How to battle ad fraud with blockchain

The inherently transparent nature of blockchain technology means every transaction is visible and can’t be tampered with, making it ideal for tackling this blight.

Don't let its use for cryptocurrency confuse you, blockchain is a tried and trusted way to beat the fraudsters explains Dan Hodgson, Director of Business Development at Verasity…

Blockchain has been around for decades, but the technology only received widespread adoption in the early 2010s thanks to the advent of cryptocurrency and with the rollout of smart contract-enabled blockchain platforms. Since then, blockchain (with its inherently transparent, secure data storage characteristics) has been embraced by numerous industries, and has been used for everything from safeguarding pharmaceutical supply chains to managing music rights payments. 

Now the world of programmatic digital advertising is turning to blockchain to solve one of its biggest challenges: ad fraud, which is predicted to cost the industry as much as $100bn globally by 2023

Understand the problem

To understand how blockchain can help, you first need to appreciate the threats facing your digital ad supply chain. Programmatic advertising offers huge benefits to both advertisers and publishers; but as technology has developed, the programmatic industry has become increasingly convoluted as more players enter the game. The result is a lack of transparency and accountability that criminals have been quick to exploit, launching attacks that include everything from AI bots to click farms, hidden ads (that are never seen by real users) and traffic hijacking. All of these have a detrimental effect on brands’ budgets and campaign performance, particularly with regards to the likes of CTR [click through rate], fill rate and market perception.

Blockchain to the rescue… but what is it?

There is quite a bit of confusion as to the exact nature of blockchain technology, and this isn’t helped by its default association with digital currencies. The fact is, blockchain is simply a way of recording data and information (contracts, transactions etc) on a digital public ledger that is viewable to all, and completely immune to any form of manipulation. Information is stored in ‘blocks’, which when combined form a chain of data that cannot be altered. Blockchain technology has been around for a while, but its application to the digital advertising industry to safeguard the programmatic supply chain and increase transparency is where recent innovation lies.

How to harness to power of blockchain

Let’s dive a little deeper into the mechanics of how blockchain (some of it proprietary tech) can play its part in protecting your ad campaigns, and study the benefits in closer detail:

  1. One of blockchain’s USPs is its inherently transparent nature. Building an ad system around blockchain means that all aspects of the supply chain are visible to all parties – there's nowhere for criminals to hide. This transparency allows blockchain ad platforms to cut out ad fraud, and blacklist apps and sites they believe are subject to criminal activity.
  2. The nature of how blockchain is constructed – in a progressing chain of transactions – means that it is immutable. It cannot be tampered with, and any data stored represents an unalterable, accurate depiction of the data activity and history. Not only does this integrity inspire confidence in advertisers and publishers, but it also simplifies and speeds up tasks, such as auditing, that would usually rely on human interaction.
  3. Working with a blockchain ad system will also save your advertising budget, because it will stop fraudulent activity hijacking your ads or hiding your campaigns from your audience. More than one jaw must have hit the floor when Google revealed some time ago that over 50% of ads are never seen by a human. 
  4. We live in a privacy-first era, and the ongoing legality of some advertising practices regarding consumer tracking will rumble on for years. Blockchain neatly sidesteps privacy issues because Web3 enables users to own (and manage) their data while also giving access to centralised services. This removes the need for consumers to entrust their data to untrustworthy third-party applications. 
  5. Finally, blockchain works atspeed, which allows advertisers to quickly react to advertising performance metrics and finetune their campaigns. It also means the blockchain can confirm an advertisement has been served, track its performance and then, thanks to its transparent nature, trigger a faster transaction payment for a publisher – because there is irrefutable proof in the blockchain that an ad has been served. 

So, blockchain technology has the potential to transform the digital advertising world. The transparency it offers provides advertisers with all the data they need to take ad performance to the next level, while the transactional visibility and accountability make the technology future-proofed in our fast-moving industry.