By Lynn Brezosky San Antonio Express News
September 24, 2015
Back in 2006, Google and Yahoo thought that they could ignore Tom Cuthbert and Click Forensics, his upstart San Antonio-born click fraud analysis company.
“They wanted nothing to do with us,” Cuthbert remembered Thursday. “They wanted us to fall off the face of the Earth.”
But by 2007, Yahoo and Microsoft had hired Click Forensics, which would later acquire and became Adometry, a company that specializes in tracking the effectiveness of ads.
Last year, Google bought Adometry for an undisclosed sum.
Cuthbert, now a speaker and chairman for Vistage International in San Antonio, an organization for CEOs, shared the story in a workshop, “Disruptive Growth: The Ten Clicks that Rocked Google.” It was held at the San Antonio office of the Association of Mexican Entrepreneurs (AEM).
Angel Salinas, who leads AEM’s workshop committee, said Cuthbert, who was his coach at Vistage, was a natural choice for one of AEM’s workshops, which aim to help Mexican entrepreneurs learn to do business in the United States.
“One of the things that we want to try to do at the AEM is provide business experiences or business cases that can help us strategize or plan better,” Salinas said. “So if we can find speakers like Tom to come and share their stories, their insights and their experiences and how to translate that into our world, that’s what we want to try to accomplish.”
Cuthbert’s tale started in 2005, when click traffic at Campbell’s Soup, a client of Cuthbert’s Web analytics company Optimal IQ, showed some strange spiking. Optimal IQ found that there was software generating fake clicks housed in the advertising agency’s server.
“Someone in the ad agency was trying to make the campaign look to Campbell’s Soup better than it was,” Cuthbert said.
Sensing this was just one example of a serious problem, Cuthbert retreated to his hangout spot, Krispy Kreme Doughnuts, to think: “How could this become an opportunity?”
He and Chuck Wall, Jason Smith, and Tom Charvet — co-founders of what would evolve into Adometry — started with some market research.
They went to a trade show on online advertising, bought a table and put a sign on it that said “Click Fraud,” just to see how much interest it attracted.
The answer was a lot.
“In our minds, that validated click fraud was a problem,” Cuthbert said. “Some percentage of Google’s revenue was not valid. And hundreds and thousands of advertisers were not getting what they paid for.”
To assess the problem without risking Optimal IQ’s reputation, they created a product under the name “Click Tracy.”
“It’s a small company at this time, we didn’t want to invest a lot of money, we didn’t want to go out on a limb to decide if this was really a big problem.”
But they had to change the name when lawyers for Hearst Corp., which owns the San Antonio Express-News, sent a “cease and desist” letter protecting the “Dick Tracy” brand.
In January 2006, they launched Click Forensics.
The pitch: By sharing data that could be aggregated to run algorithms to find anomalies, online advertisers would be helping their industry learn about click fraud and getting reports on it for free. They had a plan that was not unlike something out of a football playbook, as well as a clear premise.
“We want to help advertisers get what they pay for,” he said.
They launched the Click Fraud Network to start collecting the data.
They enlisted Alexander Tuhzilin, a New York University expert, to help determine when they had enough data to back the assumption that click fraud was wasting a significant amount of advertising spending.
They bought a domain name and started working trade show booths and talking to the industry about the problem.
“We needed data, we needed people on our side and we needed folks to help us focus on the problem,” he said.
Within seven weeks, their network of participating advertisers had grown to more than 1,000, including big-league advertisers in travel, finance and retail.
Click Forensics’ initial click fraud index determined that 13.6 percent of clicks were fake. For the $10 billion-and-growing online advertising market, that meant a lot of money lost to clicks from competitors, people paid to click and especially clicks by bots and botnets.
Six months after Click Forensics released the index, Google published a report on why Click Forensics and other “third-party click fraud auditing firms” were overestimating the problem. But the problem was getting worse, all around the world.
Click Forensics’ next step was creating the Click Quality Council, which comprised major advertisers including Progressive Insurance, Target and Expedia.
Cuthbert appeared on CNBC. Business Week published a cover story on how click fraud was the “dark side of online advertising.”
Click Forensics moved to Austin in 2007 to attract talent and investment dollars. They were things San Antonio lacked at the time and a reason Cuthbert is a founding member and board member of the city’sTech Bloc initiative to make the city more attractive to tech companies and personnel.
Venture capital poured in: $28.5 million over the life of the company. Revenue streams grew. Yahoo and Microsoft came to dinners to talk about the problem. In 2008, Google started working with Click Forensics, too.
“They eventually had to do it,” Cuthbert said. “The industry was calling for it.”
Original article: http://www.expressnews.com/business/local/article/Cuthbert-recounts-taking-on-Google-6528115.php