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"$ 30 million worth of fake ads are just the tip of the iceberg."
At the end of November 2018, the Department of Justice incriminated a huge ring of digital advertising fraud, exposing the myriad of exploits of the current model of advertising technology.
Only in 2018, advertisers will lose $ 19 billion of fraud, according to Juniper Research.
Advertising fraud, it seems, generally remains unpunished
The labyrinthine system of advertisers, publishers, brokers and users has become so complicated that fraud has become the price of business, a form of institutional corruption.
But it does not have to be this way.
While blockchain technology gets the most attention to cryptocurrencies, Bitcoin and Ethereum are the best known, but it is only one application of technology. Blockchain allows a new level of trust and verifiability in areas where opacity is the norm.
While the digital advertising ecosystem should have brought new levels of knowledge to advertisers, what it created was a system of mature gamers for exploitation by bad actors.
Blockchain could have prevented the fraud described in the Justice Department's charge. While in the nascent stages, projects are applying blockchain to digital advertising technology inefficiencies and returning lost value to publishers, advertisers and consumers.
By applying blockchain technology to digital inventory, it is not possible for frauds like bots, malware, spoofing and scrub websites to occur. Blockchain applied to ad tech not only detects frauds; in the first place it prevents this from happening.
We talked with three projects and a consortium: Brave, Lucidity, Rebel AI and AdLedger to find out how the use of the blockchain could have prevented the exact type of fraud outlined in last week's indictment.
Courageous
Brendan Eich, creator of Javascript, has dedicated his experience and expertise to the creation of a new paradigm of digital advertising. The Brave Browser blocks all trackers, ads and scripts natively, protecting users' computers from malware and robots.
For Brave, attention is a currency.
And to market that they created the Basic Attention Token (BAT). This token will allow Brave Browser users to enable ad display. For each ad displayed, readers receive BAT. These tokens are then used to reward their favorite websites and publishers, peer to peer. Fraud is not possible in this environment. Clicks are not what brings revenue. The attention of a human being can not be automated.
Considering that privacy is default, the user must take the initiative and open up to advertising. The collected data will be more valuable than the current model. Once the Brave Ads are awarded, they will have accurate metrics (Basic Attention Metrics – BAM) for publishers verified without fraud.
Luke Mulks, Director of Business Development at Brave, explains how this step of opting for the Brave model makes fraud almost impossible.
"Our users see ten ads a day at most, unlike ten ads on two or three pages loaded, it's a number game, you're running a lot less ads, but we've also blocked third-party networks that are doing this stuff If we are blocking third-party programmatic advertising and third-party tracking and we are verifying that the publisher is legitimate, the surface is greatly reduced.This type of attack is something that you will not encounter on our platform by design. . "
If successful, Brave and the basic attention token will be a new paradigm; it will be the culmination of the true potential of digital advertising technology. Accurate and immutable data will allow publishers to customize their products more directly to consumers. Blockchain technology makes this possible.
Luke continues by explaining that "by default, Brave has strong privacy protection and includes blocking third-party ad networks, third-party tracking, secure connection updates, all of these things that these networks love to take advantage of. we take out the nets and remove that threat. "
Some criticize the need for a cryptocurrency for this project. And while Brave has shown impressive growth in the last year, its current 4.6 million users are not big enough to demonstrate their business model so far.
That said, they already have partnerships with big media names like the Washington Post, the Guardian and the Dow Jones Media Group. Brave could offer users privacy, but the real customers could be publishers who up to now were not able to evaluate valid data due to advertising fraud. Publishers can now recover profits that they would otherwise not have achieved.
Lucidity
Sam Goldberg, president and co-founder of Lucidity, argues that fraud will continue to thrive in the absence of agreed rules in the programmatic supply chain.
Lucidity is a blockchain-based platform that provides transparent and validated data for marketers to accurately measure the value delivered. With valid data, the effectiveness of publishers becomes clear, which in turn eliminates waste of advertising spending. At the heart of his argument is the need for standards across the board. The establishment of executive measurement standards along the supply chain would have caught discrepancies in data that are fraudulent evidence.
"What is extremely critical to go in the right direction is technology coding and the applicability of standards," says Sam. "These standards must not only be executive, but must be transparent, so a party does not have the power to change the rules to favor themselves or a favorite partner without everyone being aware of them Shenanigans behind the fog without transparency is too prevalent in the sector today. "
Without rules, there can be no trust, no consent. Consent is a fundamental characteristic of blockchain technology. The problem becomes one of application. With a large international system such as digital advertising technology, intermediaries are activated to exploit disconnections in the supply chain.
