The online advertising industry is growing fast. From $161 billion in 2015, spend on digital advertising is now expected to top $335 billion worldwide by 2020.
Targeted ads based on user browsing history was a revolutionary development in the advertising sector. Whereas traditional advertising channels operated a scattergun approach, digital channels allow companies to purchase ad space that is directly tailored to the people who are most likely to convert to a sale.
However, spend on digital advertising is not necessarily as effective as it should be. One of the reasons is fraud. A report from Juniper Research estimates that businesses are losing a total of $51 million per day to digital advertising fraud.
Fraudsters aim to create an increase in the number of views and clicks on ads. This will, in turn, increase eligibility for higher ad revenues for publishers and ad networks—to the detriment of advertisers.
How Does Digital Advertising Fraud Happen?
These false increases in ad-based activities happen in a number of ways. Click farms are established, usually in low-cost countries such as India or the Philippines. Their employees are paid for repeatedly clicking on ads.
Otherwise, software or bots are programmed to click on ads automatically, but in the background. Malware programs may take over the hardware of a genuine user to generate clicks. Of course, none of the clicks described here will result in a sale for the advertiser.
Companies are now wising up to this, but until very recently their options to stamp it out were limited. Now, the transparency and auditability of blockchain are being deployed to provide a different solution to online advertisers.
There are already several players entering the blockchain digital advertising space. However, the one that already has well-established credentials, extensive platform experience, and an established user base in the world of digital advertising is Zinc.
Zinc is creating a new blockchain digital advertising protocol that aims to redistribute the revenue lost through fraud for the benefit of advertisers, publishers, and online users alike. Each party in the transaction stands to benefit compared to the traditional digital advertising models in place today.
The current advertising model puts users in the position of being passive participants, with their data passed around the internet to the highest bidder. This has led to an increase in consumer distrust as well as ad blocking software, which renders digital advertising useless.
With Zinc, users are in the driver's seat. By downloading the Zinc Wallet app, a user can choose which data to share with the platform and also earn ZINC tokens from viewing the ads served up to them. The ZINC tokens can then be used to purchase in-app rewards and features.
Each time a user views or clicks an ad, the Zinc protocol will record the results securely on the blockchain. This creates a more accurate way of recording advertisement clicks and views than is currently available.
It also mitigates fraud, as ad-based activities are only generated from users within the Zinc network, and not from fraudsters in a click farm, or software bots.
A Beneficial Solution for All Digital Advertising Stakeholders
In this way, blockchain in digital advertising becomes a compelling choice for all parties. A secure, reliable, and permanent database of ad transactions allows for a higher degree of trust in ad activity reporting, reducing the incidence of fraud.
For advertising companies, reduced fraud will create cost savings and likely result in more conversions. For ad networks, it will provide an enhanced reputation and likelihood of building bigger and better partnerships. For publishers, there is a clear opportunity to earn more revenue from fewer adverts.
What's more, end users will enjoy rewards via the Zinc Wallet app as well as a more custom-tailored advertising experience.
Established Partnership with ironSource
Zinc was founded by Daniel Trachtenberg, who is the former Head of Mobile Fraud Prevention and Director of Mobile Data Management Platform at ironSource. IronSource is one of the leading advertising technology companies, operating the world’s largest in-app video network.
It was during his time at ironSource that Trachtenberg began to conceive of the idea of an ad platform that actively involves end users with the aim of reducing fraud and increasing the availability of user data.
This background in digital media is helping Zinc achieve a headstart within blockchain-based digital advertising. IronSource is partnering with Zinc to provide a pre-established user base of over 1.5 billion unique active users each month. Additionally, Gil Shoham is one of the ironSource co-founders and is part of the advisory team at Zinc.
Revolutionizing Digital Advertising Without Requiring a New Platform
Unlike existing ad platforms, the Zinc vision is to actively re-engineer the entire ad viewing experience for the benefit of all parties involved. Through the partnership with ironSource, it aims to achieve this goal without requiring advertisers and publishers to use an entirely new platform.
These parties can continue using the toolset they are familiar with but without the risks of fraud and lack of data transparency. With Zinc’s experienced leadership and advisory team, the company seems well-positioned to achieve its goals.
Zinc will not be undergoing an ICO. The company has already secured $3 million in seed funding from investors and will launch a private token sale to acquire the remaining funding.
By the end of this year, the company aims to have the first app developers on board for ad publishing, together with ad networks who will support the early rollout of Zinc.