Rich Kahn, CEO and Co-Founder of Anura, is driven by a mission to help businesses grow by eliminating digital ad fraud that silently siphons marketing budgets. A lifelong entrepreneur and developer, Rich is passionate about ensuring that advertising dollars reach real users—not bots, malware, or human fraud.

We explore Rich’s journey from launching an early digital advertising platform to uncovering widespread fraud that threatened his own business—and how building an internal solution eventually led to Anura. Rich breaks down his Ad Optimization Framework—Minimize Fraud, Optimize Conversion, Refresh Content—and explains why fraud must be addressed before any meaningful optimization can occur. He also shares how ad fraud impacts ROI, why lifetime value matters more than cost-per-click, and the conviction required to build and scale a SaaS company in a crowded market.

Good day, dear listeners. My name is Steve Preda, the Founder of the Summit OS Group, and the creator of the Summit OS Business Operating System. And today, my guest isa Rich Kahn, the CEO and Co-founder of Anura, an ad fraud solution that monitors traffic to identify real users versus bots, malware, and human fraud. Rich, welcome to the show. 

Thanks for having me today.  

Well, it’s super interesting business you have and the entrepreneurial journey. So let’s start with my favorite question. What is your personal ‘Why’, and how are you manifesting it in Anura? 

My personal ‘Why’ has always been to help people. Fraud is a huge problem. And it’s no longer a question of if you have fraud, it’s a question of how much fraud you have. And I’m watching people spend millions and millions of dollars on digital marketing and getting it siphoned out by fraudsters with bogus traffic. So the ‘Why’ is that, in all the businesses that I’ve done,

I’ve wanted to help people grow their business. I want to help people grow their staff. I wanted to help people grow, just in general.
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Yeah, definitely. And until we talked, I was not aware that fraud is rampant, especially in ad spend. It didn’t occur to me. And I kind of wonder why this is happening. But tell me how you found this problem, and why do you want to solve this, and how did you get to this point to launch a company about it? 

Well, in 2003, my wife and I launched a digital marketing firm. Think of Google, but really small. So it’s text-based ads you can target by keyword, bid price, geography, audience, like it had all these targeting criteria. We launched it in 2003. By 2004, we had a nice, stable list of clients, but we started getting some complaints about the traffic quality. Something wasn’t right. And I’m a developer, so I started looking at the code and realizing, looking at all the analytics and the data, and realized that it was bad traffic, it was fraudulent traffic. So I figured, you know what?

I don't want to solve fraud. I want to go out, buy a fraud solution, bolt it onto my platform, and just continue doing my business.
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Kind of like buying McAfee for your laptop. You just buy and let it scan and do its thing. But in 2004, it didn’t exist any fraud solutions. In fact, the first commercial available fraud solution didn’t start selling until 2008 or ’09. So I was a developer, and I said, we’re going to lose our business if I don’t do something. So I figured it out I’d build it myself, and we did. I wrote the software. It worked great. We had to continue evolving it as fraud evolved. And it got to the point where we started having clients ask—if not beg—to use our software outside of our network. And that’s when we kind of got the idea that this might be a good tool to sell by itself, as opposed to baked into our platform. And that’s where we launched it, in 2017. We ended up launching a Anura as a standalone solution. 

Wow. I mean, it’s definitely, if this is a big problem, it’s going to affect everyone who advertises. So it could be hundreds of millions of people. How can someone even make money with fraudulent traffic? How does it help them to make money?  

Well, what happens is internet advertising fraud is not illegal. There’s no law that says you can’t do it. So if you do find somebody that’s doing it, it’s really difficult to prosecute them in the U.S. But a lot of it happens overseas, so it’s even worse. There’s a lot of countries that allow all kinds of stuff. So basically, what we focus on is that their job is to try to make money. And I read an article one time from another company that was doing stats on fraud detection. They said the average fraudster—and this is why they do it—makes $5 million a year.

But how? 

There’s a lot of different ways. It depends if they’re buying from Google, Facebook, DSPs, or affiliate marketing. But I’ll give you a simple example. One example, which is affiliate marketing. A lot of companies use affiliate marketing. I think it’s a $20 or $30 billion industry at this point. It’s a big market. So what happens is, right now, you or I can go to Amazon and sign up for their affiliate program, and every time we send them a new client, they’ll give us 5% of what they spend. So I’m getting paid on the spend, right? So what if I sent fake users there? I’m not going to get paid for anything because they’re not spending money.

