How Blockchain Technology Will Change Digital Advertising For The Better

Blockchain technology is in the process of disrupting an array of commercial industries through its ability to securely record, store and transfer data in an immutable manner. Affected industries range from financial services, supply chain management, and healthcare to cloud computing, insurance, and cyber security, among other.

One area where the blockchain will likely also have a major impact is in the digital advertising space.

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Ad Fraud is Burden the Digital Advertising Industry

Currently, the digital advertising sector has a major problem with ad fraud. It is estimated that ad fraud could cost advertisers over $16.4 billion this year. According to a study conducted by comScore, which analyzed digital ad campaigns in 2012 and 2013 concluded that over 50 percent of digital ads were never actually seen by human visitors, yet were counted as impressions by the ad campaigns. Ad fraud, however, goes beyond fake impressions. It can come in many other forms such as click farms, domain spoofing, ad injections, pixel stuffing, and of course bots.

Bots are one of the newer threats to digital advertisers. They are programs developed to mimic human activity online. According to estimates, over 60 percent of the activity on the Internet is driven by bots, which is a grave concern for advertisers who regularly struggle to distinguish real traffic from bot traffic.
Bots, however, can not only create fake traffic. More advanced bots can even fill out sign up forms to defraud pay-per-lead affiliate marketing campaigners and, thereby, create a new problem for advertisers who are trying to get the most of out their ad dollars spent.

The Association of National Advertisers and the Interactive Advertising Bureau believe that ad fraud has the ability to dampen the growth of the digital advertising industry should the problem stay unresolved. Bots are a major part of that as they are not easily detected.


How the Blockchain Can Defeat Ad Fraud

Blockchain technology, the technology that underlies the digital currency bitcoin, can be augmented to be used for a wide range of purposes as its key value proposition is its ability to record, store and transfer data in a secure fashion.
“The digital advertising industry is experiencing tremendous growth while increasingly struggling with problems like ad fraud, offering an ideal use case for blockchain technology,” said Joseph Lubin, founder of New York-based blockchain software development company ConsenSys.
Again, this is where the blockchain can intervene. A company that aims to do exactly that is California-based iBuildAppnetwork, which is about to launch the iBuildApp adNetwork.

The iBuildApp Network is building a decentralized mobile marketplace that will include a mobile advertising network, called adNetwork, which will make use of the Ethereum blockchain to alleviate the issues of ad fraud by linking up users directly with advertisers and recording all interactions in an immutable and transparent manner.

For the advertising industry, the blockchain can ensure that advertisers only pay for real views, clicks, sign ups, and other conversion-related actions by recording all actions in an immutable and transparent manner. It can do that, for example, by encrypting impressions and broadcasting them to all members of the blockchain, who can then approve them. This ensures transparency and helps to identify fraudulent activity in real time when it occurs.

John Koetsier, mobile economist at Tune, believes that “fraudsters capitalize on complexity and use the cracks in the system to inject their poison.”


“To fix fraud, marketers need tools that surface all the layers and show them exactly where their ads touch real, live, breathing people. Perhaps shockingly, so do ad networks, because when you add re-brokering, sub-publishers, and exchanges into the mix, many ad networks don’t actually know where all of their supply actually comes from in real time,” Koetsier added.

Blockchain Technology in the Mobile Ad Space

Ad fraud is not only an issue for adverts on the Internet. It also affects the mobile ad sector as bots have also gone mobile. Similarly to bots that create fake impression, clicks or sign ups online, there are mobile bots that effectively do the same thing on mobile phones. They hijack devices and install malware or occur in fake apps that drive invalid traffic to mobile adverts.

iBuildApp Network users will be remunerated for viewing ads that they choose they want to see through digital tokens called utility network tokens (IBA), which will be disbursed through self-executing smart contracts that pay out once the user has performed a particular action. Advertisers, on the other hand, will be able to use their existing customer data to better target their potential customers on mobile and will no longer need to rely on third-party intermediaries when managing and executing their mobile ad campaigns as they can deal with the customers and their data directly.

Furthermore, users will benefit from being able to choose what data they are willing to share with advertisers and what type of adverts they would like to view on their mobile phones as well as getting paid in tokens for both the data they share and the ads they view.

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