Can Blockchain be the Ultimate Answer to Preventing Ad Fraud?

May 26, 2017 | Marketing Blogs

The problem of lack of transparency has been plaguing the digital advertising industry since the advent of digital marketing. This has given rise to offenders who exploit this lack of transparency to defraud the advertising industry. It has been estimated that as of 2016, fraudulent practices such as impression fraud, click fraud, attribution fraud and malvertising (malicious advertising) has cost advertisers and publishers close to USD 8 billion and, if left unchecked, could rise to USD 20 billion by 2020. Apart from the obvious loss of ROI, these fraudulent practices could create a rift between advertisers and media agencies, impacting advertiser-agency relationships, as well as budget allocations toward digital media.

Recently, there have been many attempts by the advertising industry to combat ad fraud. Avoiding blacklisted sites with high levels of fraudulent web traffic, closely monitoring campaign metrics, and establishing required levels of transparency during bid requests were some of the methods adopted. Though these methods were in the right direction, they proved to be less than effective. There wasn’t a single foolproof method to ensure transparency and security to prevent ad fraud.

The answer to the pressing question of how the digital advertising industry can get rid of this malicious plague may come from the revolutionary concept of blockchain, which was once only popular in the financial sector, synonymous with cryptocurrency, but is now widely adopted in varied industries.

With the prevention of ad fraud such a major issue for the advertising industry, exploring how blockchain technology can be leveraged to deliver higher levels of transparency and security was a logical step for MetaX and ConsenSys, the creators of adChain. adChain is a blockchain protocol that works across all digital advertising channels, enabling participants across the supply chain to coordinate and work together in a new ecosystem free of fraud, bot traffic and malware.

According to MetaX, “blockchain can be thought of as a distributed and immutable ledger of events shared among all parties.” This implies that blockchain records all transactions, including impressions, clicks and audience segments that occur throughout the entire supply chain of digital advertising, and stores it in the form of secure “blocks” via cryptography. The data recorded in the form of a blockchain can be used by various stakeholders, including advertisers, publishers, verification vendors, DSPs and ad exchanges to audit every step of the entire supply chain of digital advertising.

Blockchain improves the transparency of digital advertising by enabling:

  • End-to-end transparency where all data related to an impression is easily accessible
  • Campaign coordination and auditing through a comprehensive audit trail for the entire campaign
  • Real-time fraud identification and mitigation
  • Real-time reconciliation and data collection so advertisers and their vendors can see where other problems arise across the supply chain and take advantage of coordination efficiencies to help track/solve issues
  • Cryptographically secure event processing
  • Comprehensive data that complements existing safety vendors and fraud prevention solutions
  • Ad-friendly tracking beacons and scripting that permit MetaX and the adChain protocol to seamlessly integrate with the industry’s existing solutions, enabling interoperability and easy adoption by the digital advertising ecosystem

This is great news for marketing procurement. By ensuring adoption of this protocol by their in-house or external media agency, the DSP, ad exchange and the publisher will be able to track every event involved in the digital advertising supply chain. They will be able to verify ad delivery and verify whether an impression was real. This not only helps in ad efficiency, but also helps in reducing costs involved in centralized auditing through companies like Accenture and Deloitte.

It is still early in the game for blockchain in combating ad fraud. Needless to say, its effectiveness would depend on the adoption level within the digital advertising industry.

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