But what if I’m the fraudster? I use stolen credit cards to make those purchases. So if the purchase gets made and shipped, I get 5%. Affiliates usually get paid net 7. So I get paid net 7, somewhere across that month, maybe the next month, the person whose credit card was stolen says, “Hey, wait a second, I recognize charges that don’t belong to me.” And then the investigation starts and takes months before it comes back to Amazon and says, “Oh, you shipped out a product to a fraudulent credit card. You’re not getting paid for this. We’re taking the money back.” But by then, they’ve already shipped the product, so they’re out the hard cost of the product. They’ve already paid out the affiliate. The affiliate has already been paid. The affiliate can continue to do that for weeks, knowing that it’s going to take months for them to get caught. Once they get caught, they just set up another account. And what they’re doing is making those affiliate margins. So if they spend a hundred dollars, they make five. If they create dozens and dozens of accounts, you can quickly see how they can make a lot of money in a short period of time. That’s just one example. 

Yeah. That’s very interesting. Very interesting. So, okay, that’s really cool. So you basically help people not have the fake traffic. So whatever traffic they have, it’s real. So they pay real prices for real value. That’s got to be a significant improvement in advertising efficiency. What is the kind of improvement that you see on average happening for people? 

On average, it’s 25% improvement. So 25% of the marketing dollars that they’re spending is fraudulent. Now, if they buy from like Google and Facebook, it’s probably around 10%—they’re on the lower side. If you buy from the programmatic space, like The Trade Desk and things like that, it’s upwards of 50%, and then everything else falls in between. All the digital types of marketing. If you’re doing influencer advertising, if you’re doing affiliate advertising, each one has different levels of fraud that we’ve found. But on the high side is programmatic, and on the low side is probably search and social.  

Okay, so this seems like a big part of optimizing an ad, and making it perform better. So what I’d like you to share with us—and we’d talked about this in the pre-call is that you have a framework for generally optimizing digital ads. So what would that look like? And one element is fraud, but what are the other elements, and how do you go about optimizing your advertisement? 

Sure. Like the heaviest hitter, in my opinion, is fraud. So you start with fraud, you look at where fraud is, and you minimize that, right? The next thing you want to focus on is conversion value. Every campaign has some level of conversion. It could be as simple as a click. It could be as simple as watching a video. It could be purchasing a product. It could be generating a lead for, let’s say, Hey, save money on my car insurance, and you fill out a lead. So what you want to do is look at where that conversion takes place. First off, you want to analyze the conversions because not all conversions are real conversions. You’ll get conversions like credit cards, fake credit cards being used, or fake information being used in fill in forms, and that’s where the fraud comes in. Once you eliminate that, now you can rely on the data that you see in your conversion value, and you start optimizing your campaigns around that conversion value.

So as long as hey, this source is generating me a 20% conversion, this source is generating me 10%. Guess what?

I want to stop spending on the 10%, spend more than the 20% just optimizing for the conversion value. And that's what's going to get your campaign to perform at its highest level.
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So what are ways to optimize conversion beyond the fraud piece?

Yeah, so once fraud’s out of the game, we’ve eliminated fraud, it’s really focusing on the data. What source you buy the traffic from, what sources they get the traffic from. Because sometimes you might buy a source of traffic like Google, and it may not come from Google. It may come from one of its syndicated partners like a CNN or a weather.com or Bloomberg, somewhere where you’re not familiar with, but if they’re getting traffic, that’s their partner network. They’re getting traffic from there. So you want to identify the sources. It could be by keyword, right? You can take a look and break it down by keyword.

If you're looking at Google and maybe you have certain keywords that have a much higher performance because it's a better audience to target
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So if you say, “Hey, anything less than a 10% conversion, I’m going to get rid of. And anything greater than 10%, I’m going to buy more of.” So that’s kind of where you focus on your conversion value. And ultimately, it’s to try to maximize your conversion while still spending your budget. Because let’s say if you’ve got a source that’s converting at 80%. It’s going to be far and few between, and they’re going to be expensive, and the volume of traffic is going to be light, and it’s not going to be enough. Because if you’ve got one conversion a month, that’s probably not enough to survive your company on.

So you got to get somewhere in between, where you get the volume and you get the conversion value that you're looking for to give you the best possible campaign.
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So basically, you calculate your ROI on each type of conversion, and you get to a point where you still get a positive ROI. Is there like a rule of thumb? What is the kind of ROI do you need in order for it to generally be worth taking the risk of doing the advertising and putting in the effort? 

