Can Blockchain Reduce Ad Fraud?

Despite continued efforts by the advertising community, ad fraud continues to plague advertisers and technology platforms. A report released by cybersecurity company Cheq states that advertisers will lose more than $23 billion globally to ad fraud in 2019. There are very few steps like ads.txt taken to ensure ROI for marketers who are spending billions. […]


  • Despite continued efforts by the advertising community, ad fraud continues to plague advertisers and technology platforms.

    A report released by cybersecurity company Cheq states that advertisers will lose more than $23 billion globally to ad fraud in 2019. There are very few steps like ads.txt taken to ensure ROI for marketers who are spending billions.

    What is Digital Ad Fraud?

    Much like hacking, digital ad fraud is a felonious means of making revenues. The lucrative process involves showing inventory to non-organic or fake sources, artificially increasing the value. In some cases, cybercriminals create fake websites and generate fraudulent impressions and get paid by advertisers. Alternatively, hackers secretly plant malware in target’s computer, and the consumer unknowingly participates in the entire system.

    Click forward, and malware activities closely work together to promote malignant digital ad fraud. With the sophistication of AdTech, fraudsters have discovered ways to create fake traffic making vulnerable advertisers pay for clicks that never happened. As a result, these cybercriminals generated revenue worth billions of dollars.

    Even if marketers invest in agencies to avoid fraud, it takes away a good chunk of advertising budget.

    Cheq founder and CEO Guy Tytunovich noted: “Hackers look for loopholes; the more convoluted an environment is, the easier it is for the fraud to occur.”

    According to a survey conducted by Fraudlogix during Q1 of 2019, 13.5 per cent of mobile ad traffic was found fraudulent whereas, in desktop, fraudulent ad display accounted for 18 per cent. Surprisingly, internet explorer accounted for the highest percentage of ad fraud traffic (29.4 per cent). As per geographic data, Europe, the Middle East and Africa (EMEA) recorded a reasonably high volume (12.8 per cent). This data underlines a more significant issue for advertisers in the Middle East – delivering ROI.

    Also Read: 5 Native Advertising Rules Every Marketer Should Know

    Types of Digital Ad Fraud

    Non-organic traffic: Bots and Botnets

    Organic traffic: Ad injection, Ad stacking, domain spoofing, Pixel stuffing, Affiliate fraud, Conversion and cost per lead fraud.

    What is Digital Advertising? Breaking the Digital Advertising Network

    Digital advertising works with centralised ecosystem comprised of an extensive network of intermediaries like Ad Network, Ad Exchange, Ad servers, Demand-Side Platform (DSP), Supply-Side Platform (SSP), Data Management Platform (DMP), and Agency Trading Desk. It is a complicated process with transactions taking place between supply and demand partners via

    Real-time Bidding auctions. The purchases and sale of media, go through intermediaries or technology vendors that take a fair share of the marketing budget.

    However, with the growing ad fraud, marketers and advertisers are expressing concerns about the lack of transparency and trust. Also, the existing technology may not be mature enough to protect the advertisers from sophisticated ad frauds that are hard to identify. Blockchain technology can help restore transparency in advertising and ensure a fair game for advertisers.

    What is Blockchain Technology?

    Blockchain is a decentralised database where every participant shares a copy of the same database in an immutable and transparent manner. The use of encryption algorithms makes the technology near un-hackable and ensures security. The ecosystem works as per consent and agreement of all the participants where a non-participant has no authority. Apart from financial transaction records, it maintains everything in its distributed ledger that has a value.

    UAE is playing a role by implementing IBM-powered blockchain for government initiatives.

    Blockchain has the potential AdTech in curbing ad frauds. Since blockchain is a decentralised, un-hackable database it is uniquely positioned to help the pain points in advertising.

    Also Read: Everything You Need to Know About Blockchain in Marketing


    How Blockchain Can Help AdTech

    Digital ads are served with the help of cryptographic hashes containing ad contents and IDs of the user and the advertiser. It is nearly impossible for bad actors to break through this encryption, making blockchain uniquely qualified to be applied to the AdTech industry.

    Top 3 Ways blockchain can be applied to the AdTech industry

    1. The decentralised policy of blockchain ecosystem makes sure that advertisers are getting organic traction to what they’re paying for. The traceability allows them to monitor overall campaign activities such as the number of clicks as well as the customer journey. Furthermore, it aids several parameters such as data collection, privacy, data quality, and frequency of ad delivery. Eventually, this would help protect.
    2. It would maintain transparency by analysing and verifying customer journey through verified ad delivery by making a confirmation that a real person saw the ad instead of a bot. Advertisers will have more authority to dictate how their assets are being controlled. They can also monitor their ad placement.
    3. The digital advertising community lives by the saying,

    “Let’s throw against the wall and see if it sticks.”

    In a data-driven world, advertisers don’t really know what phase of the advertising process they are in. For instance, a consumer sees the same advertisement for a hotel room while surfing from one site to another, despite already having made a recent purchase. At this point, blockchain would prevent the overexposure ads from being displayed to the customer, considering the optimal frequency of ad display for them.

    Also Read: Google Blocks Unauthorised Ads with App-Ads.txt

    How to Eliminate Ad Fraud with Blockchain?

    1. Tracking and Verification:

    The tracking system allows advertisers to verify if advertisements were delivered to the right target audience at the right time. Assurance comes through identifying the number of impressions that are being sent to audiences. Customers too can check whether the impressions came from an authorised publisher or domain.

    2. Improving Viewability:

    Blockchain platform has a wide array of viewability tracker tools to measure the performance of ad campaigns, much like Key Performance Indicators. The performance metrics involves the total expenditure, number of views, conversion and engagement rates that ensure ad safety and precision of targeting real audiences.

    Also Read: How Intent Analysis Can Help Programmatic Advertising

    3. Privacy and Data Management:

    The P2P network allows individuals to review the activities of participants. Transactional data can only be accessed via a unique Private Key. With no single point of failure, data remains secure, and users get better control over their personal data.

    4. Accountability and Relationship:

    Transparency will not only encourage trust among network participants but also help to deal with approved third parties like SSP, DMP, ad exchanges. The ledger keeps accountability of every single transaction which would help to know how advertiser’s money is used. Third-party providers are generally unwilling to disclose how fees were used. However, with blockchain, a more trustworthy relationship is expected.

    In his interview with Forbes, J.D. Blair of Mad Men Marketing notes that while the essence of blockchain technology isn’t new, he isn’t sure of the current technology can decipher between people and robots. “My thought is that is that, yes, blockchain technology is capable of drawing a de facto conclusion, but can it really distinguish between people and robots,” he asks, adding, “I am not sure it can as we sit here today. We are really talking about defining digital trust and assuming one moderator can be corrupted, but a program drawing from a collective can’t be.”

    Whether blockchain would be able to prevent ad fraud completely or whether fraudsters end up overcoming the obstacles placed in their path by blockchain, remains to be seen.


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