How Blockchain Can Help Solve Ad Fraud

The solution will require radical transparency, enabled by blockchain technology, writes Hunter Gebron, Director of Strategic Initiatives, MetaX.

As long as intermediaries have little incentive to distinguish between human and bot impressions in their reporting, ad fraud will be a problem. The solution will require radical transparency, enabled by blockchain technology, writes Hunter Gebron, Director of Strategic Initiatives, MetaX.

With the permeation of “fake news” and “click-bait” seeping into the once sacrosanct world of high-quality journalism, it seems we are already in the late stages of an information war that is being waged all around us.

Professional journalists that write in-depth and unbiased news stories chocked full of intellectual integrity are pitted against antithetical and unscrupulous click-bait hucksters. Both are using different means to achieve the same goal, readership, which in turn leads to ad revenue. But the consequences of who wins in this fight may ripple across our society for generations to come.

If we were scoring this bout, there is no question the journalists are losing. Journalism jobs are steadily in decline and have been for some time. “In the decade from 2008 to 2017, newsroom employment nationwide declined by nearly one-fourth (from 114,000 workers to 88,000).”

While most of the press around fake news centers around the Russian hacking of the 2016 political election and Facebook. There is another more insidious reason why fake news articles are written – to collect advertising revenue.

Here is a synopsis of how our ‘Free Internet’ stays free. Digital publishers (the ones that don’t want to live behind a paywall) must monetize via ad revenue. Advertisers pay publishers based on the number of eyeballs and clicks their ads receive. Consumers who want free content must contend with the endless barrage of ads that have become a ubiquitous part of our online experience. It’s not quite a Faustian bargain, yet, but it’s getting closer to resembling one everyday.

Also Read: What Is Native Advertising and How to Craft Your 2019 Strategy for Maximum Success

The important thing to know about digital advertising is that it’s a numbers game.

The more traffic digital publishers can draw into their site, and the more ads they can display, the more money they are able to collect from advertisers.

One of my favorite quotes is “show me the incentive I’ll show you the outcome” by Charlie Munger.

So let’s take a look at some incentives and their outcomes.

Digital advertising in 2018 topped out at around $111.14 billion and by 2019 it will account for 55% of all media ad spend.

The goal, if you are a publisher or website hosting ads, is to get yourself as big a slice of that $111 billion pie as you can. The incentive is to get as many eyeballs and clicks to see the ads you host as humanly (or as we’ll come to find out ‘in-humanly’) possible.

Now for the outcome.

Of the $111.14 billion spent roughly, $15 billion went straight to fraud.

Yes, you read that right, 13% of all money spent on digital ads was vacuumed up by fraudulent websites and bots in 2018. By 2020, that estimate balloons to $44 billion.

The incentive to get clicks and eyeballs leads to an outcome in which fraudsters have figured out how to game the system. Fake news is just one tentacle in a multi-armed beast that represents all the various forms of ad fraud.

A common practice, known as domain spoofing, where bad actors trick advertisers into buying on a site that isn’t really that site, is exacerbated by the complex patchwork through which digital ads travel, and that makes following the flow of money incredibly difficult.

“Why would fraudsters spoof a domain?” Imagine for a second you are a fraudster. You know that many advertisers want to buy ad placements on CNN.com. So you create a fake website that for all intents and purposes looks like CNN.com, but it’s really just a blank page with a video player on it. You then sell that fake page to advertisers as CNN.com. If it’s done well neither CNN.com or the advertisers ever knows what happened. If it’s not then it gets exposed.

Whether it takes place on a street corner in NYC or in a complex patchwork of web connections that funnels ads from point A to point Z, fraudulent inventory is fraudulent inventory. The vendor ends up not being paid and the customer gets tricked into paying for something they did not want.

‘It is difficult to get a man to understand something, when his salary depends upon his not understanding it!’” – Upton Sinclaire

The relationship between advertisers and news publications goes back a long time, at least 300 years in the United States. However, programmatic advertising has only been around for a decade. Yet billions of dollars are stolen every year. How can we stop this?

An answer may lie in distributed ledger technology. The major selling point for blockchain technology is its native property of radical transparency. All financial activity on the blockchain is recorded and visible. This is the exact opposite of digital advertising which is often likened to a ‘black box’. Money goes in and what comes out is a ‘report’ from a centralized, for-profit company telling you all the wonderful places your money was spent. Want the raw data so you can check for yourself? Good luck with that! And it’s these kinds of conditions where an activity like domain spoofing is able to thrive.

