CHEQ helps ecommerce businesses fake out the ‘fake web’
We’ve all checked this box after selecting images of streetlights, bicycles, train tracks, animals — or any manner of random categories — on grids on our screens. In theory, it’s supposed to filter humans from fake bots, but today’s bots are sophisticated enough to bypass this kind of security.
Enter go-to-market security provider CHEQ, which was launched in 2016 to help marketing companies identify and thwart such bots, fake users, skewed data and other invalid traffic. To further bolster these capabilities, the Tel Aviv-headquartered company today announced its acquisition of cybersecurity company Ensighten.
“The ‘fake web’ is wreaking havoc on business’ bottom lines,” said Guy Tytunovich, CHEQ’s CEO. “Companies operating online at scale are exposed to huge risks and inefficiencies. It is virtually impossible to function efficiently today as a go-to-market organization when a huge portion of the traffic running your funnel isn’t authentic.”
A constant, evolving battle
An enormous amount of internet traffic is fake, automated or malicious — somewhere between 40 and 60%, by CHEQ’s estimates.
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As Tytunovich explained, this can include bots clicking on ads, bad actors taking over customer accounts, and automated site traffic skewing business intelligence (BI) and marketing analytics.
Just this past year, for instance, PayPal acknowledged that 4.5 million fake new accounts were opened on its site — likely looking to exploit $5 or $10 new user incentives.
Then there was the high-profile pausing of Elon Musk’s Twitter takeover bid — a decision that the multibillionaire attributed to bots and fake accounts.
CHEQ itself analyzed 5.2 million visits originating from Twitter to its own customers’ websites. This research revealed that only about 11.7% of such visits were bots. But, as Tytunovich pointed out, this is a conservative estimate, as it only accounted for bots that clicked on ads.
In response to ever-expanding threats, the global bot-management solution market is expected to grow from $1.5 billion in 2018 to $3.2 billion by 2030, representing a compound annual growth rate (CAGR) of more than 16%. This comes as the overall cybersecurity market is also expected to continue on a track of exponential growth — by one measure, from Fortune Business Insights, as being worth $366 billion by 2028 (well more than double its 2020 valuation of $153.2 billion).
A legitimate customer? CHEQ says think again
The impact of the fake web is immense: CHEQ research revealed that it costs businesses roughly $42 billion every year.
CHEQ, which competes in the bot-detection market with Netacea, Datadome and Cloudflare, also discovered in an analysis of more than 50,000 global websites that 470 million “online shoppers” are actually bots and fake users. These include malicious scrapers, fraudsters and account takeover bots.
Furthermore, according to CHEQ research:
32% of all organic and direct traffic arriving at retailer websites comes from invalid sources.
25% of invalid traffic comes from automated tools.
One-third of all online shoppers on the most recent 2021 Black Friday were bots.
Ecommerce sites lose $2.34 billion to invalid ad clicks.
Bots abandoning carts cost companies $5.7 billion.
Tytunovich also noted that nearly half a billion ecommerce website visitors every year are not authentic human users — thus, they do not have the intent, let alone the ability, to purchase. The most prevalent ecommerce cyber schemes include click fraud, credit card fraud, user-journey hijacking and cookie stuffing (the practice of dropping multiple affiliate cookies on a user’s browser to claim sales commissions).
“We have seen threats caused by the fake web specifically impact ecommerce businesses in a major way,” said Tytunovich. “An abundance of bots can lead to loss of customer trust, as well as private data leaks, and search visibility issues for the brand. This has become a strategic issue for retailers who want to maintain a sustainable business in the online world.”
Expanding capabilities
All this leaves marketing teams wasting resources attracting fake users, sales teams spending time and money nurturing invalid leads and firms pouring millions into analyzing inaccurate data collected from bot traffic, Tytunovich said.
CHEQ’s business mission is to help ensure that marketing funnels, sales pipelines, websites, forms, shopping carts, data and analytics aren’t being compromised by bots, fake traffic or malicious users.
CHEQ secures vulnerabilities in one central hub, and its tools run more than 2,000 real-time cybersecurity challenges on website visitors to verify legitimacy. Its technology also mitigates bots and performs behavioral analysis to distinguish between good or bad traffic.
The company has a network of more than 14,000 customers, and it performs weekly analysis of 25 trillion interactions, events and engagements to help power its algorithms and databases, said Tytunovich.
CHEQ’s acquisition of California-based Ensighten will help CHEQ expand into other vulnerable areas including customer safety, privacy enforcement and data security, Tytunovich said. Ensighten specializes in privacy compliance enforcement, customer hijacking prevention and anti-data exfiltration (ADX).
CHEQ, which acquired Ensighten for an undisclosed sum, has raised a total of $183 million in funding to date. This includes its most recent $150 million series C round in February.