A word of order around the blockchain is the idea of "without trust".
What Sam sees in the way that blockchain can solve the problem of digital advertising technology by creating trust is a similar argument made by those who see the need for "trustless" cryptocurrency like bitcoins.
Bitcoin is peer to peer and exists without the need for a central authority that imposes trust or consent. The consent algorithm creates the standard. Application falls on math, not on a human being. Lucidity provides the same applicability to advertising technology through their protocol.
"With the correct and consistent application of standards, we can generate real value for advertisers just like Lucidity's work with Toyota. Blockchain technology is the only way to keep this promise of applied standards. We can think of some pious in the sky methodologies that might be able to do it in a hypothetical world, but in the real world, we can not do it without blockchain. Otherwise we would have done it already because the value of the offer to advertisers should have been done ten years ago. Every advertiser deserves to know that they are getting what they pay for ".
But such a move could not have been done ten years ago.
Bitcoin, the first application of blockchain technology, is only ten years old. But at that time companies like Lucidity are applying protocols to bring trust to a system that has thrived without it.
With defined standards, players who provide value will be able to demonstrate their value through the consent brought by the blockchain technology. Transparency like the one that Lucidity provides to deter bad actors even in an attempt to fraud.
And this is where Sam places the Lucidity.
"We do not consider ourselves an anti-fraud society, this is not the technology we are bringing to the table, we are creating an ecosystem that prevents many things from happening in the first place because bad actors are exposed in a transparent ecosystem just as good actors can demonstrate the value they are offering ".
AI rebel
AI rebel brings attention to identity, consent and currency to the digital advertising model. Identity is key to avoiding fraud and rebel AI uses public-key cryptography to ensure the identity of publishers, agencies and advertisers. One of the keys to the adoption of blockchain is to avoid the interruption of current workflows. Lindsey Galloway, the CMO of Rebel AI, described it as much.
"We work with publishers to install a public and private key, and therefore have an unchangeable identity that can not be manufactured, so we work on the agency or on the advertiser side to encrypt existing ad tags. The rest of the current workflow should not be changed. "
The "envelope" of the resulting creative ad tag contains the identity of verified publishers. Verification allows moving through supply chains with the final result unlocked only when "lands on a certified publisher". If the keys match, the ads are displayed.
This use of public key cryptography validates that transactions can only be unlocked if received from the assigned public key. Only one in possession with the associated private key can decrypt. This decryption mechanism eliminates any possibility of fraud. Fraudulent actors without a private key would be powerless.
Spoofing a domain becomes impossible, explains Lindsey:
"It is in these cases where someone is trying to falsify the domain, the keys will fail and they will not match.We will send all the negative information to the platform in order to have an idea of who is doing it, what the volume is, which countries it comes from and can print it in. Advertisers are not losing money because impressions are never published on those fake websites. "
Again, with a blockchain feature in the form of public-key cryptography, fraud was prevented before it occurred, avoiding any revenue loss for advertisers.
AdLedger
AdLedger is a non-profit research and development consortium charged with implementing technical standards and global solutions for the digital media and blockchain sectors. The goal of AdLedger is to increase trust and transparency within the digital media space.
We asked Cristiana Cacciapuoti, executive director of AdLedger, how blockchain could have prevented fraud.
"You need a warehouse full of devices in order to perpetrate such a scheme.If each device is allowed to show only one ad at a time, you can not resize a & # 39; fraudulent operation.You can hash a device ID or an address IP on a blockchain and then say, okay, at that point anyone trying to run a bot-style scheme for meth would need a different device to show an ad. "
Internet without fraud
These three projects and this consortium demonstrate how blockchain can create an Internet without fraud. Courageous, lucid and rebellious intelligence prevents fraud, producing significant cost savings at every point in the supply chain. With the adoption of these solutions, the police will become redundant.
Sam Goldberg of Lucidity described the scam exposed last week as the "tip of the iceberg".
And while it may have been a banner of banners for the DOJ, $ 30 million is a drop in the bucket compared to the $ 6.5 billion stolen from advertisers in 2017. While the forces of order and advertisers become experts in threats, the scammers will evolve.
Blockchain can end this cycle. There is no place to hide. The iceberg as a whole will be exposed, melting. It will be a kind of climate change, everyone – except the scammers – will be happy.
Carlos Acevedo is VP, Content, and Donny Dvorin is GM, Never Stop Marketing, Research.
