Husband and wife team, Rich Kahn and Beth Kahn are the proud Co-Founders of Anura — an ad fraud solution designed to improve campaign performance by accurately exposing bots, malware, and human fraud. With more than two decades of experience in running digital marketing companies (including a company that made the Inc. 5000 list five years in a row), Rich and Beth have developed an extensive understanding of digital marketing and how to deal with ad fraud. Join host Shawn P Neal as he dives deep with Rich and Beth about ad fraud, company culture, and growing a business.
Shawn P Neal:
I found out through all the channels of the internet that you two were high school sweethearts.
Rich:
Correct.
Shawn P Neal:
How do high school sweethearts end up owning, what, two businesses together?
Rich:
Yep
Shawn P Neal:
How did that all start for you guys?
Beth:
We started EZanga together over 20 years ago because Rich was working another business and he was working practically 24 hours a day, seven days a week. And it was driving me crazy that we weren't reaping the benefits of him working so hard. So I one day said to him, you know, we should start this on our own. He says, okay. I said, all right. He says, let's do it. And then it was like, well, how do I make a website? And then he put the website together. It was like, well, how do we get advertisers? And then he went and put the advertisers together. So it was mostly Rich starting…
Rich:
Let’s put it this way- she dragged me into it, to be honest.
Beth:
Yeah.
Rich:
Initially we took five grand out of our personal checking, put it into a business account. I said, okay, start up the company. And like she said, every step of the way, like how do you do this? How do you do that? What do we do with this? What do we do with that? So she dragged me into the business, thankfully. And that's how we got our first big internet business together off the ground.
Shawn P Neal:
Yeah. And so once you kind of broached that topic of being business partners as well as domestic partners, how do you separate the two? How do you go from working in the office all day to now we have to deal with family matters, and keep them separate.
Rich:
You don’t. You don’t.
Beth:
The only place, yeah… The only place that the business can’t be is in the bedroom. Otherwise, there's no separation, you know.
Shawn P Neal:
Yeah,
Rich:
Yeah,
Shawn P Neal:
That makes sense.
Rich:
it's like, you know, the average couple gets home from work and what do ya do? “What'd you do at work today?” We do the same thing because we work on opposite ends of the office. So there's times where we see each other for lunch and that's about it. And so I want to find out (what’s going on) with all the departments that she's running. She wants to find out what's going on with the departments I'm running. So we still talk about work that way. But we always tell people, it's like a couple that works together either grows together or grows apart.
Shawn P Neal:
Sure.
Rich:
We just happened to luckily grow together. And I couldn't imagine working without her.
Beth:
Awww… See, I still love this guy.
Rich:
Brownie points.
Beth:
35 years and I still love this guy.
Shawn P Neal:
Yeah, I love it. I love your story there. So which one of you handles kind of the day-to-day and which one of you is the more in-depth, this is what's going on for our customers?
Rich:
I typically focus on the development of the software since I was the original developer on the software and the sales side and Beth is pretty much running the rest of the company. So she'll do the day-to-day finance, operations, human resources, marketing… So she gets she basically does all that.
Shawn P Neal:
Lots of hats to wear, huh, Beth?
Beth:
You know, starting up a business, we wear a lot of hats. I think any entrepreneur has to do that because A) you have no money when you're trying to start this business and you're trying to get so much accomplished. But, you know, over the years we've kind of learned what lanes we do best in, you know? And every once in a while, when one of us tries to cross the other lane, it's usually a quick argument and a “get back in your lane.” I think we've always been able to separate, when we have to, the emotions of running a business. Most important, it's always togetherness, family.
Rich:
One of the things one of our family members told us one time is that he was working in the auto industry and they worked like 12 hour days, seven days a week, every holiday. So he never saw his kids as they were growing up. He says, so whatever you do, you want to make sure you make time for that. So I always took that to heart. And as we grew the business, we always made sure we were at every practice. You know, I was the father that was on all the trips as chaperone. You know, the two of us would coach different teams. So we always made (time). Of course we would work until nine, 10, 11 o'clock at night on the business, but we made the time in our business available so that we wouldn’t miss all the important stuff of the kids.
Shawn P Neal:
I think that this is a great place to dive off, because one of the things I saw on one of your other businesses was you referred to, or it was referred on the website, as introducing “the parents of the company,” which was you two. And I want to talk about that for a minute because that really, I think, speaks heavily to your leadership and your values when it comes to leadership. That you kind of refer to these businesses as equally important as being one of your children. I just wanna know a little bit more about what that does for the culture of the business and the people that are working there with you, when you really are able to look at this as family and embrace it as something that means that much to you.
