Blockchain is already proving its ability to help consumers control privacy, including which ads they see. This level of control is particularly welcome for consumers only just starting to open their eyes to the extent of data harvesting by big tech firms. However, digital advertising fraud is also a problem for businesses who spend significant portions of their marketing budgets on advertising on online platforms. Now, big firms are looking to blockchain digital advertising platforms to help solve this problem.
What Is Digital Advertising Fraud?
Companies wanting to advertise their goods and services online pay an digital advertising platform to place advertisements and promotions. Facebook, Google, and Twitter all operate as online ad platforms, but there are many others. Google allows any website owner to sign up for its Adsense program. The site owner then earns a commission from Google depending on how many impressions (views) or clicks each ad generates.
Some of those in the ad publishing space are less scrupulous than others and try to manipulate the system. They install software that uses bots to keep refreshing their website or generate clicks on the ads displayed. This increases the commission paid to the site owner as the ad appears to have more impressions. But of course, it will never result in a conversion sale for the company who is funding the advert.
This kind of fraud is a significant problem within the ad industry and results in a tremendous amount of inefficiency. One report estimates that the cost of digital advertising fraud will hit $19bn in 2018, representing 9% of the global spend on digital advertising.
nfographics from Juniper Research showing the state of digital advertising fraud
Blockchain Digital Advertising Platforms — Now Used by the Big Guns
Nestlé, AT&T, and Bayer are among the worlds biggest spenders on digital advertising platforms. The WSJ recently reported that these companies are among the first to investigate the use of blockchain to try and weed out advertising fraud once and for all.
Nestlé is the worlds largest food manufacturer, and the company’s advertising spend tops $9bn each year. To try and cut the proportion of this spend that is lost to fraud, the company has been testing a product from blockchain startup Amino. The Amino system uses the immutable capability of blockchain to track ad impressions and trace payments throughout the media supply chain. Bayer is also testing Amino.
The Head of e-Business at Nestlé reportedly told the WSJ that he could see a future where blockchain solutions will be a prerequisite of working with advertisers.
Screenshot from the Amino website
Another of the blockchain digital advertising platforms attracting significant attention is MetaX. This solution, called adChain, is a dApp that contains a list of community-curated sites that support ads. The utility token of the system acts as a voting token for members to decide whether a site is added to or removed from the list. MetaX reports on the adChain blog that Facebook was a user, but was kicked off the registry in June. At the time of writing, the list includes YouTube, Reuters, and the BBC website.
MetaX has form in the digital advertising space. The company previously developed a solution called ads.txt, designed to reduce the incidences of fraudulent online sales. It is a simple text file that companies host on their websites, listing all resellers authorized to sell company products. By 2017, 44% of online publishers were using an ads.txt file on their site.
Screenshot from the adChain website showing an excerpt of listings as at publication date
IBM and MediaOcean
MediaOcean is a long-standing provider of advertising campaign management software. In June, the company announced a collaboration with IBM iX to build a blockchain solution for creating transparency and accountability across the entire media supply chain. The system will run a custom blockchain developed by IBM, combined with the existing Media Ocean platform.
The pilot will take place during July. The two companies have pulled together a consortium of businesses who are involved in the testing, including Pfizer and Kimberly-Clark. Babs Rangaiah, Executive Partner of Global Marketing at IBM iX is quoted in the press release as saying “Measurement and transparency require new solutions across the programmatic supply chain and blockchain is a technology strategically used to create an environment of trust.” Soundbites like this underscore the growing belief within corporations that blockchain will transform their operating environment.
Blockchain is already demonstrating the potential for reducing fraud and counterfeiting across supply chains. Digital advertising platforms are now also discovering that an immutable database is a critical tool in combating fraud. The enthusiastic involvement of massive corporations is a testament to that. Finally, the current levels of investment into blockchain solutions by corporate giants like Nestlé, Pfizer, and Bayer are also a surefire indicator that the technology is now well on the road to adoption.