Bug Bounty Payouts: A Guide to Setting Up Incentives for Program Managers

Bug Bounty Payouts: A Guide for Program Managers

Bug Bounty Payouts: A Guide to Setting Up Incentives for Program Managers

Bug bounty programs have become a popular way for organizations to identify and address potential vulnerabilities in their systems.

Organizations can tap into a global community of experts to help secure their networks and data by offering rewards and incentives to ethical hackers who find and report these vulnerabilities.

However, as the old saying goes, “You get what you pay for.” To attract and retain top talent, it is essential for managers to properly plan and implement incentives that will entice ethical hackers to participate in the program.

In this blog post, we’ll dive into the nitty-gritty of creating a successful bug bounty program, from assessing the competition to determining payouts to keeping hackers engaged and measuring ROI.

Get ready to take your bug bounty program to the next level!

Why Getting Payouts Right is Important

It is important not to screw up bug bounty payouts and find the sweet spot because it can significantly impact the success of a bug bounty program.

Poorly planned incentives can result in a lack of participation from ethical hackers, meaning fewer vulnerabilities are identified and addressed.

Additionally, incentives must be structured correctly to avoid dissatisfaction among participants, resulting in a lack of engagement and retention.

On the other hand, if payouts are too high, it can be cost-prohibitive for the organization and not sustainable in the long term.

Finding the sweet spot in terms of incentives and payouts is essential to attract and retaining top talent while being financially responsible. It can also make a big difference in the effectiveness of the program and the return on investment.

Types of Payouts to Consider

Program managers should consider various types of bug bounty rewards and incentives, such as:

  • Monetary rewards: This is the most common incentive in bug bounty programs. Financial rewards can range from a few hundred to tens of thousands of dollars, depending on the severity of the identified vulnerability. It’s important to establish a tiered system for rewards based on the severity of the vulnerability; it allows organizations to prioritize the most critical vulnerabilities and allocate resources accordingly correctly.
  • Recognition and reputation points: This type of incentive can be helpful for ethical hackers who are motivated by recognition and building their reputation within the community. This can include public recognition on the organization’s website or social media platforms, badges, or other forms of digital kudos. Ethical hackers who consistently find and report vulnerabilities are rewarded with higher recognition and reputation points. Platforms like HackerOne and BugCrowd thrive on publishing leaderboards, which gamify hacking.
  • Swag and merchandise: This can include items such as t-shirts, hoodies, or other branded items that are popular among the ethical hacking community. Swag and merchandise can be an excellent way to reward participants and promote the company’s brand. When offering swag and merchandise as rewards for bug bounties, it’s important to know your audience and time the gifts appropriately. Leverage data and insights about your participants to give gifts that will be well received and not thrown in the trash.
  • Job offers: Some organizations may offer job opportunities to exceptionally skilled and dedicated ethical hackers who have identified significant vulnerabilities. This can be a great way to retain top talent and build a dedicated team of experts, but be careful: a full-time gig may only be attractive to some participants. Managers should consider the preferences and constraints of ethical hackers and legal factors before offering job opportunities as an incentive.

Ultimately, the best type of reward and incentives will depend on the organization’s budget, the industry in which it operates, and the preferences of the ethical hacking community. It’s important to offer a balance of incentives to attract and retain top talent while also considering the potential costs and risks involved.

Factors to Consider

When determining payout amounts for a bug bounty program, there are several factors to consider, such as:

  • Severity of the vulnerability: The severity of the vulnerability should be the primary factor when determining payout amounts. Severe vulnerabilities that could lead to major security incidents should be rewarded with higher payouts. For example, a SQL injection vulnerability that allows an attacker to access sensitive data from a database should receive a high payout.
  • Difficulty of finding the vulnerability: The difficulty of finding the vulnerability should also be considered when determining payout amounts. A vulnerability that is hard to find and requires a high level of expertise should be rewarded with higher payouts than those that are easy to find.
  • Impact of the vulnerability: The vulnerability’s potential impact on the organization and its customers should also be considered when determining payout amounts. A vulnerability that could lead to a major security incident or data loss should be rewarded with higher payouts than a vulnerability with a low impact. Try to think in dollars and cents. Ask yourself: “What would this have cost us if it had gone public?”
  • Quality of the report: The quality of the bug bounty report provided by the ethical hacker is an integral part of determining payout amounts. You should reward well-written, detailed reports with clear instructions. Poorly written, incomplete reports that waste your time or send you on a wild goose chase should get adjusted.
  • Legal factors: Some countries or jurisdictions may have laws limiting the amount of money paid to a researcher. Understand bug bounty laws and how they may impact your business before launching a public program.
  • Organizational Budget: The unfortunate reality of the world is that businesses need to generate a profit. Without profits, very few bug programs will likely exist. Companies should operate in conjunction with approved security budgets and understand that there rarely is an open checkbook. Start small and scale with profits, not against them.