Rich:
I'll give you an example, an off the wall example. When Beth and I disagree, we have an office of about 8,000 square feet, people know. And then the common phrase going around the office is, “mom and dad are having a fight.” So even though we're not the oldest people in the company, we're still referred to as mom and dad in the company, running the company. We have certain perks and stuff like that that focus around culture. Like we have somebody who's got a young child who's in daycare and all of a sudden there's a problem with daycare, you know. All of a sudden they’re having coughing and this individual was kind of tossed because, you know, in his other positions when stuff like that came up and he had to leave the office, he got reprimanded or fired because of it. In our company, we’re like, “No,No… go take care of your daughter.” You know, business will be here when you get back, just go do what you got to do and then come back. We cultivate that. Now, there's obviously, there's the once in a while situations that pop up versus every once in a while we get an employee here who thinks they should be off twice a week. That's a different scenario, right? But we want to basically, like if it was my child that was sick at daycare, I'm leaving, right? So my employee's in the same situation. They have time off and everything else to account for, but don't worry about (it); our time off policies are, you can take an hour off if you need. So this way, if you had to run to a doctor's appointment, you had to run to go take care of your child, or you wanted to go to the parent teacher conference at three in the afternoon, we account for that, we allow for that. And if they're out of time, let go. Don't worry about it. So there's that fine line between the employees that take advantage versus the employees that appreciate stuff like that because a lot of our vacation schedule was built off of the school schedule. Because we want to be home with the kids because the kids were home and we didn't want to leave the kids home by themselves all day. So actually, our schedule was always based on a school calendar. So we have quite a few holidays off that most businesses don't just because that's when kids are usually home. So it's kind of how we promote it within the company through the perks and through our actions, we pretty much promote the family first motto in the company.
Beth:
I think it's important- culture is a big thing here. So we have core values and we live by our culture. So we hire to our core values and what we tell people in our culture is true: What you see is what you get. So I always tell everyone that you have to love where you work. Now you don't have to love it every day, but you're leaving your life to come work here. So you have to like where you work. And when you come here, I don't think people need to shut off what's going on outside their lives. And that's, I think, the aspect of the mom and dad, because being a parent of young adults at this point, and adults, it's always like, well, what's going on at home? So we hear when kids are sick, kids are causing a problem, problems in the relationships, older adults having problems, dating. We hear the good, the bad, and the ugly, and we're able to be supportive that it's okay to come into work. You're having a bad morning because your kids got off school late. The dog destroyed something. Like come in and tell us about it, you know, and then we'll help you kind of just take a deep breath. And then let's get to work, you know. Because when you get home, the mess the dog made is still going to be there. Your kids are still going to need your attention. But we still need you to work. So we kind of have it like be authentic, be who you are. It's okay to share. You know, sometimes it's easier to come into the office and be like, Oh, my God…. the school bus was late, I got a flat tire, I ran out of gas, you know, this, this and this, you know. My mother-in-law called, she needs X, Y and Z and I'm spent, I don't know what to do. And I think that's how we treat the employees. We're very personal. We bring the employees to our house. We go swimming. We have mental health days, we call them, where everyone comes to work and is like, you know what, let's just go bowling today. Like, let's just do something. Let's go to a movie. you know. Let's go have a barbecue. Let's just go sit in the pool. Let's just let everybody just take that day together. And, you know, it works for some employees. It doesn't work for others, but it's the way I would want to be treated. So that's how basically we treat our employees.
Shawn P Neal:
We talk about retention and how people connect with their employers. Have you had the same employees? Do you have good retention with that, do you feel?
Rich:
The first company we started was in 2003 and our second employee that we hired was with us up until a couple years ago. So he was with it for 14 years, left, went to another company, found out he was miserable and called us back and now he runs a San Antonio office for us. Our Chief Product Officer have been with us for 13 years, our head of IT, Compliance…
Beth:
14 years.
Rich:
Yeah, we've had several employees that have left and came back. So our average tenure, and we have a lot of new people because we're growing again as this company is hitting certain milestones. But I think our average tenure is probably six or seven years based on the average.
Shawn P Neal:
That's really good.
Rich:
So for a startup, it's not bad.
Shawn P Neal:
Yeah,
Beth:
Yeah.
Shawn P Neal:
Absolutely. What you cover in the business is an incredibly wide topic when we talk about ad fraud. And I don't know that people necessarily understand what is all contained in that umbrella. So can you just, either one of you whoever wants to grab this, just kind of give us an overview of what ad fraud looks like and kind of what the day-to-day things that people are encountering that they may not be aware of when it comes to ad fraud.