Also Read: What Is Bladtech?

Meanwhile, legitimate digital publishers are getting screwed. Money that should be going to them is being siphoned away to fraudsters.

Here is a novel concept. One that is partly inspired by the ads.txt initiative brought forth by the IAB Tech Lab. Ads.txt allows publishers to publicly declare who the authorized sellers of their inventory are.

We can apply the same principles using blockchain technology to allow digital publishers to publicly declare the authorized wallet addresses they control on the blockchain. The caveat is they will need to be comfortable accepting cryptocurrency as a form of payment from advertisers but the upside is it would completely eliminate the incentive for domain spoofing.

Remember, the main reason why domain spoofing is able to thrive is that fraudsters can collect the money to their bank accounts.

If everyone can publicly see the wallet addresses of everybody else (which is how public blockchains function) then money should never get sent to the wrong place. It would be pretty foolish to spoof a domain if you knew the money was going to be sent to the entity you were pretending to be regardless!

Getting an entire industry to get comfortable with the idea of accepting cryptocurrency is a tall order. But with $15 billion in fraud hanging over the digital advertising industry’s head, it may be time to start exploring alternative options.

Related Posts:

  • No Related Posts

Types of Ad Fraud

Ad fraud is a big, costly problem in our industry. To fight it, you have to understand the different forms it can take. The brand safety experts at Peer39 …

Ad fraud is a big, costly problem in our industry. To fight it, you have to understand the different forms it can take. The brand safety experts at Peer39 typically divide ad fraud into three categories: non-human traffic (i.e., bots); ads with zero chance of being seen (i.e., zero-percent viewability); and intentional misrepresentation. The imposters who are responsible for these kinds of fraud are savvy, and they are continually finding new and more sophisticated ways to make money by defrauding advertisers.


Here’s a closer look at some of the most common types of fraud:

Bot basics

General invalid traffic (GIVT)arescripts that run from a server such as Amazon Web Services or some other hosting provider. As their name implies, these bots are usually easy to identify because they have a static IP, user agent, and cookie ID. This makes fingerprinting them pretty easy using DSP auction logs or even web server logs to spot abnormally high clickthrough rate (CTR) or unexpected spikes in traffic that are the signatures of simple bots.

Sophisticated invalid traffic (SIVT)is not as easy to identify. These bots rotate user agents, using random proxies to rotate IP addresses, and they mimic normal “human” CTRs, so they are more challenging to detect. They are also now capable of completing complicated tasks like filling out forms or completing videos. Sophisticated bots can even put items in shopping carts and visit multiple sites to generate histories and cookies—making them look attractive to advertisers and publishers.

The unviewable

Ad stackingisacommon way that fraudulent publishers get credit for running an ad that is actually hidden behind other ads and not viewable. The publisher can thereby generate multiple impressions for a single page view, even when only the top ad in the “stack” is ever seen.

Site scams

Domain spoofingis a scheme employed bydeceitful publishers, ad exchanges, or networks to obscure the nature of their traffic to resemble legitimate websites. For example, an advertiser might sign off on a contract to run a campaign on a legitimate entertainment website with very high monthly traffic, but instead its ads end up on an unknown site. This practice is most prevalent in the programmatic space where publishers are sometimes allowed to declare their own domains and label their own site IDs. Spoofed domains are not just fake website addresses, they are also banner farms that contain bad content.

Ghost sitesare among the most difficultfraud methods for advertisers to spot. Fraudsters create content farms and use bots to mimic human traffic. The sites may then be introduced to a legitimate ad exchange, where ad impressions are made available for advertisers to buy programmatically. Exchanges usually spot these schemes quickly, but even a short lifespan can be profitable to the ghost site creators.

Zero-adsites arethosewhere advertising is forbidden, such as government or educational sites. But fraudsters still find ways to inject ads into them when a user downloads and installs a browser extension or app (such as a free PDF converter or browser toolbar) bundled with software that quietly injects unwanted ads into the user’s browser.

Fraud is lucrative

The scale of online ad fraud has a significant impact on advertising ROI and advertiser confidence because all those falsified impressions and clicks cost money without yielding conversions or revenue. It’s estimated that fraud consumes $1 of every $3 spent on digital advertising. In 2018, and advertisers lost an estimated $51 million every day to fraud, a figure that is expected to more than double by 2022. Time and time again, advertisers unwittingly reinvest in fraudulent inventory because it appears on reports to be driving results. Worst of all, ad fraud is not technically illegal, so there is minimal risk for bad actors.

