The potential to fight ad fraud with blockchain

There is an industry-wide consensus that digital advertising fraud exists and that it needs to be solved. A small subset of that industry, suggests that blockchain technology is the framework that will solve the problem. The idea is that blockchain technology and its distribution networks could (gradually) play a significant role in upending the fraud and bots that make up the programmatic digital advertising ecosystem.

"One of the difficulties in the marketplace is that it is so fragmented and it's so hard to really track where goes what," shared Nicolas Bidon, global president of Xaxis told us. He explained there are issues with publishers who will attempt to trick ad networks into thinking they are the Financial Times, for instance, which doesn't offer its audience programmatically.

"So if you look at blockchain that's where theoretically it could be an interesting technology because it's all about that ledger that you cannot rewrite, is centralized and maintains the accountability. It's an intriguing idea. But the reality is that our industry works a lot in real time."

That's the giant hurdle.  With blockchain technology in the programmatic ecosystem, there would initially be latency in campaign bidding and real time bidding.

Theoretically, blockchain technology can establish trust, accountability, and transparency in the buying & selling of digital advertising transactions. To Bidon's point above, the blockchain can protect publishers from impersonators and also from attacks intent on domain spoofing.

"Brand publishers really want to take back control," shared Tim Mahlman, global president of Oath. "Blockchain in futures markets actually do that for them."

"There are other things that need consideration," explains Eduardo Salazar, chief strategy officer at Kwangl, a white label software company that links above the line advertising with social media and the second screen. "The entity that would operate such a system, the technology platform itself and its funding. I don't have an immediate answer to the first issue, but transparency would require someone independent with representation from clients and media owners; blockchain technology could be adopted for contractual transparency, like [cryptocurrency] ethereum, and inventory traceability."

Ad fraud will need to be solved from the outside, by organizations that do not currently have a business model that benefits from it. In a market where some still value reach, views, and impressions over clicks, conversions, and business outcomes, there is less incentive to innovate towards quantifiable business results within digital advertising.