Yeah. It’s very different from client to client. It’s got to be specific to a client. And I’ll give you an example. I used to work with a company called TigerDirect. They were a huge reseller of electronics, computers, computer components, and stuff like that. And they would spend $110 to generate a $20 sale. So everybody knows that’s losing money, right? You’re losing $80 on every sale you generate, or whatever the number is. If they’re spending $100 to generate a sale just to get a $20 sale, why would they do that? 

Well, they know once they get a client in the door, they market. They used to send weekly magazines of all the new stuff that’s out in the market, the new pricing index, constant email bombardments. They would call you and say, “Hey, I saw you bought recordable CDs. We have a special on recordable CDs if you’re looking for them.” They would market like crazy to their client base, and they would average over $300 per client. 

So that’s the lifetime value.  

Right. Their lifetime value was much greater than their cost for acquisition. And they were comfortable and in a position to spend that money to acquire the client knowing that they would make the money over time. Most companies don’t operate that way. Most companies operate like GEICO—they pay $15 or $20 to get somebody to fill out a form saying they want to save money on car insurance. And they may close 15% of those leads into actual deals. And when they do the math, they’re making money every single lead that they get in, the ones that convert. And on the ones they lose, they’re making enough money on the wins that the losses are outweighed, and they’re still making money. So again, every company, every product—it’s different. I’ve seen the same industries, like car insurance. Let’s stick with car insurance. I’ve seen four or five companies where I’m looking at their conversion rates.

Conversion rates are different. Their ROIs are different, their spend is different—everything’s different. It's just targeting different audiences.
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So if I had unlimited funding, let’s say, and I want to ramp up as fast as possible, but I wanted to make it in a smart way. Is there like a rule of thumb that your lifetime value—the profit you make on a customer—has to be 3x the amount you spend on advertising? And the lifetime is measured by the profit, not the top line, but the bottom line. 

Yeah, I haven’t seen a specific rule of thumb to give clients. Obviously, your lifetime value of a client needs to be more than the cost to acquire that client.  And if you want to be profitable, not every company starts out profitable. Look at Uber—they were a billion-dollar company before they went profitable. They were able to raise enough money to keep everything going, because all they cared about was client acquisition. 

Yeah. 

Let me get as many clients and as many drivers and riders in the door, as many drivers and riders in the door as they can possibly get so they can own the market. They had a great idea. Lyft was right behind them. They didn’t care. They were able to raise enough capital to just keep spending like crazy, knowing that in the long game,

once they owned the market in all the different markets they were targeting, they were going to be profitable.
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Doesn’t that mean that there are some actors in the advertising market that inflate prices because maybe they’re venture-funded, and one out of a hundred company is going to make it unicorn? And the other 99 are going to be spending money on advertising, driving up prices.

So if someone comes in and they’re bootstrapping, they’re going to be hard-pressed to actually make a return on their Facebook ads, because there’s so much demand chasing results without appropriate expectation. 

Well, if there’s enough demand, then the bootstrapper can make it work. I’ve been a bootstrapper my whole life. So if you’re in a market where there’s enough demand, it’ll work. But if you’re in a situation where, let’s say today, you decide to come up with a rideshare app, you’re going to be hard-pressed to win riders and drivers as a new bootstrapped company. Personally, I don’t think Uber would be where it is today if it were bootstrapped. A business model like that required to grow fast, and they needed the capital to do it.

So there are certain industries that bootstrappers just aren’t going to be able to touch, because you’ve got a company like Uber that was losing money while acquiring all these new clients, knowing that down the road they would own the network and they would be able to be profitable. That’s a big gamble.

Yeah. But it’s also all the other companies that get funding but never actually make it. And the venture capitalists are spreading their risk because they invest in ten companies, and if one blows up, that’s enough. 

Yeah.  

So that means that there’s a lot of fake demand, basically. 

Well, I’m talking about the demand from the client, not demand from the company. The company has the product, and they’re trying to generate demand for their product. So when I say demand, I mean demand from the customer. 

No, I mean, demand for advertising. 

Oh, okay. Yeah, I see what you’re saying. 

So clicks.  

Yeah. So there’s a limited number of people that are looking for that term. You’ve got a lot of people spending money. It’s going to make it difficult to get it unless you’re spending a lot per click.  

Yeah.  So that means that maybe pay-per-click advertising is not for the faint of heart. 

I wouldn’t say that. 

Yeah.  

