benefits;

IAB Accreditation Represents a Commitment
The process to become accredited to the IAB guidelines is time consuming and certainly not free.  At Click Forensics, we have first hand knowledge of this and can assure you that any company that takes time and spends the money to become accredited is committed to their customers.  The level of detail the auditors go in to is amazing.  Our community is fortunate to have auditors that have demonstrated a deep commitment to both the development of the process and the implementation of the guidelines.

IAB Accreditation Demonstrates Leadership
The IAB established a gating period to allow member companies and others to become accredited to the guidelines.  The companies mentioned above were the first to announce compliance.  This is important because it represents a sense of urgency among these four that enhances the urgency for others.  As an advertiser, you should reward these leaders with business.  They were first out of the gate and in my book that demonstrates leadership.

IAB Accreditation Means Better Quality Traffic
The IAB Guidelines are a lengthy narrative of “best practices” and rules in delivering quality traffic to advertisers.  While it is not intended to be a complete list, it serves as a firm foundation and includes practical steps to help ensure advertisers get what they pay for.  By working with an accredited ad provider, advertisers will be assured that the clicks they are buying have met the guidelines established by the industry.  This is a good thing and an excellent first step.

While we applaud the efforts of the IAB, Media Rating Council and member companies who participated in this process, there are things advertisers need to keep in mind.  There was a great deal of discussion and debate during the nearly three years of meetings it took to develop these guidelines.  In that process, there were a lot of valuable and important items that fell to the floor.  This is a good start, not a perfect process.  Keep in mind the following;

IAB Accreditation is a “Moment in Time” Process
The process for an ad provider to become accredited is a long one.  The auditor is invited in for a pre-assessment then the actual audit begins.  At the end of the process accreditation is awarded.  The problem is there is no mechanism for ongoing compliance.  When we buy gas at the gas station there is a meter that is routinely calibrated to ensure that when we fill our tank with 20 gallons of gasoline, we get 20 gallons.  This approach is not taken nor addressed in the guidelines.  While an annual audit is suggested in the guidelines, it is still important for advertisers to be monitoring their campaigns and holding the ad providers feet to the fire for every click.

IAB Accreditation Does Not Cover Everything
The 27 page Guideline document is quite comprehensive.  Our task force worked hard to ensure that both the guidelines are made clear and that the standard for measurement is defined.  However, when you consider that the dominant constituency in this process was multibillion-dollar ad providers, you might imagine not everything met their liking.  A few examples of chaff that hit the threshing room floor included:

Click ID – Each click should have a unique identifier so investigations can be “apples to apples”
Persistent Cookie – It’s important that ad providers can identify unique visitors to ensure they are billed for only once.
Standards for Investigation – Advertisers deserve to feel confident that they get what they pay for.  By setting an investigation format and agreeing to a timeline, ad providers can build trust with customers.

IAB Accreditation is a Roadmap
There is a Japanese proverb that says, “Beginning is easy and continuing is hard”.  There is truth in this as it relates to the guidelines.  We have begun the process.  We have released guidelines that will make the world of online advertising a better place.  Now we should look to leadership to take the next step and continue what we have begun.  The current guidelines will serve as a roadmap to the future standards.  We need to examine the items removed, listen to the community and think of better ways to ensure advertisers get what they pay for in the future.  The roadmap has been built.  Now we need to move on.

In January of 2006 as Click Forensics was just beginning as a company, I wrote the following challenge to our industry:

“Define standards for what an unwanted click looks like. We believe that there are certain characteristics or attributes that are common to a large percentage of click fraud. We are working with publishers and advertisers to agree on common ground and work together to expose it. Once this is developed it should be published so that the entire community can benefit from it.”

Today, over three years later, we have the cooperation of community leaders, the foundation of technical standards and the desire to continue to improve on what we have built.  I invite you, to join us as we build a future of ongoing growth and improving effectiveness by enhancing the process of online advertising.  I can assure you that both the Click Quality Council and Click Forensics will continue to support the work of the IAB and other industry organizations to work together to make our community a better place.  Let's not stop with the foundation.

Tom Cuthbert

Welcome Bing!

Let's face it, Google needs a competitor.  Microsoft is ready to give them a run for their money (and it's a lot of money). Last night, here in Seattle, Microsoft lit up the Space Needle to celebrate the launch of Bing.  Time will tell how big an impact Bing will have in search, but history may be on the Microsoft's side.

[caption id="attachment_647" align="alignright" width="300" caption="Browser Wars"][/caption]

As recently as 1997, Netscape had a 80%+ share of the browser market.  Wikipedia recalls the IE 4 release in October of '97..."The release party in San Francisco featured a ten-foot-tall letter "e" logo. Netscape employees showing up to work the following morning found that giant logo on their front lawn, with a sign attached which read "From the IE team." The message also read "We Love You."

By 2002, Microsoft had a 96% share.

As we say in the sports business, "Don't sleep on Microsoft".

[brightcove vid=25062206001&exp=1543292789&w=486&h=412]

Sure there will be lots of head to head comparisons between Google and Bing.  But so far, I'm impressed...

Wondering what Google has on their front lawn this morning :)

Tom Cuthbert