It is not terribly difficult to explain to an advertiser the many benefits of pay-per-click (PPC) advertising. It’s more difficult to explain click fraud and how it can negatively impact advertisers who don’t have the knowledge or experience to fight it. This leads to two questions in my mind: should fraud prevention be built into PPC services and is blockchain the answer?
Basic Principles of PPC
The basic principles of PPC are widely known. Advertisers purchase ads that run on search engines, websites, and mobile apps. Even ads for video and audio streaming platforms are now available. Companies like Salt Lake City’s Webtek Digital Marketing offer PPC services to help clients take advantage of advertising opportunities without having to know the technical side of things.
Webtek explains that PPC ads are served up by a variety of networks and platforms. Indeed, there are so many hands in the pie that PPC is open to large scale fraud. What has been termed ‘click fraud’ now costs advertisers billions of dollars per year.
How They Do It
‘Click fraud’ is a broad term encompassing a variety of strategies for fraudulently taking advantage of online ads for financial gain. The simplest example involves a fraudster setting up an ad platform through which ads are sold to unsuspecting advertisers. Then he generates click bots – small software apps programmed to do one thing: continually click ads in order to generate revenue.
Click bots and their human counterpart, click farms, are the most common forms of click fraud. But there are other forms. Fraudsters can place stacked ads in mobile apps that cannot be seen because they are so small. They can play games with image pixels. They can even embed indistinguishable ads in videos. Some possibilities are endless.
How Blockchain Could Help
The two biggest weaknesses in PPC advertising right now are the volume of players and the inability to detect ad fraud quickly enough to stop it before it does major harm. Advertisers are at a huge disadvantage because, by the time they figure out they have been targeted, the fraudster might be ready to pack up and move on.
Blockchain is seen as a potential solution to the click fraud problem. It might not stop click fraud completely, but blockchain certainly could slow it down. Blockchain could also give advertisers new ways to fight fraudsters after they have been identified.
Blockchain has a number of advantages that seem tailor-made for PPC advertising:
- Immutability – The hallmark of blockchain technology is immutability. Blockchain records cannot be altered or destroyed once they have been created. Therefore, blockchain leaves behind a trail of evidence that could make it easier to identify and go after fraud perpetrators.
- Smart Contracts – Blockchain environments can be programmed to include smart contracts. The contracts can be executed based on virtually any criteria. In terms of ad fraud, a blockchain could be programmed to immediately stop accepting ads or clicks if fraud is detected.
- Identity Verification – A blockchain can also be set up to verify identities in the PPC advertising space. Blockchain-based identity verification makes it easier to verify that clicks and ad impressions are legitimate.
PPC services enhanced by blockchain are not yet ready for prime time. Perhaps they never will be. But from the little bit I know of blockchain technology, it seems perfectly suited as a tool for reducing ad fraud.
As an advertiser, the takeaway for you is to pay attention to your PPC metrics. And if you are paying for PPC services, make sure your service provider has mechanisms in place to prevent ad fraud.
