One of the biggest challenges currently faced by the traditional digital advertising ecosystem is that of fraudulence. While this has been an issue plaguing this multibillion-dollar industry for a while, the problem was brought to the forefront of public consciousness during the Russian Methbot Ad Fraud scheme of 2016 in which Russian hackers used a click-fraud machine to steal about $5 million a day from advertisers and publishers.

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While this has been the largest and most infamous case of fraud within the digital advertising sector to date, losing money due to hackers is not the biggest problem facing the industry. Everyday fraudulent activities, unfair cuts and mistrust amongst consumers cost over $6.5B annually for advertisers. Moreover advertisers are also forced to use multiple third-party measurements and verification tools to stave off — often ineffectively — the growth of these fraudulent practices. As a result, it has been estimated that fraudulent activities — and consequent fraud-prevention methods — end up costing advertisers approximately $51 million per day. Furthermore, a study conducted by comScore — an online analytics firm — determined that over 50% of all internal ads never even reach the public because they are lost to botnet and click-fraud attacks.

Fraudulence is the most immediate problem being faced by the world of digital advertising. However, it is by no means the only one. The following are some of the other challenges and inefficiencies faced by traditional digital advertising:

  1. Lack of transparency: The ecosystem is plagued by unscrupulous intermediaries between advertisers and publishers. Many of these middle-men do not bring value, but increase the cost of doing business resulting in only 30 to 40 cents of every digital media dollar actually reaching the publisher, according to the Association of National Advertisers (ANA).
  2. Brand safety violations: Many intermediaries don’t adhere to the targeting requirements of the advertiser which results in brand messages being delivered on poor quality sites compromising the brand’s credibility and perception.
  3. Dubious middle-men: These unnecessary additions to the ecosystem take cuts of up to 60%, resulting in the publisher being paid less than 40% of advertising revenues.
  4. Consumer mistrust: Reliable industry players struggle to prove their honesty.

In consideration of all these challenges, inefficiencies, and redundancies, it is no wonder that this $223 billion industry has been labeled the most inefficient industry in the world. However, with the rise of blockchain technology — with its decentralization and security — the world of digital advertising is ripe for a revolution powered by the blockchain.

Is there any way to combat fraud and shams in advertising? Blockchain technology is currently the only real solution to the inefficiencies that thrive in the traditional digital advertising landscape. Furthermore, one of the most revolutionary platforms that has been established to address the needs of the advertising world is Papyrus.

The Papyrus platform is designed specifically to fight all of the issues faced by the digital advertising sector – fraudulent traffic, brand safety, excessive middleman cuts, and an absence of supply chain transparency. Unique features that make it a feasible solution for practical adoption are low transaction costs, privacy management, and the execution of smart contracts based on large data volumes –  no other project has a scalable blockchain and is applying it to digital ads market in this way.

On top of its blockchain platform, Papyrus provides decentralized monitoring and money flow management tools to digital advertisers and publishers, which help them to get visibility on third parties and ad agencies, fight fraud, control money streams and optimize supply chain efficiency. These tools cannot be manipulated by any parties: data for monitoring is stored immutably and money flow management rules are automatically enforced by smart contracts. For example, an advertiser can enforce automatic rules that say “fraudulent traffic won’t be paid for and brand safety violations will imply penalties for abusers”. Verifiers connected to the system provide data to verify these rules while the blockchain guarantees their enforcement.

By providing these tools, Papyrus creates transparency, trust, and efficiency within the digital advertising supply chain. Papyrus is a neutral solution that doesn’t compete with ad platforms and service providers while bringing benefits to all of them, unless they are making money in a gray area. Using the Papyrus solution, advertisers can always check how much of their money each publisher received, what performance of ad campaigns was registered by ad trackers, and what fees were given to service providers such as ad agencies, demand-side platforms, supply-side platforms. Also, advertisers can enforce their own anti-fraud and brand safety policies. As a result, advertisers have a clear view of all transactions and pay only for provided services.

Papyrus connects advertisers, publishers, agencies, advertising platforms and verifiers within the Papyrus blockchain network to create trust, fairness, and efficiency within the digital advertising marketplace.

This unique technical solution and architecture, which utilises smart contracts built on two blockchains (Ethereum and Papyrus), is capable of processing billions of advertising events as raw data.

How can Papyrus solve the issue of fraudulence?

Papyrus has launched its MVP (pilot decentralized advertising ecosystem) that consists of an advertising network using blockchain architecture to enable the transparent purchase of advertising inventory. All calculations between advertisers and publishers are controlled by smart contracts with automatic restrictions on payments, depending on the quality of results; as verified by independent verification service suppliers.

The MVP comprises 3 primary parts — Papyrus Advertiser Account and Demand-Side Platform (DSP) backend, Papyrus Publisher Account and Supply-Side Platform (SSP) backend, and Papyrus Viewability Verifier.

The Papyrus Advertiser Account allows advertisers or agencies to create an ad campaign and verify its efficiency. The campaign is supplemented with a smart contract so the advertiser may view all commissions paid transparently and flag fraud and violations.

The Papyrus Publisher Account is meant for the publishers to gauge their websites and ad slots and insert ad units. Publishers can use the interface to analyze commissions, streams, and violations, thus allowing them to make optimal adjustments after performance analysis.

Finally, the Papyrus Viewability Verifier is the component most directly responsible for ensuring that no fraudulence takes root in the Papyrus blockchain ecosystem. It allows auditors to detect violations, fraudulence, poor user viewability, breaches of brand safety, and noncompliance with publishers’ policies regarding advertised content. Furthermore, the auditors are chosen by both the advertisers and the publishers, and as such it is in their interest to establish a reputation for fair and efficient auditing.

These complementary components and practices ensure that the interests of advertisers, agencies and ad platforms, publishers, ad verifiers, and developers are well balanced. Furthermore, the level of transparency and the emphasis on reputation prevents fraudulent practices from taking place, establishing Papyrus as the foremost solution to the fraudulence and inefficiencies of traditional digital advertising.

For additional information on the platform, you can visit www.papyrus.global.

The writer of this post is a guest. Opinions in the article are solely of the writer and do not reflect Null TX's view.