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BizReport : Advertising archives : March 28, 2019

Expert: What brands need to understand about blockchain

While some experts believe blockchain could be a solution to ad fraud and increased digital transparency, no everyone is sold on the technology. We asked Mark Pearlstein what brands need to know about blockchain.

by Kristina Knight

Kristina: We've begun hearing more about blockchain - how could blockchain help digital marketers?

Mark Pearlstein, CRO, DoubleVerify: Blockchain offers a detailed historical view of all intermediate transactions for every impression that is bought or sold to help with discrepancy resolution and payment tracking. With blockchain, advertisers could see exactly where their digital dollars are spent. If they buy an ad from a publisher, the purchase record would be evident. Blockchain could provide a clear record of payment for every transaction, which would make fraud much harder to pull off.

Kristina: You don't believe that blockchain is the perfect solution - at least at this point - for marketers. Why is that?

Mark: At this time, the main issue is that blockchain does not work in real time and therefore cannot prevent the problem from occurring. As an analogy, isn't it better to prevent a thief from breaking into your home than catching him on videotape so you can track him down later? For a brand, prevention can make the difference between losing millions of dollars in brand equity from an advertisement showing adjacent to harmful content. Today, the fastest blockchain transaction takes 1.5 seconds. A recent analysis showed that the average Bitcoin transaction takes 78 minutes. Digital advertising transactions require a 10-millisecond response time. Blockchain cannot yet approach that kind of response time. This is why the IAB Tech Lab hasn't endorsed it yet.

Kristina: What can the ad industry do to address these issues? 

Mark: The decentralized value of blockchain that makes it so attractive as a solution, is also the source of its weakness. More specifically,  to increase the speed of the blockchain to handle real-time transactions would require significant computing power, which is costly, and with no single beneficiary in the advertising ecosystem is it unclear who will pay to solve the problem. Many industry observers believe there are too many players who benefit from transactional opacity to create a groundswell of support for a real blockchain solution.

Kristina: Do you think there is hope for blockchain, at some point, to decrease the ad fraud problem in digital marketing?

Mark: I don't think it will be the go-to solution for real-time protection, but blockchain could one day be a great tool to marry with current verification technology to provide cost transparency.

Kristina: While blockchain is developing, what can marketers do to limit the fraudulent activity related to their campaigns?

Mark: Of course, with digital ad fraud gaining in sophistication and scale, advertisers need assurances that they're not paying for phony ads that never reached their intended customers. Due to this, marketers should be working with vendors like DoubleVerify who offer innovative solutions that can proactively identify and combat digital ad fraud across all channels, including emerging ones. In fact, our Fraud Lab has the fastest, most comprehensive fraud identification methods in the industry, covering all types of nonhuman traffic and fraud.

Tags: advertising, advertising fraud, blockchain, DoubleVerify

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