Rich:
It's funny because when you bring up the word ad fraud, a lot of people don't know, you know, what ad fraud is and that's understandable. So when you talk about fraud, they think they know what it is, but there's so many different levels of fraud. And I know, cause Beth and I were running our Google advertising campaign. And if you advertise the word fraud, it's like marriage fraud, housing fraud... I mean, there's so many different kinds of fraud out there. It's crazy. We talk about specializing in ad fraud, which is basically if you're online and you’re spending money through any digital marketing channel: affiliates, email marketing, ping posts, lead generation, display clicks, Google, Facebook, et cetera, et cetera. Doesn't matter where. There's, there's fraud there. On average,1 in $4 spent on advertising has lost a fraud. So just to give you a little scale, last year, as a global society, we tipped over $500 billion in digital marketing spend. And it's been estimated that over a hundred billion dollars was lost last year to ad fraud. So that's the area that we talk about and we focus on, because it makes sense, right? If you're losing $50,000 a month to ad fraud, and you can solve that for a few bucks, it's a very worthwhile product to get. But our software does a lot more than that. It really answers one simple question: Is the visitor that's interacting with my site, my app, my mobile device, real or fake? And they gotta know that in real time, and it's gotta be accurate. And based on that we can actually plug into a lot of different scenarios, but the one that makes the most sense Initially is the advertising fraud. But we protect game gaming companies, Sweepstakes companies. We protect opinion companies like survey companies. It all depends on what the intelligence they need and when they need it.
Shawn P Neal:
We're talking to big category here. So just pulling out of the bucket. Ad fraud might look like a Google pay-per-click ad that I'm seeing an unrealistic uptick of clicks and on my side, I'm looking at that data and I'm going, okay, we're getting good response from our keywords. On your side, you're looking at that and saying, are those authentic? Is that, is that a fair way to wrap that up?
Beth:
I think you're missing one step of that. You're seeing an increase in clicks and you're thinking your campaign is working, but at the real end of the day, are you converting?
Shawn P Neal:
Yes, yes.
Beth:
So that's what you're seeing. We're able to see where those clicks are coming from and is it a real person or not clicking on your ad.
Rich:
So think of it this way. Let's say if you had, and since you're using Google and that's one of the biggest ones out there, let's stick with Google, right? Let's say you're using Google, and you're using Google search, which has got about an eight to 10% fraud rate. So let's say 90% of your campaign is reaching real people. It's got a certain conversion value, it might be a 2% conversion rate, right? Meanwhile, the other 10% of those visitors that are coming to your site are bots, or human fraud firms, and they're never gonna convert, right? So, that really just lowered your ROI across 100% of your spend. Now imagine if you can identify accurately that 10% of the market, eliminate it so that your budget is going to real people, it's going to give you a bump in conversions and increase your ROAS.
Shawn P Neal:
Wow. It's incredible for the small business owner, but when you start to get into large, large ad spending, that is saving millions, I would assume, annually.
Rich:
Didn't we just, we just figured out, I thought I came up with a number. We actually figured out a number roughly how much we were saving customers a year. It was pretty substantial. I wanna say it was in the billions. Based on our client base, based on what we're identifying, fraud based on average numbers and stuff like that. We were able to come up with some numbers and it was pretty staggering how much #fraud we were able to identify and help customers eliminate. I don't know what the average client in the market landscape at that $500 billion a year spending we should probably pick up on. But you know, a lot of clients are spending 50, 100,000, one million, 10 million, 100 million a month in marketing. And if you just understand that, depending on the channel they're buying, if the average is 25%, how much money they're losing and how much of a big impact that can make to the bottom line.
Beth:
Yeah, I think people miss the intangible aspect of it. Like your brand reputation. We always tell people, it takes years to build up your reputation, right? It'll take seconds to destroy it. The internet never forgets. So if people are writing things, if you're making these phone calls and people didn't consent to having these phone calls, eventually people are gonna start complaining. And bad news spreads fast. It's like a wildfire, you know. And the other things I don't think people take into consideration with fraud, they just think of like, you know, the immediate effect, like, you know, I'm losing 25% to add fraud. But what about hiring a salesperson and that salesperson is calling leads or calling someone or reaching out and not getting anybody or getting told I didn't fill this form out. Not getting a person. Not getting the right phone number. What does that do? Morally and mentally on salespeople, they're gonna leave. And as a business owner, we know that hiring an employee is far more expensive to hire, train, and replace than it is to maintain and keep happy. And I don't think that a lot of people, they think of ad fraud, they don't even think of those aspects of it. Think of the intangible aspects of it, your employees and your reputation alone.