Considering all these factors will help managers to create a fair and sustainable payout structure that will attract and retain top talent while also being financially responsible.

Do Your Homework

There’s no need to reinvent the wheel when you can make it a little rounder.

When assessing relevant bug bounty programs in the industry, it is important to research and analyze similar programs in terms of their payout structures and incentives. This includes looking at the rewards and incentives offered, the number of payouts, and the criteria used to determine payout amounts. Additionally, it is important to research the scope of the program and the types of vulnerabilities targeted.

By analyzing other programs’ payout structures and incentives, managers can gain insight into what is working well and what is not. From there, managers can adjust their programs to align with industry standards. They can update their rewards and incentives to attract and keep top talent. This research also helps managers determine how much budget they should allocate for their bug bounty program and the average payout in their industry.

Beyond initial research, managers should also keep an eye on the performance and progress of other programs. This will provide an idea of how the market adapts over time. This information can then be used to identify improvement areas and adjust the program as it matures.

Bonus Tip: Want an easy way to see hundreds of bug bounty programs at a glance? Check out our bug bounty list and tracker to compare programs and see who’s making big splashes in the bug bounty-hunting world.

Don’t Set it and Forget It: A Proactive Approach to Payouts

When it comes to bug bounty payouts, it’s important to take a proactive approach rather than a “set it and forget it” mentality.

Once you’ve established a benchmark, and created your various payout tiers, take immediate action to start promotion and create engagement.

Your action plan should include the following:

  • Implementing a comprehensive marketing strategy to promote the program.
  • Reaching out to potential participants through email and direct messages.
  • Creating a website or landing page specifically for the program.
  • Hosting a hackathon to kick things off.
  • Offering bonuses for specific vulnerabilities for participants who consistently find and report security research.
  • Leveraging organic social media campaigns and paid advertising to reach larger audiences.

Post-launch activities are equally as important. With ongoing communication, your program will stay on track. Managers should provide regular updates on the progress of the program and the payouts that have been distributed. This will help to keep participants engaged and motivated to continue finding and reporting vulnerabilities. Consider setting up a Slack or Microsoft Teams channel and inviting participants to collaborate. Ask them for feedback. Did they feel like your payouts were fair? You’ll be surprised by what you will learn by simply asking.

Tracking and reporting program progress is another essential aspect of a successful bug bounty program. Managers should use metrics such as the number of participants, the number of vulnerabilities discovered, and the total payouts distributed to measure the program’s success. This information can be used to identify areas for improvement and to make adjustments to the program as needed.

By taking a proactive approach to payouts and continuously monitoring and improving the program, managers can ensure that their bug bounty program is effective, efficient, and successful in identifying and addressing vulnerabilities in their systems.

Bonus Tips

Here are some additional insights and tips on determining payouts in a bug bounty program:

  • Take into account the fact that bug bounty hunting is not a stable income for many ethical hackers. 54% of bug bounty hunters are employed elsewhere. A large payout for one vulnerability may be more valuable to them than multiple smaller payouts.
  • Consider the effort and skill required to find a vulnerability. A vulnerability that requires a significant amount of time and skill to discover should be rewarded more generously than one that was found quickly.
  • Create a flexible payout structure that allows for the reward of exceptional contributions. A discretionary reward pool can be set aside for particularly valuable or rare findings.
  • Be transparent and consistent in the payout process. Use a structured and well-defined approach to evaluate and pay out bounties. This helps to ensure that participants understand what is expected of them and how their submissions will be considered.

By considering these additional insights, program managers can create a payout structure that is fair, transparent, and motivating for ethical hackers and also beneficial for the company.