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Small Business Advertisers Will Lose $15K This Year To Fraud

By Yuval Haimov, CEO, ClickCease

In a nightmare year for small businesses, reliance on digital marketing grows

While 2020 is quickly turning out to be the worst economic year since the end of World War II, it would seem like the small business sector has taken one of the hardest hits. Restaurants, bars, hairdressers, real-estate agents, and other types of businesses have completely shut down as a result of the global COVID-19 pandemic. Many of the small businesses who have managed to stay afloat are those who rely more on digital channels than on physical, brick-and-mortar locations. These are businesses that sell online and promote themselves primarily through online advertising on paid search and paid social channels. Facebook, for example, recognizing the growing reliance on digital channels, started a $100 million relief fund for small businesses, including significant ad buying credit. Google itself announced $340 million worth of ad credit would be given to SMB advertisers to battle the effects of COVID-19.

But new data shows US small businesses will lose 11% of their ad spend to click fraud 

As small businesses divert more funds to digital marketing channels, their exposure to the risks of online advertising grows too. Small businesses in particular rely less on top-of-the-funnel brand awareness campaigns and tend to focus their limited funds on bottom-of-the-line performance marketing, typically on PPC (pay-per-click) buying channels. But a recent study by Professor Roberto Cavazos of the University of Baltimore showed that PPC channels are extremely susceptible to click fraud and fake bot traffic, costing the global ad economy almost $24 billion in wasted ad spend. Now ClickCease has released new data showing that US small businesses will lose an average 11% of their ad spend in 2020 to click fraud. That amounts to $15K worth of annual ad spend losses for a single US business. These are astronomic losses for SMBs to absorb, especially in this current economic climate.

What is click fraud and why is it hurting small business advertisers?

Click fraud is the generation of fraudulent ad clicks. These can be done by individuals, by click farms, or even by sophisticated networks of bots. Why do people generate fake clicks? For a multitude of reasons. These could be other small businesses who are trying to deplete their competitors’ paid search ad spend, so that they can win the bid and be the top result on Google. This could be an affiliate site which is paid to drive traffic to a small business and is paying a click farm to click on ads so that they get paid more. These could be malicious bot attacks intending to cause all sorts of harm because a person visited a small business site and then got retargeted with ads for months on end. These could be even crawler bots that are scraping sites and landing pages for data collection purposes. All of these accumulate and end up costing advertisers dearly.

Why does this affect small businesses in particular? One obvious reason is that in times of crisis, the competitive landscape becomes so cutthroat and ad spend becomes so scarce, that many people are compelled to click on their competitors’ ads to give themselves a competitive edge. Also, the fact small businesses are moving to more online channels, itself, attracts more fraudulent activity looking to take a bite out of that ad-spend. When Google and Facebook announce hundreds of millions of dollars of ad credit for small business, you can be sure that the fraudsters are looking to pounce.

Local service providers hit hardest and COVID-19 is making it worse

Small businesses in the US are seeing more than one in ten clicks (11%) on their paid search advertising campaigns rendered invalid as a result of deliberate competitor sabotage or bot traffic. The most cutthroat click fraud occurs across the local service provider sector, as locksmith ads (71% invalid clicks), pest control ads (53%), and on-demand repair ads (44%) are hit the hardest. The main reason for this, as the ClickCease study shows, is persistent competitor clicks on high-priced keywords, designed to capture real customers.

What can small businesses do about this?

Small business advertisers should first be aware of the click fraud phenomena and the extent to which it’s hurting their business. Second, they should be looking more closely at their campaign analytics to try and monitor for suspicious activity and anomalies in activity, engagement, and conversion rates. This, of course, can become quite a complex and dizzying task, since it requires monitoring IP addresses of the users who are clicking ads, analyzing those IPs to verify their sources, comparing conversion data from different campaigns to detect anomalies and suspicious spikes in traffic, and of course blocking those IPs via the ad’s account. Businesses who want this kind of complex service done automatically and professionally should consider adopting a Click Fraud Prevention solution for protection. However, when choosing such a solution, one should make sure to not select any random vendor, but rather to look for the solutions with the best track record and reviews.

Bio

Yuval Haimov is the CEO and co-founder of Clickcease and has a strong technological background from his years serving in the IDF and the Israeli ministry of defense. He has been fighting fraud and helping SMBs achieve fraud-free campaigns for the past decade. Before launching ClickCease in 2015, Yuval spent five years as a .NET developer and team leader for Matrix, and before that was a project manager and systems analyst for IT firm High Skills and More Ltd.

