Blocking Ad Fraud Across Channels: Interview with Guy Tytunovich, CEO of CHEQ
It has offices in New York, Tel Aviv, Tokyo, and Sydney and provides a solution to safeguard businesses from the dangers of ad fraud in the digital advertising space.
Several IT unicorn leaders have joined the company’s executive team since its Series B fundraising round in November, including graduates from Sisense, Salesforce, Datorama, and Checkmarx. The company’s Series B funding round was completed in November. They’ve also been successful in securing the services of NBA legend Dikembe Mutombo, who will appear on their website as a Chief Blocking Officer.
CHEQ has a customer base of around 8000 firms, which Tytunovich claims would more than quadruple by the end of 2021 if he continues on his current path.
CHEQ’s marketing materials refer to the solution as providing “customer acquisition security” and “autonomous brand safety,” rather than emphasizing the service’s ability to reduce wasteful media spend as its value proposition.
I recently got the opportunity to chat with Tytunovich about the algorithms used by CHEQ, the company’s exponential growth, and the company’s position in the startup environment.
Which issue do you believe is more important: money waste or cyber security issues about advertising fraud? Does your experience indicate that security personnel is more interested in CHEQ than marketers on the buyer’s side?
Bots, fake users, and other malicious behavior have undermined the entire customer acquisition infrastructure of many firms, and this is a much larger problem than just ad fraud.
Budget and revenue inefficiency are unquestionably a factor, but a company that allows fictitious users into its systems will suffer from skewed analytics, tainted CRMs, broken lookalike models, and other costly issues that will hinder productivity, decision-making, and efficiency of the go-to-market team.
As a result, CHEQ attracts interest from buyers across the company, including marketing, sales, operations, business intelligence, and, of course, information security teams. The bottom line is that this is a cybersecurity risk that can only be managed through the application of cybersecurity skills such as bot mitigation, behavioral analysis, and user verification
How does your technology distinguish between legitimate website visitors and fraudulent website visitors depending on the sort of advertisement in question?
To verify that every website visitor is honest and legitimate, we do a real-time, in-depth user study on each individual that visits our site. We employ strong and sophisticated procedures since customer acquisition fraud is at the cutting edge of malicious web activity and necessitates the use of highly specialized knowledge and experience.
For example, the deployment of over 1,000 sophisticated honeypots to the user’s browser to find differences between the claimed data and the actual data is one of the methods used. We analyze user behavior both at the individual user and at the network level (suspicious traffic trends and spikes), and we employ a slew of other unique techniques to achieve maximum accuracy with the least amount of false positives and false negatives.
Another problem is striking a balance between our clients’ requirements and security and privacy regulations. That is why we have completed the two-year MRC accreditation process, which ensures that all of CHEQ’s filtering processes are effective and backed by verifiable evidence. In addition, we hold our solutions to the highest levels of privacy compliance possible.
The past several months have seen an increase in the number of senior executives you’ve been able to acquire from established high-growth software companies. Is this more likely to put you in a better position to succeed than internally promoting people?
I believe that the best method is a combination of hiring exceptional external talent while also developing and elevating talent from the inside, which is exactly what we do at CHEQ, among other things.
As a result, while we’ve been fortunate to have several top-tier executives join us from leading SaaS companies, we’ve also been fortunate to have been able to promote approximately 10% of our workforce to senior positions across Product, Research and Development, Sales, and Customer Success over the past year.
Regarding external executive talent, this indicates that CHEQ is on the right track, as it is both a testament to the tremendous faith that these leading SaaS executives have in the company and an assurance that our highly ambitious organization is in the hands of people who have previously built category-defining tech companies.
What has been the most significant shift in ad fraud in the five years since you established CHEQ?
The first thing to mention is that it has developed considerably. As late as 2017, industry-aggregated studies estimated that the cost of ad fraud was approximately $6 billion. In today’s globe, advertising fraud accounts for over $35 billion, making it the fastest-growing criminal activity in the world – which is not unexpected given how lucrative this area has grown.
However, it is not only the scale of the scam that is increasing but also its sophistication. SIVT fraud accounts for around 80% of all space fraud in the United States, for example (sophisticated invalid traffic). Daily, we deal with increasingly complex bots that are capable of filling out lead forms with stolen user identities, making purchases to facilitate chargeback fraud, impersonating human browsing and scrolling behaviors, and performing a variety of other advanced modes of operations.
This is why it has become vital for cybersecurity businesses such as CHEQ to enter the market and apply their domain expertise to address this quickly developing problem.
What is the nature of the labor divide among your four regional offices, and how have those divisions evolved?
In four important regions, we have fully functional, cross-functional go-to-market teams. Each region has a high degree of autonomy and is supported by a dedicated regional sales leadership team, customer success teams, account executives, business development representatives, sales engineers, and tier two support.
We also have the company’s primary headquarters in Tel-Aviv, where we provide human resources, operations, marketing, and financial services to the entire organization. To keep up with the tremendous growth of our customer base in all four important regions, the teams are expanding. However, the core approach has remained the same since the beginning, functioning as a pure B2B SaaS / Enterprise GTM motion.
Is it possible to avoid becoming entangled in a game of “cat and mouse” in which you are tracking down or filtering out fraudsters? To what extent does artificial intelligence (AI) assist in this regard?
Our business will always have a “cat and mouse” element to it, and that will continue. Because there is so much money to be made, fraudsters never stop working and are always devising new methods of evading detection, concealing identities, and gaming the system.
Talent and artificial intelligence work together to keep us one step ahead of the competition.
Engineers, developers, and cybersecurity researchers work together to create one of the most sophisticated and resilient teams in the industry. Their job is to constantly “stress test” our system and identify new vulnerabilities as well as mitigation strategies. On the artificial intelligence front, our ability to apply machine learning models to our specific domain is critical, as it enables us to be both predictive and scalable in our operations.