Fighting Back Against Ad Fraud… Here’s How We Can Ensure A Brighter Future

Tony Dziekonski
May 30 · 4 min read

There have been countless cases of ad fraud, robbing advertisers of millions of dollars. Operations like Methbot created fake “bot” traffic to view ads on fake websites, costing advertisers at least $7 million in wasted inventory. Additionally, operations like ZeroAccess cost online advertisers as much as $2.7 million a month, and they’ve stolen at least $29 million by “viewing” ads with computer programs, not humans.

Sure, the U.S. Justice Department has been cracking down on these operations, charging eight people with digital ad fraud last year, and that’s a great step to punish past transgressions. But how can we ensure a brighter future and stop these operations from forming in the first place?

We sat down with Sarah Feinberg, former Obama White House official and current MadHive advisor, and Gabe Greenberg, MadHive advisor and GABBCON CEO and Co-Founder, to dive into this issue.

1) What do digital fraud indictments mean for the advertising industry?

Feinberg: First and foremost, it’s just good to know that there’s finally a cop on the beat. The timing is right — it sends a message to the industry: time to clean up your act, or risk action being taken by law enforcement. I’m not sure it’s a threat so much as a signal that things are truly out of control.

Greenberg: Right now, we in the industry control our own destiny; but if the industry doesn’t band together and take action — we won’t be in control for much longer. Marketers and agencies have been speaking out about this issue for some time. Because we have failed to self-regulate thus far, it is no surprise that law enforcement is starting to step in and has taken notice. Self-regulation is key here if we can effectively pull it off. There is no doubt that regulators and policymakers will step in next, especially if they feel we are still grading our own homework and there is any question of impropriety. It is incumbent on us, collectively as an industry, to come together and create solutions that serve the greater good but that represent the industries unique needs and challenges.

2) In the case of Methbot, some charges are stemming from operations that took place years ago, how can we put our best foot forward when it comes to preventing this in the future?

Greenberg: There’s much to be done to ensure we put the best foot forward. We must finally acknowledge that the current system/open-source solutions don’t work. Acknowledging that we need more than a bandaid to resolve our issues. We must make sure we have the right stakeholders and constituents at the table when we contemplate new solutions. These points are all very important.

Feinberg: The beauty of this particular challenge, unlike so many others, is that there is actually a hard and fast solution here — the solution is transparency. Transparency is the solution in the supply-chain — how we intend to solve this problem. And it’s also the solution with the regulators and lawmakers — being transparent with those stakeholders about how we intend to go about resolving these issues.

3) Are there specific technologies and groups that seem promising to remedy this situation?

Greenberg: The underlying OpenRTB protocol and inherent flaws within the system need to be addressed. There are equally significant number of problems that stem from the walled gardens. We need a solution that does not rely on the walled gardens to provide it. We can no longer trust them to grade their homework because they’ve proven to not be trustworthy. The only promising solution I have seen is a completely new protocol, powered by blockchain and cryptography, that replaces the existing infrastructure.

Feinberg: The technology behind blockchain and cryptography is built in such a way that anyone can check the work. That simple fact can create trust across the industry, and peace of mind that the fraud is being eliminated. It’s rare that you have a solution that’s this elegant.

4) How will blockchain and cryptography play a role in the future?

Greenberg: Cryptography and blockchain are critical in our future. The challenge is getting the industry behind a new open-source protocol that serves the interests of publishers, brands and agencies vs serving the interests of ad-tech.

AdLedger, the non-profit research and development consortium building and implementing blockchain standards for digital advertising, is bringing industry players together in an open forum for collaboration. The consortium consists of top industry players like WPP, Publicis, Omnicom, MadHive, IPG, Hershey, Meredith and Coindesk. But we need more companies that are the backbones of the industry at the table — companies like Dentsu Aegis, Havas and Horizon Media — more brands and more publishers, to come on board and take back more of the media dollar. After all, it’s their inventory and media spend.

Feinberg: The most promising solution right now is CryptoRTB, which was developed by MAD Network and is being implemented by MadHive and Beachfront Media. On top of that open source-protocol, companies can develop and bring forward commercially viable solutions utilizing blockchain and cryptography.

5) Do you think regulatory officials find the technology promising?

Greenberg: It’s too early to say for sure, but I believe they will embrace it if it’s proven to be effective at addressing privacy and fraud first and foremost.

Feinberg: Regulatory and law enforcement officials want to eliminate fraud and violations of the law. Full stop. If technological solutions can do that, of course, that is both interesting and promising.

MadHive

MadHive is an end-to-end advanced advertising solution for digital video that leverages cryptography, blockchain, and AI to optimize business outcomes and deliver evidence-based accountability. Learn more at www.madhive.com.

Tony Dziekonski

Written by

MadHive

MadHive

MadHive is an end-to-end advanced advertising solution for digital video that leverages cryptography, blockchain, and AI to optimize business outcomes and deliver evidence-based accountability. Learn more at www.madhive.com.