White Ops announced Sept. 19 that it received $20 million in a Series B round of funding, which is earmarked for helping the company continue to expand its security platform for the online advertising industry, including investment in engineering as well as go-to-market efforts.
Total funding to date for the company now stands at $33 million, with investments from Paladin Capital Group and Grotech Ventures.
White Ops' two product platforms, Fraud Sensor and MediaGuard, are focused on helping reduce the risk of online adverting fraud. In January, the Association of National Advertisers (ANA) and White Ops issued a report that estimated $7.2 billion will be lost to online advertising fraud in 2016.
"Our mission is to break the central profit centers of cyber-crime," Michael Tiffany, CEO and co-founder at White Ops, told eWEEK. "We're focused on the incentive models, the idea being that we can make everyday internet users more secure if we make it less profitable for hackers to compromise them in the first place."
Online advertising, particularly advertising fraud, has become a top money maker for cyber-criminals, he said. With advertising fraud, advertisers pay for advertisements to be served and they end up being served to bots, rather than real consumers.
If there is malware running on a consumer's device, the malware could also read the user's cookies, Tiffany explained.
"What botnet operators are selling are visits by the ton," Tiffany said. "So a botnet operator that has compromised machines will offer buyers millions of unique visitors per day."
The buyers of botnet traffic are aiming to increase the volume of visits to a given website or mobile app. The increased traffic, in turn, creates more advertising opportunities or potential inventory for advertisements to run.
"The bot traffic doesn't look like an anonymous bot horde, it looks like verifiable humans," Tiffany said.
White Ops operates a cloud-based software-as-a-service (SaaS) endpoint that performs malware detection, he explained. White Ops malware detection technology is embedded into online advertisements and provides advertisers and advertising platforms with some visibility into potentially fraudulent page views.
"Our malware detection code rides along in an advertisement as a third-party ad call," Tiffany said. "That gives us distribution across a massive number of ads that are served across the internet."
The White Ops code determines if the advertisement that is being displayed is being served to a real human or a malware-driven browser.
A key challenge for the online advertising industry is the growing use of ad-blockers by consumers, which is actually serving to help advertising fraud.
"The effect of ad blocking is that it constrains the supply of advertising opportunities," Tiffany said. "What we're seeing now in the early days of this issue unfolding is that as supply is constrained, that actually is creating greater demand for botnet traffic to fill in the gap."
Sean Michael Kerner is a senior editor at eWEEK and InternetNews.com. Follow him on Twitter @TechJournalist.