An end to fraud?

Blockchain prom­ises to erad­i­cate fraud and make the dig­i­tal ad­ver­tis­ing in­dus­try trans­par­ent. So why hasn’t it been em­braced whole­heart­edly by the ad­ver­tis­ing in­dus­try?

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“Blockchain is go­ing to com­pletely up­end the way things are done,” says Daniel Gould­man, co-founder of Ternio, a blockchain tech­nol­ogy for the dig­i­tal ad­ver­tis­ing in­dus­try. “This not only re­lates to is­sues such as to­tal trans­parency (as in where money is spent), but also pay­ments to pub­lish­ers, where there are presently huge pay­ment lags. It’s go­ing to be­come the foun­da­tion for pre­vent­ing fraud, which is cur­rently a real prob­lem within the in­dus­try.”

A de­cen­tralised un­hack­able data­base, can blockchain help solve the myr­iad prob­lems fac­ing the dig­i­tal ad­ver­tis­ing in­dus­try? There are those who be­lieve so, Gould­man amongst them.

From con­cerns over brand safety and ad fraud, to mis­lead­ing ad reach mea­sure­ment, the dig­i­tal ecosys­tem has cer­tainly had its fair share of bad pub­lic­ity over the past few years. What’s more, with over a third of all dig­i­tal traf­fic be­lieved to be cre­ated by bots, an es­ti­mated $50 mil­lion a day is be­ing lost glob­ally from pre­dom­i­nantly crim­i­nal be­hav­iour in the dig­i­tal ad­ver­tis­ing in­dus­try.

Up step blockchain, with its im­mutable dis­trib­uted ledger and the pos­si­bil­ity of erad­i­cat­ing fraud­u­lent be­hav­iour within the dig­i­tal ad in­dus­try.

“The ge­nius of blockchain means that data and in­for­ma­tion can be main­tained by mul­ti­ple part­ners so as not to make the data de­pen­dent on any one party,” says Gould­man. “Be­cause the data is main­tained si­mul­ta­ne­ously by mul­ti­ple par­ties, one can trust that the in­for­ma­tion stored is true.”

Not only can blockchain help re­duce ad fraud and pro­vide trans­parency in the ad­ver­tis­ing sup­ply chain, it can pro­vide con­sumers with greater con­trol over their data, says Bassam Rizk, data and tech­nol­ogy di­rec­tor at Trans­act, OMD’S new e-com­merce arm. It can also pro­vide real-time pay­ments for im­pres­sions or data bought, and pro­duce smart con­tracts that can em­power new ad­ver­tis­ing in­fras­truc­ture for the buy­ing and sell­ing of data or in­ven­tory.

“Blockchain is well suited for any­thing re­lated to data, sup­ply chains or rec­on­cil­i­a­tion,” says Gould­man. “Ad­ver­tis­ing ben­e­fits from blockchain in all three of these cat­e­gories. One of the prob­lems within the ad­ver­tis­ing in­dus­try is the lack of trans­parency as to where money is re­ally be­ing spent and the fraud/in­ef­fi­ciency that’s as­so­ci­ated with that en­tire sys­tem. Blockchain has the unique abil­ity to track ad im­pres­sions all the way through the sup­ply chain, to pay out sup­ply chain par­tic­i­pants asyn­chronously, and to ad­dress the data dis­crep­ancy is­sues that many in the in­dus­try are strug­gling with.”

To date, how­ever, there has been limited up­take, al­though that is slowly chang­ing. Ternio is one of a hand­ful of com­pa­nies set to launch this year (it is to hold its first pi­lot in Oc­to­ber), while oth­ers are in the process of tri­alling their prod­ucts. For ex­am­ple, in Asia Mind­share part­nered with blockchain firm Zilliqa late last year to test whether the com­pany’s blockchain pro­to­col can be used

to ad­dress the chal­lenges plagu­ing pro­gram­matic.

“With time, agen­cies and ad­ver­tis­ers will re­alise the po­ten­tial sav­ings that can be achieved through blockchain based tech­nolo­gies,” says Rizk. “Yes, blockchain can solve many of ad­ver­tis­ing’s press­ing is­sues, with en­hanced trans­parency, trust­wor­thi­ness and ef­fi­ciency. We are al­ready see­ing new in­ter­net browsers such as Brave re­defin­ing the re­la­tion­ship be­tween ad­ver­tiser, pub­lisher, con­sumer, and con­tent. But without con­tin­ued co­op­er­a­tion and in­no­va­tion, adop­tion will re­main slow.”

Slow adop­tion is a stum­bling block, with con­sumer par­tic­i­pa­tion not only the key fac­tor slow­ing down blockchain for the ad­ver­tis­ing in­dus­try, but blockchain as a whole, says Rizk. “Like any new tech­nol­ogy it takes time to im­prove it,” he says. “For ex­am­ple, how many ‘trans­ac­tions’ or ‘ac­tions’ can the tech­nol­ogy record every se­cond? It is de­bat­able whether blockchain can cur­rently han­dle or record the sheer vol­ume of pro­gram­matic im­pres­sions, clicks, and con­ver­sions that are made every se­cond and en­sure that a non­fraud­u­lent ad­ver­tise­ment is served to a con­sumer. In com­par­i­son, bit­coin can han­dle up to seven trans­ac­tions per se­cond. That would be too slow for the ad­ver­tis­ing in­dus­try.”

Gould­man agrees. “Some sim­ply don’t be­lieve it can work in a pro­gram­matic en­vi­ron­ment be­cause it re­quires tremen­dous scale,” he says. “Some are fine with it pend­ing a busi­ness case (how it will help them make money). It’s still an emerg­ing tech­nol­ogy and I think we’ll see greater adop­tion when its clear to ad­ver­tis­ers that they’re go­ing to save a lot of money. And that day is com­ing soon.”

Orig­i­nally de­vel­oped to pre­vent fraud in dig­i­tal cur­rency ex­changes, blockchain faces another stum­bling block – a de­sire to re­tain a level of murk­i­ness within the in­dus­try. Be­cause, as Gould­man says, “trans­parency also means ac­count­abil­ity, and some peo­ple are wor­ried about what that means for their busi­ness”.

And yet as var­i­ous in­dus­tries be­gin to get to grips with blockchain, its wide­spread adop­tion in an in­dus­try plagued with fraud of­fers the glimpse of a health­ier fu­ture.

“Blockchain is go­ing to al­ter the cur­rent dy­namic where Google and Face­book get all the money,” be­lieves Gould­man. “It is go­ing to help pu­rify a very com­pli­cated, murky pro­gram­matic dig­i­tal ad­ver­tis­ing ecosys­tem that many ad­ver­tis­ers are pulling out of. And I think this is an in­flec­tion point for the in­dus­try, where ad­ver­tis­ers won’t have to con­tinue to pay a pre­mium to the du­op­oly [Google and Face­book] for the plea­sure of us­ing their walled gar­dens. Blockchain will give con­fi­dence to brands that their money is well spent and will pro­vide ac­count­abil­ity to ev­ery­one in the ecosys­tem. And that will ul­ti­mately be very good for busi­ness over the long haul.”

With time, agen­cies and ad­ver­tis­ers will re­alise the po­ten­tial sav­ings that can be achieved through blockchain based tech­nolo­gies.

- Bassam Rizk, data and tech­nol­ogy di­rec­tor at Trans­act, OMD’S new e-com­merce arm The ge­nius of blockchain means that data and in­for­ma­tion can be main­tained by mul­ti­ple part­ners so as not to make the data de­pen­dent on any one party. - Daniel Gould­man, co-founder of Ternio

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