Of the billions of transactions conducted over the internet daily, a very large proportion of them are non-human actors looking to pervert the transaction. Whether this a malicious ’bot’ looking to scam money from on-line ads or a ‘bad actor’ looking to intercept a financial transaction, despite the vast amount of technology being deployed to prevent such ‘fraud’ the internet is not a safe place. Up to 30% of on-line advertising is unseen by consumers, affecting about 21 trillion online ads annually. Over 50% of clicks from social platforms to websites are non-human , and with Google and Facebook between them making over £150bn revenue in 2019 that is a lot of wasted cost. Global ad fraud is predicted to cost an unprecedented $23bn this year and could reach $30bn including indirect economic and social costs. Financial services firms, governments and organisations spend billions trying to prevent these issues and continue to fail.
When any individual accesses a web site over the public internet, that individual can never be 100% sure it is the website they think it is; and conversely the web site can never be 100% sure the ‘person’ is exactly who they say they are. According to the FT, “The scale of the fraud we found is jaw-dropping. The industry continues to waste marketing budgets on what is essentially organized crime.” By throwing technology and cost at the problem we can get close to 100% in the first instance; but the second instance is far less than 100%. It is a global growing problem in need of a new approach.
Only in the last year or so has technology matured to the point that Distributed Ledger Technology (aka ‘blockchain’) and AI can process sufficient transaction volumes at sufficient speed to be focused on solving this global issue. Forbes recently quoted: “And lastly, an ultimate solution to ad fraud could be the creation of a global ad blockchain, a distributed ledger of online interactions that unites all actors in the ad ecosystem under a single and open platform. This could drive transparency and detect and eliminate fraud nearly instantly. But that solution is still years away from being implemented in a meaningful way.”
Through recent InnovateUK-funded, ground-breaking research, Beaconsoft and Z/Yen have designed a solution to this problem – ‘Veracity’ - that can be developed and deployed now, years ahead of the Forbes prediction. Veracity uses ChainZy to share information amongst advertisers confidentially. By sharing information, with no single party 'owning' the data, fraudulent ad systems can be identified by advertisers independently. The solution is suitable for any consortium of advertisers trying to gain control of the advertising platforms inadvertent propensity to encourage fraudulent behaviour.
 “The Economic Cost of Bad Actors on the Internet, Ad Fraud 2019”, https://www.cheq.ai/adfraudcost
Srinivasan, Dina, "Why Google Dominates Advertising Markets: Competition Policy Should Lean On The Principles Of Financial Market Regulation", Stanford Law Review, Journal Article, Volume 24, Issue 1, pages 55-175 (7 December 2020). [Z/Yen applied similar principles to gambling markets for the Gambling Commission in 2008]