Interviews and Reviews

Blocking Ad Fraud Across Channels: Interview with Guy Tytunovich, CEO of CHEQ

Guy Tytunovich, CEO of CHEQ

Operating offices in New York, Tel Aviv, Tokyo and Sidney, CHEQ offers a solution to protect companies from the perils of ad fraud.

Following the company’s Series B funding round in November 2019, CEO Guy Tytunovich and his team have onboarded several tech unicorn leaders to its executive team, including alumni from Sisense, Salesforce, Datorama and Checkmarx. They’ve also managed to recruit NBA icon Dikembe Mutombo to appear on their homepage as a Chief Blocking Officer.

Nearly 8000 companies are among CHEQ’s customer base, which Tytunovich says he’s on pace to more than double by the end of 2021.

Rather than positioning its value proposition around minimizing wasted media spend, CHEQ’s marketing materials refer to the solution as delivering “customer acquisition security” and “autonomous brand safety.”

I recently had the opportunity to speak with Tytunovich about CHEQ’s algorithms, explosive growth and place in the startup landscape.

Do you see ad fraud as primarily a budget waste issue or a cybersecurity issue? Do you find that security officers are more likely to be interested in CHEQ than marketers on the buyer’s side?

The problem is bigger than just ad fraud – it’s about organizations having their entire customer acquisition apparatus compromised by bots, fraudulent users and other malicious activity.

Budget and revenue inefficiency is definitely one part of the equation, but a company which allows fake users into its systems ends up with skewed analytics, tainted CRMs, broken lookalike models and other costly issues which hurt the go-to-market team’s productivity, decision making and efficiency.

For these reasons, CHEQ garners cross-organizational interest with buyers ranging from teams in marketing, sales, operations, BI, and of course security. This is ultimately a cybersecurity issue that can only be mitigated with cybersecurity capabilities like bot mitigation, behavioral analysis and user verification.

How does your tech identify fraudulent website visitors differently, depending on the type of ad in question?

Our approach is to perform real-time, in-depth user analysis for every website visitor to ensure they are authentic and legitimate. We deploy robust and sophisticated methods, since customer acquisition fraud is at the absolute cutting edge of malicious web activity, requiring unique expertise.

These include, for example, the deployment of over 1,000 sophisticated honeypots to the user’s browser, to uncover discrepancies between the declared data and the actual data. We perform behavior analysis both at the individual user level and at the network level (suspicious traffic trends and spikes), and we take countless other proprietary measures to ensure maximum accuracy with minimal false-positives and false-negatives.

Another challenge is balancing our customers’ needs with security and privacy compliance. To that end, we’ve completed the rigorous two-year MRC accreditation, which ensures all of CHEQ’s filtration methods are effective, based on verifiable evidence. We also hold our solutions to the highest standards of privacy compliance.

You’ve been recruiting a lot of senior executives in recent months from established high-growth software companies. Does this put you in a better position to succeed than promoting people internally?

I think the healthiest approach is a mix of hiring elite external talent while promoting talent from within, which is exactly what we do at CHEQ.

So while we’ve been blessed to have many top notch executives join us from leading SaaS companies, we’re also fortunate to have been able to promote around 10% of our workforce over the past year to senior positions across Product, R&D, Sales and Customer Success.

Regarding external executive talent, this definitely indicates that CHEQ is on a positive path, as this is both a testament to these leading SaaS executives’ tremendous belief in the company, as well as assurance that our highly ambitious organization is in the hands of people who have built category-defining tech companies before.

How has ad fraud changed most in the five years since you founded CHEQ?

Well, first off, it has grown tremendously. Industry aggregated research had the cost of ad-fraud at around $6 billion as recently as 2017. Today, we see around $35 billion in ad fraud, making it the fastest growing criminal enterprise in the world – not surprising given how lucrative a field this has become.

But it’s not just the scale of the fraud that is growing, it’s the sophistication. In the US, for example, close to 80% of the fraud in the space is SIVT (sophisticated invalid traffic). Every day we combat increasingly sophisticated bots that are capable of filling out lead forms with stolen user identities, making payments to facilitate chargeback fraud, mimicking human browsing and scrolling patterns and many other advanced modes of action.

This is why it’s been necessary for cybersecurity companies like CHEQ to enter the space and apply domain expertise to combat this rapidly growing issue.

What’s the division of labor like among your four regional offices, and how have those models evolved?

We run full, cross-functional go-to-market teams in four key regions. Each region operates with significant degrees of autonomy and has their own regional sales leadership, customer success teams, account executives, BDRs, sales engineers and tier two support.

Then, of course, we have the company’s main headquarters in Tel-Aviv, where we provide HR, Operations, Marketing and Finance functions for the entire organization. As our customer base continues to grow rapidly in all four key regions, the teams continue to expand, but the fundamental approach has been the same from the beginning, operating as a pure B2B Saas / Enterprise GTM motion.

How do you avoid getting stuck in a “cat and mouse” game of chasing down or filtering out the fraudsters? To what extent does AI help in this regard?

In our business there’s always going to be a “cat and mouse” element. With so much money to be made, fraudsters never rest and are constantly coming up with new ways to fly under the radar, mask identities and game the system.

To stay ahead of the game, we rely on a combination of talent and AI.

When it comes to talent, we employ one of the most sophisticated and robust teams of engineers, developers and cybersecurity researchers, whose role is to constantly “stress test” our system and come up with new vulnerabilities and ways to mitigate them. On the AI front, our ability to apply machine learning models to our unique domain is key, as it allows us to be both predictive and scalable.

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