Shawn P Neal:
Yeah. But as, as you're talking, I mean, it's very clear that this impacts so many different points in the business. I want to talk a little bit about how you go about staying on top of all of the fraud that's happening. Because I know, you know, we've got AI. I was just on the site, you know, I'm seeing blogs about AI and things that are happening in that world. How are you able to stay up on everything that's happening and keep that curtailed as we go into the future so that your clients can just rest assured that things are being taken care of?
Rich:
Sure. So first off, we've been developing this software longer than I think anybody else in the industry. We've started the original project in 2005. I wrote the first couple of versions of it and started a process because we had another company, we're trying to protect our own traffic and nothing existed at the time. So I developed the process using a rudimentary machine learning algorithm that basically watches the internet. you know, and watch the unit that we have access to based on all the traffic that we have coming into. And at our heyday, I think we had, billions of visitors a day that we're able to see.
Shawn P Neal:
Wow.
Rich:
So what happens is when fraud first comes out, but we have at least the way we've seen it, they go and test their solution out in different areas. And as they test their stuff, it's small, small number of clicks- maybe 1000 clicks, you know, 2000 clicks- very small amount. Our machine learning, if it comes across our network anywhere that we have access to, picks up on that. It's a red flag to our engineering team. Our engineering team jumps on it right away. Identifies what it is. If it's something that we've already protected against they can mark it in the machine learning and say okay, we know what this is. It's good. If it's something new then they can investigate come up with an update or a new rule heuristic for it. Roll it out and get it out before it becomes a major impact. Because again, a lot of these fraudsters are very intelligent. You know, you got intelligent people and you've got tens of thousands of them around the globe trying to defeat all the systems that exist out in the marketplace. When we catch what they're doing, we can stay ahead of them by basically catching it early before it becomes a massive problem. And then that's how we can stay on top of it. We also get a lot of feedback from our clients. Clients give us huge feedback, because look at it this way. I use one of our clients, they're a gaming company. And so what happens is we're there to protect their login. They wanna make sure bots and human fraud forms are not logging into their system for a variety of reasons. But they wanna protect that login. We get to see that visitor for a split second. They come in, they go to login, hit go, and we have to know right then and there, are they real or fake? Meanwhile, the gaming company has all this gameplay, all this user behavior, all this rich data behind the scenes. Our data has to be able to capture that without having access to all that data. So sometimes, you know, maybe something new is starting to pop up. We might get some insight from that client to say, “Hey, something new is popping up. I'm not sure what it is. Here's some information.” And then our team goes to town digs there to see if that's something new that might be popping up. So we have a variety and those are just two examples of how we look at new levels of fraud coming into the market and how they end up on the Chief Product Officer's desk for review.
Shawn P Neal:
Yeah, that's interesting. And Beth, I want to pay some acknowledgement to some of the things that you were talking about there with brand reputation and things like that we don't necessarily think about. As you look into the future and you get your crystal ball, your globe out, what kind of things can brands do proactively now that will help protect that identity, that brand affinity, in the future. In other words, you know, like connecting to a company like yours and being able to say “we are protected by,” What can they do to make sure that they're ensuring that their brand reputation is secure as they go into their future.
Beth:
Well, I think the most important thing for any company is to be proactive and be engaged. So when people give a good review, acknowledge that you received the review online. When people give a bad review, or if you send out a survey and they're complaining about something, get on it. Find out what the problem is. Don't just take it and then internally say, okay, how do we fix this? Get in contact with the person who made the comment or who is speaking and say, “Well, what is the reason that you're having this complaint and what can we do better,” and go and fix it. So stand behind what you say. I don't think there's anything you could do because there's always gonna be evil people in the world and people who wanna make you feel better. And I don't think I can say this on a podcast, but people are very brave behind their keyboard. I think I’ll put it that way. Yes, so we always laugh because it's very easy to type something up and to stay that. But it's a lot harder to face somebody or to talk to somebody and say, “listen, I have a problem with this because...” I think for any company, it's proactive to stay in contact with their clients and their potential clients, answer questions, stay engaged, monitor your brand, monitor your social sites, monitor the internet of what's coming out. And quite honestly, i]f you see it and don't react to everything, find out why someone would make a comment. So that's basically my thing. I mean, we're never going to stay ahead of this. I know that freaks people out. AI is coming out there, and it's faster than any human could prevent. So I think you have to ride the wave with it. So just stay involved, stay engaged, and stand behind what you say. Do what you say, say what you mean. You know, that's basically my take on it.
