Advertising News

AdLedger outlines how blockchain can reduce ad fraud in streamed TV

hulu OTT video streamed tv

Last week AdLedger released a report investigating fraud in advertising in “Over-the-Top” (OTT) television. The report discusses how introducing blockchain technology to the advertising industry can help to prevent such activity.

AdLedger is a research and standards consortium of publishers, brands, agencies and technology companies including Hersheys, MadHive, Publicis, Viacom and IBM.

OTT television is video content that is viewed online rather than through a traditional cable or satellite TV set. Think Netflix or Hulu.

With more and more consumers switching from satellite/cable to online television – due mainly to greater choice and freedom, as well as reduced costs – advertisers stand to benefit. The data generated by OTT consumers allows for more targeted, more cost-effective marketing.

Tim Ringel, Global CEO, of IPG-owned digital marketing company Reprise, commented: “With OTT, they [advertisers] get the best of both worlds: the value of television and efficiency of digital.”

It’s also a substantial market with 170 million subscribers in 2018, according to eMarketer. More relevant to AdLedger, MAGNA says that OTT ad spend jumped by 54% in 2018 to $2.7 billion. Hulu accounted for most of that at $1.5 billion.

However, while there are more significant opportunities, these also come with a greater risk of fraud. For instance, MadHive found that 19% of global OTT ad requests were fake.

When a consumer visits a publisher’s website, the publisher issues an ad request which goes through a lengthy supply chain consisting of many parties. Each party takes a slice of the ad revenue, leaving less for the publisher. Unlike traditional TV where the broadcaster takes 80-90%, digital advertisers receive a far smaller slice. Although AdLedger doesn’t specify figures apart from the worst case scenario where a publisher can earn as little as 30%. In general digital advertising (not OTT), a publisher typically will receive between 40-65% of ad spend.

The large numbers of intermediaries also opens the door to fraudulent requests. Most fraud takes the form of bot activity, whereby software mimics human behavior by scouring the internet and interacting with ads to increase the price. The software tends to be installed on specific devices.

Other types of fraud include publishers masking their inventory as US-based so they can charge US fees to advertisers (which tend to be higher than non-US fees), as well as an OTT version of domain spoofing.

AdLedger claim that leveraging blockchain technology will benefit OTT advertising, as well as the wider digital advertising industry.

Firstly, this will increase trust in the advertising supply chain by establishing a digital, traceable identity for each participant. Hence, identifying bots will be made easier.

The distributed ledger will also ensure instant reconciliation between parties involved in the transaction.

Consumers will also benefit. AdLedger claims the introduction of blockchain will give users control of their data.

AdLedger members are currently implementing the technology. Their findings will be published in a forthcoming white paper.