Can blockchain combat fake clicks in online marketing?

Blockchain has the potential to increase transparency and traceability in the digital supply chain.
9 March 2020

Advertising has evolved rapidly since the dawn of the dotcom era. Source: Unsplash

Since the first banner ad was posted online in 1994, digital marketing has since come a long way — with the digital marketing software market predicted to hike up to US$75 billion by 2022 — this billion-dollar industry is emerging as marketers recognize the value of this future-forward, scalable, and measurable channel.

For organizations, success is measured based on quantitative merits (clicks and impressions), but fraud is pervasive as click farms, bots, and ghost sites are increasing. Recently, TechHQ covered the loss of billions that businesses suffered in digital advertising due to fraudulent cases.

An expert revealed that fake clicks comprised up to US$6 billion per year, out of the US$300 billion companies spent on digital ads last year.

Clearly, the digital ad ecosystem is dynamic and also prone to error due to the many participants involved. The journey from marketer to the publisher to the screens of consumers, and reverting to marketers to evaluate data performance, opens up opportunities for data leakage, human error, and cybercrimes.

In the end, buyers are not confident with the data and the ads’ impact. Meanwhile, marketers attempt a multitude of ways to manage the incredibly complex system but often to no success.

To counter this, the Media Rating Council (MRC) and the Interactive Advertising Bureau (IAB) released guidelines for ad verification to help marketers measure their campaigns with standardized targets. Essentially, the guidelines are established to counter the threats of fraud and ensure ads were reaching real audiences, not bots.

This is where blockchain comes in, as the digital ledger technology (DLT) is famed for its capacity to enhance transparency and security. Blockchain can securely verify and selectively share data across stakeholders in which a record of data sharing and tracking will be documented. With that in mind, digital advertisers can develop blockchain-based registries of verified digital outlets, eliminating dealings with click farms and fraudulent systems.

These registries, once filled, can serve as a benchmark for smart contracts on a blockchain to automatically test measures of impressions for authenticity. Besides that, DLT can store these verified measurements with a timestamp and share them across a network of digital advertisers.

Adding artificial intelligence (AI) into the mix, an added layer of protection against scams and cybercrime is created.

The design of a digital supply chain enables marketers to track the progress and impact of digital ads in a reliable manner. Marketers can also present the progress to clients, backed with real-time data.

Recognizing the value of blockchain in lifting the trust in digital marketing, a growing list of companies are hopping on the bandwagon.

In 2018, the legacy car manufacturer Toyota adopted blockchain to root out fraud when buying digital ads and experienced a 21 percent uptick in visits to its website.

Recently, leading brands such as Nestlé, McDonald’s, and Virgin Media signed up for a pilot program that utilizes blockchain to add transparency and traceability to its advertising spend; as a result, reducing opportunities for fraud.

Besides adding visibility and security in digital marketing campaigns, McDonald’s UK&I Senior Media and Budget Manager expects more benefits from this venture.

Kat Howcroft said in a press release, “This technology offers us the opportunity to see a truly transparent picture of our investment across the digital supply chain. We are also eager to understand the potential impact that this may have on our return on investment (ROI) and efficiency.”