It’s not for everybody when you’re talking about every industry, right? Certain industries—I’ll give you an example. Let’s say you’re a roofer. Pay-per-click is going to work great for you because there are only so many roofers in a given area, and there’s a high demand for roofing. You can get away with spending a couple dollars a click, where it’s not going to break the bank, and you get that phone ringing.

My son, for example, owns a power washing and holiday lighting company. And he does Facebook and Google ads. He’s a small company, bootstrapped, and generates plenty of demand because of that situation. But again, if he decided he wanted to compete with Uber, he’d be lost. So it really depends on the industry, Insurance.

Let’s say you want to start your own Rich Kahn insurance company. Well, I’m going to be competing against Allstate, Progressive, GEICO—all these companies that are spending heavily in that sector. The only way you’re going to get action is to spend more per click than they do. And if I’m spending more per click, and I don’t have the scale like they do, I’m going to lose money.

Yeah. Super interesting. So let’s circle back to your framework. So we talked about fraud minimization as a way to optimize ads. We talked about conversion. What’s the third leg of this stool? 

For me, it’s content.   So let’s say you’ve got fraud out of the game. You optimize by campaign and your ads are showing up number one every single time, but the copy doesn’t draw. Or you don’t refresh the copy often enough, then it gets stale, and people see it and think, “Eh, let me try somebody new.” So they’re always looking for newer content, a way to hook the client. You really have to optimize campaign copy. So again, working with Google—that’s ones out there—you have the ability to put up multiple ads, multiple creatives. Their system will automatically take titles and rotate them for you so they stay unique. And then they’ll push more traffic to the ones that are getting a better conversion rate or a better click-through rate. So it’s about constantly staying on top of your copy.

Just like when you watch TV. You’ll see the same companies advertising over and over again, but it’s always a different commercial because they’re trying to hook you. If they played the same commercial for the last 20 years, you’d just tune it out. 

Tune it out. Yeah.  

Yeah. But when you see something new, it’s like, “Oh, let me watch that one.” It’s kind of cool. Because the commercials have to have good copy. If it’s boring, stale copy, nobody’s going to pay attention. 

And if it’s entertaining, then it’s even better, right?  

Exactly. If it becomes memorable and you think, “Oh my God, you’ve got to see this commercial I just saw, it was amazing,” that’s the kind of commercial you try to build—but it’s very difficult to build. 

Yeah, that’s very interesting. The creative element is very important. To catch attention and keep it, it has to be creative, curiosity-inducing, and potentially entertaining. That’s wonderful. 

Yeah. 

So when did you decide to go all in on Anura? 

Yeah. We launched it April 1st, 2017. We spent that first year trying to figure out who we were as a business. Because I’d never sold SaaS before, so I was trying to figure out—do I have a pitch deck? How do I talk to people? What works best? How do I get the person to say they’re interested and want to get on a call? There was so many things that we were struggling with that first year. I don’t know if we signed up more than one or two clients that first year. By the second year, we signed up a bunch of clients because we started to figure out what was working, who we’re talking to, the right trade shows to go to, the right Google ad campaigns to run. 

And as we started getting that, we started getting our traction and we started growing the client base. So I guess we would say we launched in 2017, but really went all in in 2018. That’s when we saw our first couple of clients jump on the software, fall in love with it, give us case studies and reviews, and say, “I can’t believe how you changed my business. This is amazing.” Once we got into the hands of a client, and we had one or two clients that really embraced it, that’s when we felt, “Okay, we’re onto something special. We’re all in.” That was about 2018. 

And then you started winding down your consulting business and went all in on the SaaS business? 

Yeah. We left the Google competitor, the really small Google competitor marketing agency. We left it up for a couple years because we had some clients that were still buying and using it. As the client attrition naturally occurred, we got to a point where we said, “Okay, it’s time to shut it down.” That was also around 2018–2019. Basically, in 2018 we pulled all the resources from it and just kept it running for the clients that were still there. They’d been with us for years, so we kept it stable. We weren’t going to trade shows, we weren’t advertising it. Support was handled by two of us, the client support, actually the whole company was run by two of us, three of us, and we just let it run for a couple of years until the last client jumped off, and then we shut it down.

Yeah. Actually, that’s a great approach—to evolve from a business that maybe has a ceiling, find another opportunity, start putting more time into it as it takes off, reallocate resources, use the legacy business as a cash cow, your legacy business and then once the new business takes off, then basically cut bait. That’s very interesting. And I’ve seen this happen. I’ve done it myself as well. So what’s the hardest decision you’ve ever had to make in your business?  

