In the digital age, social media platforms have become the primary source of information and entertainment for billions of people worldwide. However, this widespread use has also led to a significant problem: the proliferation of fake advertisements. These deceptive ads not only mislead consumers but also cause substantial financial losses and erode trust in online ecosystems. Recent research indicates that ad fraud and scams are a Trillion-dollar issue, affecting both businesses and consumers.
The Devastating Impact of Fake Ads
The deceptive ads not only disrupt our online experience but also inflict real-world damage.
Fake ads are a hydra-headed monster, taking various forms. Some mislead consumers with false promises, peddling ineffective products or even outright scams. Others exploit social anxieties and prejudices, spreading misinformation and fueling societal divisions.
The number of online scams is booming. Nearly $1.026 Trillion was lost by consumers worldwide last year in scams. 78% of participants experienced at least one scam in the last 12 months. However, this is only the tip of the iceberg as 59% did not report the scam to the police or other government authorities. According to Global Anti-Scam Alliance Global State of Scams study.
This translates to lost revenue for legitimate businesses and, more importantly, deceived users who lose time, money, and potentially even their safety.
A Multi-Pronged Approach: KYB, EAS, and OAF
Combating this problem requires a multi-pronged approach. Here, we introduce two plus one key solutions: Know Your Business (KYB) and an Open Algorithm Framework (OAF), and Public Infrastructure Ethereum Attestation Service (EAS).
KYC vs. KYB: Understanding the Difference
KYC is a similar process used by financial institutions to verify the identity of their customers. However, KYB focuses specifically on businesses, ensuring they are legitimate and not involved in fraudulent activities.
KYB focuses on verifying the legitimacy of advertisers. Imagine a digital ID system, powered by blockchain technology, that verifies an advertiser’s identity and business practices. This system, along with Entity Attestation Schemes (EAS), can significantly reduce the anonymity that allows bad actors to flourish.
KYB: Building the Foundation for Trust
Think of KYB as a digital detective agency for businesses advertising online (can be multiple institutions with different types of services) for businesses. Here’s how it works:
- Information Gathering: Businesses provide essential documents like registration papers, licenses, and tax or B2B transactions records.
- Verification: This information is then cross-checked with official government databases and registries B2B records, and membership to confirm its accuracy.
- Risk Assessment: The system analyzes the business’s background, looking for red flags such as a history of complaints or violations of advertising regulations.
- Classification: Based on the verification and risk assessment, businesses are categorized as low, medium, or high risk. This helps platforms or internet users prioritize their verification efforts for higher-risk advertisers, and access to verified online business.
While KYB can be expensive to implement on a global scale due to the need for regional verification processes, EAS offers a more cost-effective and permissionless global infrastructure. Additionally, EAS allows for greater flexibility in reputation assessment, as it can be facilitated by various decentralized applications (dApps) with off-chain registries.
Open Algorithm Framework (OAF)
Another critical component of the solution is the establishment of an Open Algorithm Framework (OAF). This framework would allow for the transparent and auditable operation of algorithms that govern ad placements and content moderation. By making these algorithms open to scrutiny, platforms can build trust with their users and regulators, ensuring that ads are legitimate and relevant.
OAF’s importance lies in fostering trust. When users understand how ads are targeted and delivered, they can make informed decisions about how they interact with them.
Here’s the beauty of these solutions: KYB leverages technological advancements, while OAF requires policy advocacy. We believe this two-pronged approach creates a comprehensive defense against fake ads.
TL;DR
OAF (Open Algorithm Framework) can play a significant role in reducing the manipulation of internet users, but it’s not a silver bullet.
Here’s how:
Transparency and Scrutiny:
OAF promotes transparency in the algorithms that govern ad delivery and content moderation. By making these algorithms open to scrutiny, independent auditors can identify potential biases or manipulation tactics. This can help platforms identify and address issues before they affect users.
Less Room for Bias:
Opaque algorithms can be prone to bias, either intentional or unintentional. OAF can help expose these biases, allowing platforms to fine-tune their algorithms for fairness. For example, if an algorithm disproportionately targets certain demographics with manipulative ads, OAF can reveal this pattern for correction.
Empowering Users:
With a better understanding of how algorithms work, users can become more critical consumers of online content. Knowing how they are being targeted can help them identify potentially manipulative tactics and make informed decisions about how they interact with ads and content.
However, OAF has limitations:
- Complexity of Algorithms
Even with OAF, algorithms can be complex and difficult for the average user to understand. Technical expertise might still be needed to fully grasp the nuances of how they operate.
2. Enforcement and Regulation
OAF relies on policy changes and enforcement to be effective. Platforms might be hesitant to fully disclose their algorithms due to competitive reasons. Strong regulations and independent oversight are crucial for OAF to function properly.
3. Algorithmic Evolution
As technology advances, algorithms can become more sophisticated and potentially bypass some OAF restrictions. Constant vigilance and adaptation are needed to ensure OAF remains effective.
OAF promotes transparency in ad delivery algorithms. Instead of operating as a black box, these algorithms should be open to scrutiny. This allows for independent audits, ensuring fairness and preventing discriminatory targeting practices. Advocacy for policy changes that enforce OAF is crucial. In conclusion, OAF is a valuable tool for reducing the manipulation of internet users by promoting transparency, accountability, and user empowerment. However, it must be combined with other strategies, like regulatory oversight and user education, for a comprehensive solution.
A Brighter Future: KYB, OAF, and Trustworthy Social Media
The significance of Know Your Business (KYB) in combating fake ads on social media is immense. By verifying the authenticity of businesses, KYB can drastically reduce the prevalence of fraudulent advertisements, safeguarding consumers from scams and deception. This verification process is further enhanced by Entity Attestation Schemes (EAS), which bolsters KYB’s security and transparency.
Equally important is the implementation of the Open Algorithm Framework (OAF). OAF ensures that the ad placement process is transparent and fair, which is crucial in preventing the dissemination of misleading or harmful content. The integration of KYB and OAF can lead to a more positive social impact, envisioning a social media landscape free from misinformation and manipulation. In this environment, users can trust the information they encounter, and businesses can flourish in a transparent and fair setting.
However, without these solutions, the future looks bleak. The continued spread of fake ads will erode trust in social media, hinder its potential for positive social connections, and fuel societal divisions. Thwarting the proliferation of fake ads is challenging but not insurmountable. By merging technological advancements like KYB with policy advocacy for OAF, we can foster a safer and more trustworthy social media environment.
Key Takeaways
- KYB is crucial for verifying business authenticity, reducing fake ads, and protecting consumers.
- EAS enhances KYB’s security and transparency, public access infrastructure.
- OAF ensures transparency and fairness in ad placement, preventing misleading content.
The integration of KYB and OAF promises a healthier online environment with restored trust in digital platforms.A lack of these solutions could lead to a decline in social media trust and increased regulations.
Conclusion
The true solution to the social media fake ads problem lies in a blend of technological innovation and policy reform. By embracing KYB on the blockchain and advocating for an Open Algorithm Framework, we can create a more transparent, trustworthy, and equitable digital ecosystem. It is time for stakeholders to unite and tackle this issue for the benefit of all digital life users.
About the Author:
Jacob Lee is the Co-Founder of aDeal network, a pioneering platform leveraging blockchain technology to transform the digital advertising landscape. With a passion for innovation and a commitment to transparency, Jacob is dedicated to creating a more user-centric advertising ecosystem. Learn more about aDeal network’s mission and join the community at https://adeal.network/. Follow us on Twitter for the latest updates: https://twitter.com/adealnetwork