Alert Logic Report Reveals Wealth of Vulnerabilities for SMBs

By Rohit Dhamankar, Vice President, Threat Intelligence, Alert Logic

When it comes to incorporating strong cybersecurity hygiene into their practices, small and midsize businesses (SMBs) sometimes don’t realize how susceptible they are to cyber attacks. They read the latest news about a big-name organization getting hacked and conclude that this would never happen to a “small fish” company like theirs.

But they are mistaken.

Due to increasingly automated attack methods, cyber adversaries aren’t distinguishing between “big” and “small” fish anymore. They’re targeting vulnerabilities, with automation that empowers them to cast a wide net to cripple SMBs and large enterprises alike. New research from Alert Logic indicates that lack of awareness may be leading to a wealth of exposures for SMBs: A clear majority of their devices are running Microsoft OS versions that will be out of support by January 2020, and most unpatched vulnerabilities in the SMB space are more than a year old.

What Alert Logic’s New Findings Really Say

These and other findings from the Alert Logic Critical Watch Report 2019 should serve as an eye-opener for SMBs. Our analysis was based on 1.3 petabytes of data from more than 4,000 customers, including data from 2.8 million intrusion detection system (IDS) events and 8.2 million verified cybersecurity events. Here are highlights from the report that illustrate the most significant challenges we found:

Digging into the Numbers

More than 66 percent of SMB devices run Microsoft OS versions that are expired or will expire by January 2020. There’s little representation, in fact, of the current Windows Server release – 2019 – among this group and the majority of devices run Windows versions that are more than ten years old. Even if not exposed to the internet, these versions make it easy for attackers to move laterally within systems once they compromise a host.

Three-quarters of the top 20 unpatched vulnerabilities in the SMB space are more than a year old. Even though automated updates have improved software patching, organizations struggle to keep up the pace. The use of open source software – a common technique for building software projects efficiently – complicates the patch cycle, especially when the open source software is embedded. To uncover and reduce the vulnerabilities left by unpatched code, organizations must invest in third-party validation of the efficacy of the update process in their software development life cycle (SDLC) while conducting regular vulnerability scans.

Security Challenges SMBs Face

Weak encryption continues to create headaches, accounting for 66 percent of workload configuration problems. Unfortunately, many SMBs simply implement a default encryption for a particular app. Defaults were typically defined when older encryption protocols were still considered safe but might no longer be. It’s not surprising then that our research found that 13 encryption-related configuration flaws are leading to 42 percent of all security issues found.

Nearly one-third of the top email servers run on Exchange 2000, which has been unsupported for nearly 10 years. Email is the life blood of most businesses, so SMBs place their operations, sales and other critical functions at risk if they encounter newly identified vulnerabilities for which there are no available patches.

The three most popular TCP ports – SSH (22/TCP), HTTPS (443/TCP) and HTTP (80/TCP) – account for 65 percent of all vulnerabilities. Internal security teams should regularly scan ports to determine weaknesses and firewall misconfiguration issues, as well as whether unusual, possibly harmful services are running on systems. In addition, they need to close ports that are no longer in use; install firewalls on every host; monitor and filter port traffic; and patch and harden any device, software or service connected to ports.

Half of systems are running a version 2.6 Linux kernel, which has been out of support for more than three years. There are at least 69 known vulnerabilities for this kernel level, with many relatively easy to exploit. Kernels serve as the heart of an operating system, managing hardware, memory, apps, user privileges and an assortment of other key functions/components.

What to Think About Next

An obvious answer for SMBs is to inventory their cyber ecosystem and replace systems that have outlived support. But this is impractical for many. Resource constraints and inability to scale often prevent SMBs from upgrading and they struggle to apply best practices in patching, hardening and cyber hygiene. These organizations don’t have to go it alone, however, and can partner with security providers who offer strong but cost-conscious options to provide needed threat visibility, intelligence and security and compliance experts. With this support, SMBs can better defend existing infrastructure while addressing security challenges that occur during upgrades or migrations to the cloud.

Bio
Rohit Dhamankar is vice president of threat intelligence products at Alert Logic. Dhamanker has over 15 years of security industry experience across product strategy, threat research, product management and development, technical sales and customer solutions. Prior to
Alert Logic, Dhamanker served as vice president of product at Infocyte and founded consulting firm Durvaanker Security Consulting. He holds two Masters of Science degrees – one in physics from The Indian Institute of Technology in Kanpur, India and one in electrical and computer engineering from University of Texas – Austin.