How Blockchain is revolutionising the ad landscape

Ad fraud is a persistent problem in the industry. Blockchain technology serves as a powerful tool against ad fraud as it helps advertisers trace interactions with their ads to prevent fraudulent activities.

Ad fraud is a major concern for advertisers, costing billions of dollars annually, observes Tej Naidu Kota, Business Head, PAD. And traditional methods of combating it have limitations, but blockchain technology offers a promising solution with its unique characteristics:

Immutability: Blockchain records transactions in a tamper-proof, chronological ledger. This makes it incredibly difficult to manipulate data or inject fake ad impressions, as any change would be immediately visible to all participants.

Transparency: All transactions on the blockchain are publicly accessible, providing advertisers with a clear view of the entire ad campaign, from impression to conversion. This transparency helps identify suspicious activity and pinpoint fraudsters.

Decentralization: Unlike centralized systems, blockchain has no single point of failure, making it resistant to manipulation by third-party actors. This reduces the risk of fraudsters infiltrating the system and faking data.

Also read:

From fraud to fairness – Part 1: Can blockchain save digital advertising?

According to Tej Naidu Kota, some specific ways blockchain helps advertisers trace interactions and prevent fraud are:

Impression verification: Blockchain-based platforms can track ad impressions in real-time, ensuring they are delivered to real users and on legitimate websites. This eliminates the possibility of "ghost traffic" generated by bots and other fraudulent means.

Supply chain tracking: By tracing every step of an ad's journey through the supply chain, blockchain can expose instances of ad injection, where ads are inserted into unauthorized spaces. This helps advertisers identify and eliminate fraudulent publishers and ad networks.

Click fraud detection: Blockchain can track clicks on ads and link them back to individual users. This allows for the identification of click farms, where bots are used to artificially inflate click-through rates.

Attribution and conversion tracking: By connecting ad impressions with conversions (e.g., purchases, sign-ups), blockchain can provide a clear picture of which ads are actually driving results. This helps advertisers optimize their campaigns and avoid wasting money on fraudulent clicks.

Dr Ravi Chamria, Co-Founder & CEO, Zeeve, agrees that ad fraud is a critical issue. “If we see the data, Search Engine Land’s research says that approx 22% of all online ad spend and 30% of mobile ad spend was lost in 2023 due to ad fraud. Again, blockchain’s attributes like open-source ecosystem, end-to-end transparency, tamper-proof ledger, and automated smart contracts are proven to combat ad fraud issues, improving the efficiency of advertising campaigns,” says Chamria.

According to Ravi Chamria, the following companies help marketing and advertising teams optimize their content for digital platforms based on the data they gather. They also help combat ad fraud and reduce advertising supply chain mismanagement.

Example 1: IBM and Salon Media have come together leveraging a blockchain-based product created by AdLedger. It will remove intermediaries between advertisers, publishers, and consumers, thereby increasing transparency and bypassing ad fraud, such as bot fraud and domain spoofing. Their product also allows targeting of campaign reconciliation; in particular, the Proof of Concept (PoC) records contractual conditions, publisher payments, and details about the fulfillment of contractual terms in a decentralized, shared system that is immutable and fully auditable.

Example 2: MetaX has created an adChain registry using blockchain. adChain offers an advanced token-curated registry system that records non-fraudulent digital publishers, which are finely curated by adToken holders. Advertisers can use adchain to leverage a system that curates a list of the websites offering legitimate digital advertising inventory in their niche. This simply means that advertisers can query that list before deciding on whether to serve an ad.

Example 3: Rebel AI uses blockchain to prevent ad fraud activities like domain spoofing and rewriting of ad location URLs. Rebel AI integrates content delivery network (CDN) level, both for publishers and at the agency level, by encrypting ad tags with the use of verified fingerprints. Advertisers can use Rebel AI’s Passport to login and authorize ad destinations, such as the specific domain of the New York Times where they would like their content displayed. The Passport tags are then encrypted with the intended destinations. This avoids placing of ads in illegitimate sites.

Trust with consumers

With growing concerns about online privacy, blockchain can assist advertisers in building trust with consumers. And it gives users more control over their data.

Growing online privacy concerns are putting strain on advertiser-consumer trust, says Tej Naidu Kota. With the help of blockchain there are possibilities for rebuilding trust by empowering users with greater control over their data.

Transparency and Immutability: Blockchain, at its core, is a transparent and tamper-proof ledger. All ad interactions, from targeting to delivery and performance, can be recorded on this permanent ledger, accessible to authorized users (including consumers). This eliminates the ‘black box’ problem where users have no clue what's happening with their data.

User-owned data: Instead of traditional ad networks holding and monetizing user data, blockchain allows users to store their data in secure personal wallets. These wallets act as data vaults, giving users complete control over who can access and use their data for advertising purposes. Consumers can choose to share their data with specific advertisers for specific campaigns, giving them a sense of agency and privacy.

Direct compensation: With their data stored in personal wallets, users can set conditions and prices for data access. Advertisers seeking to target this data must then negotiate and pay directly to the user. This empowers users to monetize their own data, creating a fairer and more transparent value exchange.

According to Tej Naidu Kota, the impacts on user experience are:

Enhanced control: Users will feel more in control of their digital footprint, leading to increased trust and engagement with advertising.

Personalized ads: Advertisers can target users based on their preferences and data they willingly share, resulting in more relevant and meaningful ads.

Reduced intrusiveness: Less reliance on third-party data collection minimizes data breaches and unwanted ad targeting, improving user experience.

Potential for micro-payments: Direct compensation for data usage could empower users and incentivize engagement with advertising.

“Blockchain offers a promising solution to the online privacy crisis in advertising. By giving users greater control over their data and creating a more transparent and equitable system,” concludes Tej Naidu Kota.

According to Dr Ravi Chamria, blockchain offers a seamless online experience for consumers in several ways. For example, he adds, blockchain maintains data confidentiality via private keys, protects data exploitation through secure data encryption, provides decentralized storage, and more importantly, it enables secure, permission-based access controls.

“Plus, consumers will have more control on their data on blockchain. They can choose with whom their data will be shared, ensuring the data won’t be mishandled or sold outside their consent. This makes room for better-targeted ads and, therefore, a more positive user experience,” he adds.