Patricia Freijo
May 4, 2023

How ChatGPT and Web3 will open a new can of worms for advertising transparency

Evolving technologies such as generative AI and blockchain decentralisation will create a minefield for advertising fraud, according to TrafficGuard's Patricia Freijo

How ChatGPT and Web3 will open a new can of worms for advertising transparency
The emergence of new technology always sends a ripple through the advertising community. Trending technology buzzwords annually pepper every industry event, client brief and PowerPoint presentation until the next movement arrives.

This year's marketing furore appears to centre on ChatGPT and web3. But marketers are not the only ones paying attention to these. Internet fraudsters are some of the swiftest to jump on a trending technology or topic to make a quick buck. In advertising, this appears as fake clicks, impressions and bot traffic, collectively known as advertising or ad fraud.   

By now, marketers and agencies should be well aware of the dangers and costs of ad fraud. Not only do they waste billions of advertisers' ad spend, but they also undermine a campaign's effectiveness. 

Emerging technologies like ChatGPT – a form of generative artificial intelligence (AI) – and web3 offer enticing opportunities for advertisers to reach new audiences and personalise their ad experiences. However, these technologies also have a heightened risk of ad fraud, among other potential pitfalls.   

A generative warning sign? 

Earlier this year, cyber security researchers uncovered what appeared to be the first AI-powered, malicious ad campaign aimed at hijacking business social media platform LinkedIn. This, allegedly, was intended to obtain sensitive personal information. Although far from a massive concern, this fake ad may pose an early warning of what's to come.   

Ad fraudsters traditionally syphon money from advertisers by creating fake domains to host digital ads and then flooding the site with bots. However, if fraudsters execute that on the scale posed by generative AI, then marketers have some more significant issues ahead.  

The evolution of generative AI has some benefits for the industry. If used effectively, it will allow advertisers to create personalised ad content en masse. However, it also risks further undermining consumer trust and data privacy. Advertisers must be transparent about collecting and using consumer data and ensure that their AI algorithms are fair and unbiased. As Elon Musk and other tech leaders call for a pause on AI research, it's evident that we all should treat any future generative AI projects with caution.    

A whole new internet 

Web3 marketing leverages blockchain technology to create decentralised marketplaces and reward-based ad systems. Touted as the third phase of the internet, web3 upends the central, server-based internet and creates a series of 'permissionless' decentralised blockchain networks and smart contracts.  

Although still in its nascence, marketers are already mulling over its ability to engage with consumers and track ad performance in a new way. However, its growing prominence with tech giants like Google and Meta raises questions about the scalability and interoperability of blockchain platforms and their potential for fraud and hacking.  

In addition, blockchain technology is far more complex than the average set of media-buying tools. Misinformation may be challenging to control, and scammers undoubtedly will soon increase. Delving into the world of Web3 will require thorough planning, training and preparation; marketers will need to know what they're up against in this entirely new world.  

For the present, preventing and controlling ad fraud remains a challenging task. However, there are critical evergreen tips marketers can take away for preventing ad fraud now and in the future.  

Understanding a campaign's traffic flow, whether real or fake, requires data-driven insights. Marketers can use data analytics tools to track the performance of campaigns and optimise ad spend. In addition, these tools can illuminate any discrepancies in traffic flow, thereby pointing to potential fraudulent activity. On top of that, make machine learning and AI work for any digital marketing strategy. ML, in particular, will be well-placed to meet the ever-changing atmosphere of fraud attempts.  

This year, advertisers still face Covid's impact on consumer behaviour and the economy. With rising competition in the digital space and growing concerns over data privacy, brands need to diversify their ad spending across different channels and platforms.

Rising to meet any new trend or phenomenon is always welcome in advertising, enabling the industry to continue innovating. But innovation always fuels exploitation: and if marketers cannot tackle ad fraud, they will continue to fall prey to fraudsters' tactics.  

Patricia Freijo is the vice president of customer growth at TrafficGuard.

Campaign Asia

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