Protection is possible

Because fraud schemes continually evolve, effective fraud prevention requires staying one step ahead of their game. Peer39 does this by tackling the problem from every angle, both before and after the buy. Peer39 pre-bid antifraud targeting helps marketers exclude fraud from the buy up front, eliminating zero-ad sites and other fake inventory. Peer39 post-buy solutions offer multichannel, AI-driven fraud detection and filtration that enables you to monitor viewability and detect bots and other invalid traffic threats—even difficult-to-detect schemes and domain spoofing.


Fraud isn’t going anywhere, but with vigilance, you can significantly reduce your exposure and protect your investment.

Contact a your account rep or a Peer39 account manager to keep your next campaign fraud-free.

Related Posts:

  • No Related Posts

Online Advertisers Embrace Blockchain to Fight Fraud

IBM Corp., Toyota Corp., and a growing number of startups are using blockchains to try to crack down on online advertising fraud. The complexity of …

IBM Corp., Toyota Corp., and a growing number of startups are using blockchains to try to crack down on online advertising fraud.

The complexity of online advertising and the struggle to track ad spending has allowed fraudsters to avoid being caught, attorneys told Bloomberg Law. But blockchain technology can uncover ad performance discrepancies and let advertisers and publishers know how many clicks an ad is really getting, the attorneys said.

“Blockchain dramatically reduces the incidence of fraud,” Matthew Savare, a digital advertising attorney at Lowenstein Sandler LLP and a member of the Interactive Advertising Bureau’s blockchain working group, said.

Digital advertising is increasingly dominating the ad industry. Online advertising will account for 51.8 percent of total global advertising spending in 2020, up from 45.5 percent in 2018, Bloomberg Intelligence data show.

Ad fraud is a “big deal” for the digital media ecosystem, Bloomberg Intelligence analyst Paul Sweeney said. Fraudulent activity could cost advertisers $44 billion globally in 2022, up from $18.7 billion in 2018, according to Juniper Research, a digital market research firm.

Most ad fraud comes in the form of automated accounts, or bots, that inflate ad clicks, and companies offering ad space on fake websites. Fraudulent vendors sell advertising space on websites that don’t exist, or even real sites to which they lack access. Traffic brokers sell bot traffic at low costs to publishers to make it appear that a large number of people have clicked on an ad. A complex supply chain makes it difficult to know if an ad ran where it was supposed to, and how many people actually saw it.

Low-quality publishers with fake websites are primarily responsible for digital fraud, Bloomberg Intelligence analyst Geetha Ranganathan said. “It’s not so simple however since there is a fairly long supply chain when it comes to programmatic advertising and in some cases the vendors in the ecosystem are also responsible,” she said.

Blockchain promises to help remedy the problem by making the advertising ecosystem more transparent, attorneys say. The technology allows users to see and verify transactions on an unchangeable, decentralized digital record. It allows participants in an advertising supply chain to track each transaction and identify and resolve disparities in the data.

Leveraging Blockchain

The digital ledger technology is gaining momentum as advertising companies realize the benefits of having an unchangeable record of ad performance data. The Interactive Advertising Bureau launched a pilot program in July to explore how blockchain can solve digital advertising challenges, including supply-chain transparency and data discrepancies.

IBM has teamed up with software company Mediaocean to create a blockchain platform to show marketers advertising impact and help them detect suspicious activity, Babs Rangaiah, executive partner of global marketing at IBM iX, told Bloomberg Law.

Toyota has begun using a blockchain platform by advertising analytics firm Lucidity to track ad performance and identify miscalculations and fraudulent activity. Toyota has seen its ad performance, which can include clicks and length of time spent viewing the ad, improve by more than 20 percent since using the platform, according to Lucidity.

Many Players

The digital advertising industry has had a “long history of disputes” because the players involved struggle to keep consistent records on ad metrics, Laura Jehl, co-leader of Baker & Hostetler LLP’s blockchain technologies and digital currencies team, said.

Dozens of parties—online ad networks, digital service providers, ad exchanges, and other intermediaries—are part of the digital advertising ecosystem. Each may measure ad performance differently, and some may miscalculate metrics by mistake.

Discrepancies in metrics and billing open the door for fraud, Sam Goldberg, Lucidity’s president and co-founder, said. “It’s far more difficult to get caught with a lack of transparency,” he said.

