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The digital ads market has grown to more than $550 billion. But who will fight the fraud?
Digital advertising is a growing but very fragmented industry. While the majority of the market is dominated by Google and Facebook, the rest of it remains open for competitive prices and offers. Buyers are displaying a high level of interest for different forms of digital ads. But insufficient expertise and a lack of comprehensive tools are resulting in huge losses and senseless spending. According to research conducted by GroupM fraud relating to advertising could cost companies around $16.4 billion globally. This is around 20% of the total market, and a real opportunity is present for cost optimizations.
The importance of digital ads market is very high. In 2016 digital advertising surpassed television advertising for the first time according to PWC. Moreover, the trend of programmatic ad buying is on the rise. Only 31% of digital ads were placed with programmatic technologies in 2013, but according to BI Intelligence Estimates, Magna Global, IDC, and the IAB, this number will rise up to 50% in 2018. So, this is essentially a $563 billion media and advertising industry with new, emerging technologies.
What are the sources of fraud in the digital advertising market? Nowadays many clients are are buying banners through advertising bidding platforms. These work by giving ad space to the highest bidder. They interact with demand sources and demand-side platforms. Demand-side platforms are designed to aggregate bids and publisher networks, and supply-side platforms provide relevant sources and places. Despite bringing a certain level of automation to the process, this infrastructure brings with it a list of problems. First of all, with such a large number of intermediaries, the advertiser is always at risk of fraud and non-transparency. For example, it is difficult to find out the audience of an ad, whether it be a real person or a bot, and what their impressions and feedback could be.
GroupM specialists revealed that almost 20% of all digital ads could be fraudulent or inaccurate. It means that for every $1 million spent on digital advertising, almost $200,000 are not fit for purpose. Everyone in the industry is looking for a toolset to manage this problem, collect feedback and analyze advertising effectiveness.
New Blockchain tech
ClearCoin (CLR), a successful Blockchain company is already offering a comprehensive solution for digital advertising fraud counteraction to ad agencies and large companies, including several Fortune 500 companies. By early 2018 ClearCoin has received more than 10,000 registrations, and total sales revenue exceeded $3 million. Currently ClearCoin has initiated the ICO process, and appears that the sale of tokens has been successful.
The advantage of the ClearCoin platform comes from the Blockchain architecture and ‘proof-of-history’ ledger implementation. This decentralized system allows for the storing of every ad impression for analysis. Carefully developed smart-contracts between advertisers and publishers will be able to define criteria such as campaign time, impressions, views, and other relevant parameters. The payment in CLR tokens depends on these metrics, fighting fraud and inaccuracies.
Now ClearCoin is creating a global advertising platform that will help advertisers to buy ads in the popular formats like Display, Mobile, Video, Native, Social, Audio, Television, Content, and Search Context. The platform has an open API to interact with players in the advertising industry such as Marketers, Brands, Agencies, Ad Networks, Publishers, Publisher Networks, Demand Side Platforms, Supply Side Platforms, and Data Providers.
Now ClearCoin is running an ICO to develop technology for tracking over 100,000 impressions per second (the whole industry generates about 2 billion impressions per day). They plan to announce a bidding system connecting advertisers and publishers directly and process transactions, recording them with proof-of-history Blockchain ledger. If successful, ClearCoin has to the potential to be the first next-generation advertising platform.