I’m going over the last 22 years. The hardest decision I ever had to make was firing a best friend. And unfortunately, it actually happened twice. My two best friends—one was a partner and one was an employee. We were working together, and it just got to the point where we had to go our separate ways from a business standpoint, and that hurt the relationship. We stopped talking. It was a bad breakup. And I just ran into them about a year ago, and we picked up where we left off—bygones be bygones. It was tough back then because you have a good friend, and it’s like, “Oh, I want to bring my friends into the business.

So I always tell new business owners when they're starting: if you're going to start the business with friends as a partner, that's different.
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Yeah, I agree. I agree. I had this experience as well, and it’s it was super painful for both of us. It did impact the relationship, even though we both put up a brave face over it, but it kind of breaks the trust. 

Yeah. It’s not fun.  

Yeah. So, final question I want to ask you is: what is the most important question an entrepreneur should ask themselves, in your opinion? 

Am I willing to not give up? Like I said, when I started this company, it wasn’t a new concept. If it’s a new concept, it’s a lot easier to say, “Man, I’m going to crush this.” Because when we started this, there were probably about a half a dozen different fraud solutions in the marketplace back in 2017. There was a handful of them that were out. They were already getting a lot of traction. I think all of them were fully funded and doing really well. It’s not the greatest time in the world to enter the fraud detection market when you have traction like that—kind of like entering the market trying to compete with Uber.

But I looked at it and thought, based on everything I was doing,

I think we have a better product. And once we started getting that feedback from clients who use the other products and realized we had a better product, it made me more convinced that this is the direction we want to go to.
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It’s also a balance. It’s a belief. Maybe this is what you’re talking about that, do you have this conviction that this is going to work out in the end? 

Yeah. 

So how do you know? How do you know that you are willing to not give up? What makes you be able to make this decision? Is this a decision or is this like an ongoing question that you keep asking yourself? 

For me, it’s: I’ve got to run it through my head and feel that it’s an unfillable business. And then I got to feel it in my heart. If I don’t feel it in my head and my heart, I’m not going to do it. I’ve had cut dozens and dozens of great ideas, some that I think would be phenomenal even in today’s standard, but I didn’t have the resources I wanted behind them.

I didn’t really have the heart in those businesses, so I didn’t start them. I wasn’t all in. Like I said before, with this business, when we started it, I was all in with my toe. And then once I started getting feedback from clients, I jumped in. Because then I knew, it wasn’t me saying I’ve got the best solution, it was my client’s telling me I got a better solution. And then as I get client after client, so now you know, you look at seven, eight years later, I’ve got new people in the office. I started working for this new fraud company. I see they’re kind of small compared to some of the other big companies out in the marketplace. And then they’re on the phone with clients who are like ranting and raving about our software.

They come back—now they’re all in. And that's really what I want is I want every team member to feel that, to know that they're with the right company. It’s not just for me—it’s for the team too. 
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Yeah, the team. I agree. That’s super important. Well, I love that. And this whole idea of the client feedback, reinforcing the value, and making people confident to sell it is huge.

Yeah. 

All right. So if people would like to reach out to learn about your solution—maybe they’re advertising, they’re spending a lot of money, and they want to save the 25% without losing any conversions, or they just want to reach out and learn more about and get to know you—where should they go and how can they reach you?  

I would start with anura.io or www.anura.com . We own both. And on there, we have huge amount of resources. We publish several blogs every week. We have dozens of eBooks online. We have the world’s only comprehensive guide on ad fraud, it’s about an 80 page document. So plenty of ways to learn. And then once they want to talk to somebody, once they’re ready, and like they’ve done their research and they’re ready to talk to us, they can fill out a form and we’ll reach out, or they can just pick up the phone and call us. If they want to follow me on LinkedIn, that’s my social media of choice. I post videos like this on there, some wacky videos sometimes with me and my grandkids. The best way to find me is just Rich Kahn on LinkedIn. I’m easy to find.  

Awesome. Well, Rich, thank you for coming and sharing your framework—the Ad Optimization Framework. So it’s content, fraud minimization, conversion, and this idea of conviction: when you are willing to not give up concept. It’s fabulous. For those of you listening, if you found this valuable, follow us on YouTube, check out our LinkedIn page, and stay tuned because every week we are going to get a wonderful contributor like Rich Kahn, the CEO of Anura.

So Rich, thanks for coming and thanks for listening. 

Appreciate it.