Blockchains allow advertisers for the first time to verify whether they’re getting exactly what they paid for, attorneys and industry representatives said.

All participants have access to a single, validated data set in real time showing how many ads have been placed, where they appear, how many times they’ve been clicked, and what type of audience is seeing them, Jehl said.

A majority of participants have to agree on the data for it to appear on the blockchain. Advertisers and publishers can analyze the data to detect and weed out invalid metrics, Jehl said.

“Everyone can see the same information and spend less time arguing about what ran where,” Jehl said.

Disputes Rampant

While most advertising disputes are resolved privately, according to attorneys, such disputes can lead to costly litigation.

Facebook Inc. faces allegations in three separate lawsuits that it has inflated the amount of time users are watching video ads and misrepresented the number of people an ad will reach, Bloomberg Law data show.

Alphabet Inc.’s Google faces four ongoing suits over its advertising practices, the data show. The cases include allegations that Google failed to pay web publishers for ad revenue and misrepresented how it filters out fraudulent ad clicks. A lawsuit against Twitter Inc. accuses the social network of inflating prices for ad space due to the presence of fake accounts on its site.

Advertisers and other companies will continue working to apply and build out the technology to limit fraud, Kimberly Culp, a digital media attorney and director at Carr McClellan PC in Burlingame, Calif., said.

“There’s momentum in this direction,” Culp said.

Related Posts:

  • No Related Posts

6 Ways Blockchain Technology is Addressing Challenges in Marketing

Blockchain technology creates a massive ledger, and this can come in handy especially when tracking ongoing analytics within advertising. With the …
Photo Credit: Pixabay

Many modern challenges can come up as a result of marketing with the help of new technology. If you are interested in meeting some of these challenges head-on and having success in marketing today, it remains important that you are using blockchain technology. Here are some of the top methods that are being used in blockchain technology that will address some of the greatest challenges in marketing:

Data Targeting:

The targeting data available for customers grows as a result of the blockchain. It’s now possible to eliminate the middleman with impact marketing. Rather than having to pore over consistent figures from Facebook and Google, blockchain improves transparency and this can help with brand building up trust within their customer base and with their ability to showcase the way that they are using customer data in the process.

Media can gain Decentralization:

Rather than having a constant middleman in place, there can be a form of the credit system that can remove some of the barriers in marketing. Rather than having to constantly pay into service to establish a relationship between the consumer and advertisers it is possible to establish a more direct link between the media and advertisers instead.

Verification of Fraud can improve:

There are many instances where advertising sales can be presented in front of fake bots and more. Fraud verification for marketing spending will be on the rise, and this can improve a marketing budget considerably.

Measurement/ Analytics:

Blockchain technology creates a massive ledger, and this can come in handy especially when tracking ongoing analytics within advertising. With the constant ledger of highly targeted individuals checking in on the content, it is possible to make sure that advertisers can have a consistent record of how their content is being viewed. Transactions can finally be logged for every single view, and this can improve almost every type of CPC advertising that is currently in use.

Influencers can enjoy better quality Results:

Marketing influencers will shrink in their numbers, but the impact that they can deliver can be improved consistently along the way. As influencers will know exactly where their posts are being viewed, they can have highly targeted results from all of their content. Measuring impressions and having a constant ledger of some of the people that follow them will lead to highly successful results in marketing.

It is possible that Malicious Ads could grow:

As a small answer to some of the challenges being faced in the market, there’s always a chance that the number of malicious ads could soon grow. Blockchain technology can make it easy to get around top-tier ad-block technology and introduce a series of unethical uses for certain visitor resources. The CPU power that blockchain provides could make sure that advertisers always can push through and make sure their ads are seen.

Consider some of these top changes to marketing and the way that Block Chain is making a difference today. By keeping some of these top thoughts in mind, you can work at using this technology to the fullest.


Source: Some information used in this article is from https://www.adweek.com/programmatic/4-ways-blockchain-can-address-some-of-marketings-biggest-challenges/

Related

Related Posts:

  • No Related Posts

The Current Applications Of Artificial Intelligence In Mobile Advertising

It’s not just the mobile apps that are becoming more “intelligent”. Advertising encouraging us to interact and install those apps has made its way onto a …

Mobile advertising and AI.Getty Royalty Free.

