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Blockchain ready to take the fraud from digital advertising?

By Gary Stevens, Front End developer.

Blockchain technology is what fuels all cryptocurrencies, like Bitcoin and Ether, which you have heard about in the news. It started an important revolution in the financial sector and could really change the way monetary transactions are processed online.

Banks, credit card companies and legal currencies all operate through a central or governmental authority. With the blockchain system, the power is distributed among all the individual investors who manage the processing nodes. These machines work together with calculation algorithms to maintain the integrity of all transactions on the blockchain.

Now that cryptocurrencies have become more mature and common, software engineers are looking for other opportunities to use blockchain technology. One of the most interesting trends is contract management, where instead of recording financial exchanges, the algorithms will follow the ownership of digital or physical property.

The hope is that this approach can be useful in areas such as online advertising, which suffers from large-scale fraud issues. Read on to find out how blockchain could revolutionize the way businesses are marketed on the Internet and what it means to you, the consumer.

New advertising ecosystems

The existing model of online advertising suffers from a serious lack of transparency. As an editor who seeks to market a product, service or company, it is necessary to send advertising content to an intermediary who is responsible for delivering to individual websites and mobile applications. This makes it difficult to monitor where ads end up and who actually sees them.

Software developers believe that blockchain technology could simplify the whole process and, in fact, some are already in the process of creating solutions. The Papyrus platform, which is based on the Ethereum blockchain system, is a truly decentralized advertising ecosystem. The benefits should be significant, with transactions that happen faster and more reliably.

Even established technology companies like IBM are trying to enter the blockchain advertising discussion. The company has launched a tracing system that monitors marketing payments and prevents money from being transferred to wrong entities. IBM also believes that this move will reduce costs for content publishers and marketing companies.

Faster transactions

Speed ​​is another problem when it comes to the current state of digital marketing. Before an ad is hosted on a website or app, there must be a negotiation between the sender and the publisher. Most current ad networks work on a bidding system, where companies choose how much they want to pay per click or view (also known as an impression). Based on their bid value compared to others, the publisher determines the rotation and frequency of the ads.

Having such a complicated process has turned online advertising into a slow activity that is susceptible to large amounts of fraud. The blockchain movement represents an opportunity to cut off much of the time and unnecessary efforts and focus on simplifying the way transactions occur.

In particular, advertising systems based on blockchain technology will have the opportunity to support advanced programmatic functionality. With this step, publishers will block prices for the blockchain and then companies will gain the opportunity to buy real-time impressions, which offer a guarantee that their content is displayed at the time.

Obviously, by moving advertising platforms onto blockchain-based systems, marketing companies also acquire a new way to accept payments. Micro-transactions can occur between a series of cryptocurrencies and, thanks to the stability and security of the blockchain, each financial grant can be monitored and validated in an instant. This can help companies make sure that their advertising budgets are spent appropriately and are not lost for fraud.

The Rise of Browser Privacy Tools

Whenever the subject of online advertising comes out, the question of privacy is never far away. And it's completely understandable. When you consume an ad through television or a magazine, that experience is a one-way interaction.

But with the Internet, your computer or mobile device has information about you as an individual, such as age, gender and interests, and that kind of data can be very valuable to publishers. Advertising works best when it is aimed at an appropriate audience that is more likely to act on it.

Internet users have become smarter in recent years and have started to rebel against websites and applications that store personal information improperly for advertising purposes. There are a number of tools related to open source privacy available today that allows people to maintain a certain level of anonymity online. These solutions often block the content of advertising altogether or limit the way in which the user's cookies use cookies, or the small pieces of data that track your activity on the Web.

What does this mean for marketing companies? The good news is that the kind of blockchain-based platforms under development will offer a good solution to appease all parties. Because of the way in which transactions are recorded in a blockchain ledger, advertisers will still be able to collect metrics on their customers without obtaining or owning any private data.

Partnership with Machine Learning

One of the biggest challenges remains when it comes to new blockchain-based advertising platforms, and this is the puzzle on how to identify and manage non-human web traffic. Much of the fraud that occurs with digital advertising is due to the exaggerated number of automated bots that scour the web. Some of these are legitimate tools for indexing research while others have more damaging intentions. But in both cases, every time a page is recorded by a Web robot, an advertiser is billed as if it were a human being viewing the content.

If blockchain technology succeeds in solving this problem, it has the potential to save advertisers billions of dollars every year. The key will be for software developers to integrate the existing blockchain architecture with new machine learning systems to identify patterns of illegitimate activity. These impressions will then be filtered by the blockchain network and will eliminate financial waste.

About the author

Gary Stevens is a front-end developer. He is a fan of full-time blockchain and a volunteer who works for the Ethereum foundation and an active contributor to Github.

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