Building a transparent digital marketing ecosystem

Web 3.0 can increase transparency and accountability in digital advertising by establishing decentralised marketplaces and incentive-based ad systems.

The most recent buzzword that has been influencing the advertising market is generative AI-ChatGPT. As a natural language processing tool, it can respond swiftly to queries that are potentially disrupting the search ad markets. For instance, incorporating ChatGPT into search engines can produce marketing campaigns catered to the unique requirements and interests of individual users. Additionally, ChatGPT’s capacity to produce text that sounds like human speech may help produce more convincing and engaging ads.

Brands have been integrating generative AI and Web3 as a strategy to successfully provide intelligent and effective digital experiences.

In this regard, the face of advertising is going to change forever, as it will transform how brands communicate and engage with their customers. In a bid to successfully provide intelligent and effective digital experiences, brands have been integrating generative AI such as ChatGPT and Web3 as a strategy. With Web3, we are moving into a new era of the internet, and with its advent, we can experience a seismic shift from a centralised system to a decentralised system. With privacy breaches being the norm in Web 2.0, Web3 ensures data stays protected by the user. With the amalgamation of both technologies, advertisers will be able to target customers more effectively, and consumers will be able to keep their data private.

Ad fraud can manifest itself in a variety of ways, such as domain spoofing, ad stacking, fake social media profiles, and bots, among others.

On one hand, where advertisers can leverage new-age technologies for meeting digital goals, fraudsters too are determined to make a quick buck out of this. They are consistently getting sophisticated with their tactics using AI, which is leading to the wastage of the ad budget and hampering the effectiveness of the campaign. Therefore, entering the realm of Web3 and generative AI will require careful planning, instruction, and preparation. Furthermore, advertisers will need to be aware of what they are up against in this brand-new environment.

Understanding the ad fraud menace

The misuse of any new technology always occurs shortly after its introduction, and it is evident in the field of online advertising as well. Ad fraud is an issue that emerged with digitalisation and has become a huge problem that marketers and agencies are dealing with today. It can manifest itself in a variety of ways, such as domain spoofing, ad stacking, fake social media profiles, and bots, among others. Digital fraud drained over USD 80 billion in 2022, and Statista predicts it will exceed USD 100 billion in 2023. It is a serious issue because the sector is losing an outrageous sum of money.

Also, as technology advances, the methods used by fraudsters are changing significantly. One method that has been uncovered is a malicious AI-generated ad campaign on social media platforms that is aimed at obtaining sensitive information from users. For instance, fraudsters can particularly float what seems to be an informative document for individuals but is originally a method used for extracting data that could be used for phishing and other attacks.

The mere breach of sensitive data can lead to eroding consumer confidence, a breach of trust, and a loss of consumer loyalty. For advertisers, it can result in regulatory consequences, financial losses, and scrutiny of data handling processes, undermining the effectiveness and credibility of advertising efforts. It is a reminder of the new potential threats that companies can encounter as fraudsters use new-age technologies.

On one hand, generative AI has been aiding advertisers in better customer engagement, but it also poses risks for undermining customer trust and data privacy. In this regard, it is evident that advertisers must be cautious while collecting and utilising user data and ensuring that they use new-age technologies more cautiously. As a result, the need of the hour is to utilise Web3 and generative AI to foster advertising transparency.

Web3’s role in fostering ad transparency

Transparency poses a significant challenge for advertisers in the digital advertising ecosystem. However, it is the most critical element that helps advertisers optimise their campaigns and budgets as well. Furthermore, it also helps the publishers safeguard their brand image and revenue while helping customers secure their privacy and data.

Web3’s use of blockchain technology allows advertisers to keep track of every transaction across the whole advertising supply chain.

In the real world, however, transparency is often hindered by the complex system of advertising, which includes several intermediaries. In a bid to negate this challenge, advertisers can leverage the power of Web3 and generative AI to foster a more transparent advertising ecosystem.

More transparency and accountability

By establishing decentralised marketplaces and incentive-based ad systems, Web3 technology will increase transparency and accountability in the digital advertising sector. Although the current ecosystem faces many difficulties, including ad fraud, data privacy issues, and a lack of transparency, Web3’s use of blockchain technology allows advertisers to keep track of every transaction and offers better transparency throughout the whole advertising supply chain.

Examining and confirming the consumer journey through verified ad delivery and confirming that a genuine human, not a bot, clicked the advertisement, would further ensure transparency. As a result, the ability of advertisers to control how their investments are managed will increase. In addition, they will be able to keep an eye on where their ads are being placed.

Decentralisation of social media

Users will have more control over their data and online identities when social media is based on Web3. It promotes independence and transparency without a central authority, in contrast to centralised social networking systems.

Censorship resistance, ownership of personal data, and more control over user-generated content are all advantages of decentralising social media. This may result in more open and transparent platforms and give users more control over data and content. It makes it possible for advertisers to efficiently place their advertisements which delivers efficient results. As a result, businesses may be able to more effectively target particular consumers.

Enhancement of personalised advertising

The demise of the third-party cookie has already caused marketing methods to change, and semantic targeting in Web 3.0 may be why digital marketers need to customise their content. Blockchain technology can be used to build a decentralised identification system that gives consumers permission-based control over their data sharing with advertisers. With the use of this data, marketers will be able to monitor customer interactions and engagement to better understand their target market.

Consumers can be targeted by businesses based on their online behaviours, interests, and activities, resulting in more specialised advertising and precise targeting. Ad campaigns will be more successful as a result, with real click-through rates and improved conversion rates.

All things considered

Web3 and generative AI have the potential to revolutionise the advertising landscape by bringing transparency to the forefront. The blockchain abilities of Web3 can be leveraged to foster better transparency in terms of decentralised social media, enhancement of personalised advertising, and reduction of ad fraud. In addition, by integrating it with generative AI such as ChatGPT, advertisers can evaluate customer preferences, plan more targeted campaigns, and increase conversion rates.

However, as advertisers and marketers utilise these technologies for mobile and social media marketing, ad fraud still poses a potential threat to ad budgets and campaign effectiveness. To prevent ad fraud in this new digital world, marketers can follow certain steps. Ideally, advertisers must understand a campaign’s traffic flow, whether it is fake or real. To understand that, they need to leverage data-driven tools that would help them track campaign performance and optimise ad spend. Furthermore, using ad fraud detection tools can help them discover any discrepancies in the traffic flow, thereby pointing towards fraudulent activities.

With increasing competition and rising concerns about privacy in the digital space, advertisers, in addition to adapting to new technologies, must also diversify their ad spending across various platforms. In addition, they must also consider ad fraud prevention tools in a bid to save their ad budget, get genuine engagements, and increase ROI in their social media and mobile marketing campaigns.

By Himanshu Nagrecha

The author is Vice President, India & South Asia, Traffic Guard

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