The concept of self-programming computers was closer to science fiction than reality just ten years ago. Today, we feel comfortable conversing with smart personal assistant like Siri and keep wondering just how Spotify guessed what we like.

It’s not just the mobile apps that are becoming more “intelligent”. Advertising encouraging us to interact and install those apps has made its way onto a way new quality level as well. Thanks to advances in machine learning (ML), the baseline technology for AI, mobile advertising industry is now undergoing significant transformation.

AI can reduce mobile advertising fraud

In 2018, mobile ad fraud rates have doubled compared to the previous year. To tap into the expanding marketer’s ad budgets, hackers have created a host of new tricks to their playbook. According to Adjust data, the following mobile ad threats have prevailed:

SDK spoofing accounts represented 37% of ad fraud. In SDK Spoofing malicious code is injected in one app (the attacked) that simulates ad clicks, installs and other fake engagement and sends faulty signals to an attribution provider on behalf of the “victim” app. Such attacks can make a significant dent in an advertiser’s budget by forcing them to pay for installs that never actually took place.

Click injections accounted for 27% of attacks. Cybercriminals trigger clicks before the app installation is complete and receive credit for those installs as a result. Again, these can drain your ad budgets and dilute your ROI numbers.

Faked installs and click spam accounted for 20% and 16% of fraudulent activities respectively. E-commerce apps have been in the fraud limelight this year, with nearly two-fifths of all app installs being marked as “fake” or “spam”, followed closely by games and travel apps. Forrester further reports that 69% of marketers whose monthly digital advertising budgets run above $1 million admit that at least 20% of those budgets are drained by fraud on the mobile web.

If the issue is so big, why no one’s tackling it? Well, detecting ad fraud is a complex process that requires 24/7 monitoring and analysis of incoming data. And that’s where AI comes to the fore. Intelligent algorithms can operationalize large volumes of data at a pace far more accurate than any human analyst, spot abnormalities and trigger alerts for further investigation. What’s more promising is that with advances in deep learning, the new-gen AI-powered fraud systems will also become capable to self-tune their performance over time, learning to predict, detect and mitigate emerging threats.

AI brings increased efficiency and higher ROI for real-time ad bidding

One of the biggest selling points of “AI revolution” across multiple industries is the promise to automate and eliminate low-value business processes. Mobile advertising is no exception. Juniper Research predicts that by 2021, machine learning algorithms that increase efficiency across real-time bidding networks will drive an additional $42 billion in annual spend.

Again, thanks to robust analytical capabilities ML-algorithms can create the perfect recipe for your ad, displaying it at the right time to the right people. Google has already been experimenting with various optimizations for mobile search ads. The results so far are rather promising. Macy’s, for instance, has been leveraging inventory ads and displaying them to customers’ who recently checked-up on their products and are now in close geo-proximity to the store holding the goods they looked up a few hours ago.

AdTiming has been helping marketers refine their approach to in-app advertising. By leveraging and crunching data from over 1000 marketers, the startup has developed their recipe for best ad placements. “Prescriptive analytics will tell our users when is the best time to run their ads; what messaging to use and how frequently the ad needs to be displayed in order to meet their ROI while maintaining the set budget,” said Leo Yang, CEO of AdTiming.

Just how competitive AI-powered real-time ad bidding can be? A recent experiment conducted by a group of scientists on Taobao – China’s largest e-commerce platform – proves that algorithms are performing way better than humans.

For comparison:

  • Manual bidding campaigns brought in 100% ROI with 99.52% of budget spent.
  • Algorithmic bidding generated 340% ROI with 99.51% of budget spent.

It’s clear who’s the winner here.

AI enables advanced customer segmentation and ad targeting

Algorithms are better suited for detecting patterns than a human eye, especially when sent to deal with large volumes of data. They can effectively group and cluster that data to create rich user profiles for individual customers – based on their past interactions with your brand, their demographic data and online browsing behaviors.

This means that you are no longer targeting a broad demographic of “women (aged 25-35), based in the US”. You become capable to pursue more niche audiences, exhibiting rather specific behaviors e.g. regularly engaging with hair care products in the luxury segment on social media. This insight can be further applied by an AI system when entering an RTB auction to predict when your ad should be displayed in front of the consumer (matching your profile) and when it’s worth a pass.

The best part is that AI-powered advertising is no longer cost-prohibitive for smaller companies. With new solutions entering the market, it would be interesting to observe how the face of mobile advertising will change in 2019 and onward.

Related Posts:

  • No Related Posts