We live in times when there is an explosion of data – while it has several advantages, it also comes with privacy breaches. There is an increase in the number of tech scandals and smartphone apps are being exploited for ad fraud. Users, too, have become accustomed to getting tracked by invasive cookies, which does not spell great news. Let’s know more about “Can Blockchain Technology Keep Ad Fraud In Check?”.
According to the ‘Ad Fraud Benchmark Report’ by Mobile Marketing Association, India leads in mobile ad fraud. Almost 62 percent marketers are spending 20 percent of their advertising budget on ad fraud. Further, 9 out of 10 marketers said that there is scope for improvement in ad fraud prevention, while 95 percent feel that lack of penalties has led to a rise in ad fraud.
Coming to potential solutions, only 37 percent respondents are aware of Blockchain and its application to fraud prevention. The technology is said to bring about change in two critical areas: transparency and decentralization. But before we discuss that, let’s understand why advertisers must care about ad fraud.
Why ad fraud is a threat to advertisers
Digital ad fraud is a serious concern for advertisers. Fraudsters use bots to mimic human behaviour, track cursor movements, and hack social media accounts. They also fake their geo-location to avoid detection. As a result, ads on social media and other digital platforms are taking a hit. These fraudsters are destroying analytics, KPIs and online campaigns of some of the biggest brands in the world. According to industry research, 20% of clicks that advertisers get on their ads are from bots and spammers.
A study by the Association of National Advertisers states that advertisers entrepreneurs are wasting over USD 7 billion on online ads that users do not even see. This number is slated to rise to USD 335 billion in the next two years.
The potential of blockchain to reduce ad fraud
Digital advertising has its share of advantages and challenges. While it creates media-trading opportunities, it also creates gaps and a lack of transparency. The latter puts it at a high risk of fraud. With no source of consistent information and no centralized marketplace, digital advertising has no common data source that can identify and prevent fraud. That’s where Blockchain comes into the picture.
According to a 2018 IBM report, Unilever wanted more transparency for its digital ad buying. It threatened to pull its advertising from Facebook and Google because of fake news and other misinformation and started a pilot program that tracks the digital ad buying ecosystem via blockchain. This blockchain project helped Unilever by identifying discrepancies along the media supply chain while a campaign is in action. Running historical ad data through the system, the company found discrepancies immediately, rather than having to wait the duration of a campaign. Now, the blockchain finds discrepancies daily, which Unilever demands to be fixed before an ad buy can go through.
Blockchain can be visualised as a huge database that stores all data related to advertising. As new transactions are added to the list, they are verified algorithmically across the network maintaining the blockchain. In short, blockchain provides the following:
Consensus – All participants agree that a transaction is valid.
Provenance – Participants know where the asset came from and how its ownership has changed over time.
Immutability – No participant can tamper with a transaction once it is complete. If a transaction is in error, a new transaction must be used to reverse the error.
Finality – There is one place to determine the ownership of an asset or completion of a transaction.
Scope of Blockchain to check ad fraud
The scope of blockchain in advertising is huge in data management, targeting and engagement:
Data management – Data is critical today, whether you are an advertiser or a publisher. Using blockchain, advertisers can fetch the right key performance metrics and get accurate data. This helps to reduce data theft in a big way.
Fraud prevention – Blockchain ensures transparency – publishers will know who is paying them to advertise, and also information flow within the network.
Removes middlemen – Blockchain can help in seamless ad buying and selling by removing middlemen. Today, the biggest middlemen are Google and Facebook, but once they are removed – it can decrease the cost per thousand impressions.
Audience targeting – An ad is visible to an audience, only when certain conditions are met. With blockchain, advertisers will be able to collect accurate customer information and deliver a more refined campaign.
Ad Frequency Optimisation – There are so many times when viewers are shown the same ad, time and again. You can’t control that at this stage, but with blockchain, advertisers can control ad frequency and limit the ad spend.
Data Safety – This is critical, especially when advertisers and users are both prone to high risks, when it comes to data. With Blockchain the traditional browsing behavior will not be the reason you show ads to the users. Without consent, the company will not be able to track the user or use their data.
The Way Forward
In context of “Can Blockchain Technology Keep Ad Fraud In Check?”, we can say, Blockchain is a game-changer and is already redefining the digital landscape. It is also a part of the digital marketing trends to look out for in 2020. With this technology, advertisers will no longer have to be at the mercy of ad tech vendors. It’s time to give up on faulty data and insights, and welcome transparency.