Conquering Ad Fraud with Blockchain Technology



Blockchain has been positioned as the ultimate solution to the many faces of fraud in MarTech and AdTech. Within the industry, a bright promise of a decentralized future has led to a spurt of blockchain initiatives.

For many years marketers have been left to deal with the pressing issues of bot-traffic mixed with spoofed domains… This has resulted in a huge headache for everyone involved.

Click fraud statistics cannot be ignored:

  • Marketers lost $7.2 billion to digital ad fraud in 2016– WhiteOps
  • Click fraud is currently growing at 50% per year– The Australian


 Bot- vs. Human-Traffic Fraud:

The two major groups of fraud in the industry.

  • Bot-Traffic Fraud: Includes all non-human traffic types, designed to create fake impressions and fake leads.
  • Human-Traffic Fraud: More complicated issue dealing with real users who generate fraudulent impressions.

This is where blockchain can step in, as it’s intended to deal with both types of fraudulent activity. The main principle behind this decentralized system and blockchain is to minimize and eliminate the core problem. Through an open access ledger, there are no intermediaries, i.e., no leeway for fraudsters. The ledger is intended to track the journey of an ad impression. Blockchain implies complete transparency, providing a way to share data.

So, is the fraud dilemma is solved? In short, not quite. The buzz around blockchain has created a completely new issue – educational gap fraud.


Educational Gap Fraud?

The hype around blockchain, along with a general lack of knowledge, has raised education gap fraud. PR teams tend to use the term “blockchain” without a second thought; as result this has led to industry-wide confusion. Marketers are interested in blockchain, yet they don’t see the scope of possible applications, or the potential return. The overarching conclusion is that the industry doesn’t know how blockchain works.

The IAB Tech Lab presents an Ethereum blockchain-powered initiative in the form of an ads.txt utility – a major step forward. There’s no doubt that blockchain will play a role in bringing AdTech to a new level of transparency. Yet, questions persist:

  • Why does the industry need to make the ecosystem even more sophisticated with blockchain?
  • Who is going to pay for these new transactions? There are already approaches where no one needs to pay for transactions.

While blockchain is positioned to solve for bot-traffic and human-traffic fraud, educational gap fraud will be conquered only with increased education in the industry.  


Now What?

There are already solutions being implemented to combat these issues. There have been a rise in ICO startups and companies offering ready to use blockchain solutions. Companies should strive to grow business with experiments that should be inexpensive — no struggle with endless code lines.The IAB has already created a Working Group: Blockchain for Advertising to develop educational guidelines for the potential uses of blockchain. Currently, the group is working on setting priorities, establishing best practices and core standards. 


The Bottom Line

Question everything “blockchain.” SmartyAds starts by asking our clients who believe they need a blockchain solution: Why do they think they need blockchain? In the end, it’s less about the tech and more about a problem that needs to be solved. Although decentralization is a great idea, there are few cases when it’s truly needed where it can be applied correctly and for the good of the task — not for the good of early dream-sellers’ successes.When it comes to dealing with fraud — blockchain is the best tech. However, unless there is industry-wide education in which all parties get involved within a working blockchain system, the full benefits of the tech will not be achieved. Nevertheless, the perks of implementing blockchain in a diverse digital advertising age are visible and beneficial.


Disclaimer: Guest blogs express the thoughts and opinions of authors from across the MadTech Industry; content does not necessarily reflect the opinions or viewpoints of Industry Index, our officers, or employees.

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Ivan Guzenko
Ivan Guzenko
Ivan Guzenko is the CEO and founder of SmartyAds, which joined the AdTech revolution 12 years ago. Being half-tech and half-business minded — Guzenko is passionate about looking for the next big thing in the industry. Guzenko is a strong believer in AI, cognitive learning, and 360 automation approach that will connect the dots between the buyer and the seller — with no middlemen. Guzenko entered the blockchain industry at 2013 and is an active member in the blockchain community. Guzenko introduced and launched the first blockchain-based future trending exchange prototype, 2 years ago at AdTech Israel and beta-launched the product in 2017 for the APAC.