Using blockchain for digital advertising

The same technology that secures cryptocurrency systems can also protect users from invasive and predatory advertising, according to a new study by researchers at the University of Georgia.

Many consumers do not understand how their data is used in digital advertising. Which devices collect which information, how companies use that information, and how they block specific ads can be a mystery. And on the other side of the coin, advertisers and publishers can face the negative consequences of ad fraud, ranging from unauthorized ads to bots that take over ad traffic and divert profits.

Blockchain can combat both of these challenges, researchers said.

“Because the advertising ecosystem is enormous, its size and complexity mean there are always bad players,” said lead author Jooyoung Kim, professor of advertising in the Department of Advertising and Public Relations in the Grady College of Journalism and Mass Communication and director. from the Cox International Center. “Advertisers and publishers cannot track them effectively, and consumers are concerned about their personal data.”

Protecting the consumer experience

Faced with digital ads, some consumers are trying to opt out of them altogether, Kim said. They use an ad blocker to prevent ads from appearing before videos or in the margins of a webpage. Others pay for premium streaming packages that cost more but forgo ads.

“When we use media, it’s kind of our personal domain and you don’t want to be interrupted by commercials,” Kim said. “However, without advertising, media companies cannot survive, which in turn will increase the cost for consumers to access entertainment, news content, as well as information about the products and brands they may need. Blockchain’s automated nature allows consumers to maximize their control over ad exposure. ”

This can increase trust in advertising, as control is placed in the hands of consumers. They can opt out of some ad categories and create an experience that appeals to their needs, as well as track how their data is used.

And because blockchain connects user information and transactions, while tracking changes and making changes visible, users experience greater transparency and companies face greater accountability than traditional hosting services, said Kyu Lee, co-author of the study who is an associate professor in UGA’s School of Computing and deputy director of the Institute of Cybersecurity and Privacy.

Customers can also become victims when a fake ad is placed on top of a legitimate ad. If the customer clicks on the ad hoping to learn more, they are taken to a fake website.

Not only can this negatively affect the user experience and make people more distrustful of digital ads, but it also diverts potential revenue from advertisers.

Protect profits by securing ads

In addition to placing fake ads, fraudsters can use bots to scam ads. These bots can click on ads repeatedly, draining advertisers’ budgets.

Digital ad fraud schemes like these are the reason 15% to 50% of ads are wasted, contributing to an estimated US$100 billion in losses worldwide by 2022, not to mention wasted consumer attention and increased potential threats to them, Kim said.

While blockchain may not completely prevent fraud from the beginning, Lee said, it clears a path to stop it. Once a fake ad is recognized, it can be traced back through the blockchain to its source and stopped.

“Blockchain allows us to track down who is a bad guy,” Lee said. “From that point on, we can easily prevent all advertising from the same scam company.”

Some digital advertising products already use blockchain to verify advertiser identities or restrict access to user data, but this is only done on a small scale. Expanding these ad networks and implementing blockchain-based digital advertising will also face challenges, according to the study.

A critical challenge is speed and scale. For example, buying Bitcoin through the blockchain network can take hours because there are security measures in place to confirm the purchase. But in advertising, where digital ads are placed within milliseconds of a consumer opening their browser, Lee said, speed needs to be increased.

“To a large extent, I believe blockchain can improve consumer welfare by giving them a better, more relevant media and advertising experience,” Kim said. “Thanks to blockchain’s efficiency, the cost of running it – apart from electricity and power consumption used – can be much lower than running a traditional ad network or ad exchange.”

To further explore potential applications, Kim and Lee also plan to create a small, blockchain-based digital advertising exchange for the UGA community. The system will be open to UGA community members such as student groups, startups, campus entities and organizations, who can post ads, Lee said, enabling researchers to apply the principles and methods explored in this paper.

The research is published in Journal of Business Research.