Shawn P Neal:
Yeah, and I really appreciate the fact that Anura, with that security that you're able to provide, we know that we're addressing actual complaints, we're addressing actual things, not a bot generated, whatever that at the end of the day distracts us and takes time and money away from, you know, actually addressing real issues. So I think that that's important to note as well. I would love to get a glimpse into the future with both of you. Where do you see Anura and maybe both of you going in the next 5 years? What are the big plans on the horizon? What kind of things can we expect from you two?
Rich:
We're just in a growth mode. And our product is very educational, because a lot of marketers might turn around and look at their data and go, something's going on. They don't right away jump to the Google and say, I need an ad fraud solution. In fact, the word ad fraud is searched, I think it's 100 times a month on Google. So that's not the term that they use. So, you have to be creative and like trying to, you know, when we're trying to find people that have these problems, we have to understand the problems that they're running into in order to be able to apply that to our Google campaigns and our advertising campaigns. But as we continue to educate the market, I read a report that said by, I think it's 2030, the ad fraud detection market will be a $9 billion market cap. So we're nowhere near that yet. So there's huge amount of growth and potential because there are a lot…. I always talk about this when we talk to customers that there's probably 75 to 100 companies out in the marketplace that do some type of fraud detection right now. What I tell clients to look for is, if you're big in the advertising space, you look at the MRC, which is the Media Rating Council. About 12 years ago, they actually understood the basics of the ad fraud detection market, and they created a set of standards, which they update every quarter. And there's only eight companies that are certified to follow those standards. So when we talk about the education portion, we're trying to educate people on best practices, how to do things the right way, because there are some competitors in the marketplace that when they flip a switch, they're blocking a good percentage of real people. So in fact, I'll give you a quick story on that. I know there's a little bit on tangent, but I talk on tangents, this is how I am. We have one of our marketing people who was trying to buy something off of a fashion site, I think it was a fashion site. And she got to the end and she was trying to submit the order and it wouldn't take the order. And she believes, and I bet she's right, some type of fraud detection that they were using mismarked her as fraudulent so she couldn't buy the object. She tried a couple different ways and couldn't do it then she left went to the competitor and bought the product. So for us it's really in order for our growth to happen over the next, say, four or five years we have to amp up our education. So Beth has been running the marketing team. And recently we hired Sherrii, which is our Director of Marketing, to focus on that education, focus on the market education that we can so that we can grow as a company. But for us, I see a lot of growth. You know, five years for us is hard to look at. We're a bootstrap company. We've been bootstrapping for the last 20 years together. So what we look at is, you know, day to day, week to week, month to month, quarter by quarter, you know, predicting five years out-that's something we normally do.
Beth:
Rich is trying to tell you in a polite way because he doesn't want to say this. Where do we see ourselves in five years? Rich, get on the damn highway. He's always going to take a detour. We would like to be acquired or maybe pull on some funding so that we are a household name. That if anyone's going to advertise on the internet, they know that they need an ad fraud solution and we want to be that ad fraud solution. And that is what our goal is. We doubled in size last year. We grew 72% last year. We're on trajectory to grow 100% this year. You know, we'll probably double our employees again by next year. And, you know, we're going to start, I don't want to say passing the torch over, but relying on more people to get it done, because more people means going further. Personally, we are hoping for the grand babies. And I don't know how many more times I could say that, but I expect a bundle of joy to be in our arms by…
Rich:
…this time next year.
Beth:
summer. Yeah, so.
Shawn P Neal:
So if any of your children are listening right now.
Beth:
Oh, do you see my empty picture frames? Those are for my future grandbabies. The kids got moved…
Rich:
See, I'm still focusing on the ones we have right over here.The baby factory is closed.
Beth:
The baby factory has shut down.
Shawn P Neal:
Well, I'll tell you what, I will definitely make sure that we plug, if any of the kids are listening, I'm doing it right now: You just heard what mom said.
Beth:
Right. Get on that for us.
Rich:
They all know…
Shawn P Neal
You two are an absolute pleasure to talk to. I wanna thank you both for the work you're doing and for being guests on this show today. Hopefully we can come back and connect again soon.
Rich:
Appreciate it.
Beth Kahn:
All right, awesome. Thank you.
Intro / Outro 22:39
That brings us to the close of this edition of Innovate Marketing. We're glad you tuned in. Innovate marketing is brought to you by MyPodcast.Media. MyPodcast.Media produces podcasts for brands influencers and nonprofits. Find us online at MyPodcast.Media. Your producer for innovative marketing is Beth Fried. Executive producer Shawn Neal and your host is Sherry Peak. We'll see you next time. Be sure to tune in...
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