Human verification technology has proven to improve digital ad performance by increasing click-through rates by 50 percent while cutting exposure to fraudulent traffic.
Japanese advertising giant Hakuhodo partnered with Tools for Humanity and LG Electronics for the pilot. The program targeted a persistent industry problem: distinguishing real users from bots.
The Bots Problem
Digital advertisers have long struggled with fraudulent traffic that inflates impression counts while delivering no actual engagement. Industry estimates suggest a substantial portion of global ad spend—running into billions of dollars—is wasted on non-human impressions generated by increasingly sophisticated bot networks.
Traditional solutions have proved inadequate as AI-driven fraud evolves faster than detection methods. Hakuhodo’s approach took a different tack: rather than trying to identify bots, the company focused on verifying humans. The pilot used Tools for Humanity’s World ID protocol to confirm participants were real people. Each verified impression was logged to LG’s blockchain infrastructure.
The setup ensured advertisers paid only for impressions delivered to confirmed humans—a simple premise with potentially far-reaching implications for how digital ads are bought and sold.
Testing at Scale
More than 3,500 participants and over ten advertisers across electronics, travel, food, cosmetics, and education sectors joined the pilot. Hakuhodo integrated its “boba” mini-app with World ID verification and LG’s blockchain ledger, creating a closed loop where only human-verified users received ads and every impression was recorded on-chain.
The results were striking: campaigns targeting verified users showed click-through rates approximately 50 percent higher than conventional campaigns. Bounce rates—the percentage of visitors who leave immediately—dropped by around 15 percentage points, indicating deeper engagement with advertised content.
In a separate trial, Hakuhodo introduced a “Watch-to-Earn” feature that rewarded participants with points for viewing ads. This incentive mechanism drove CTR even higher, demonstrating that modest rewards can meaningfully influence user behavior when combined with verified identity infrastructure.
Broader Implications
The pilot arrives as advertisers worldwide grapple with measurement challenges posed by fraudulent traffic and AI-generated activity that increasingly mimics human behavior. Blockchain and identity verification are not new to digital advertising. However, their combination in this trial produced measurable performance improvements. The results went beyond theoretical benefits.
The approach raises questions about scalability and user adoption. Privacy-preserving verification requires users to actively participate in identity confirmation processes, which may limit reach compared to traditional ad networks. Cost considerations also remain unclear—blockchain transaction fees and verification infrastructure could offset savings from reduced fraud, depending on implementation.
Neither LG Electronics nor Tools for Humanity has published independent English-language commentary on the pilot at the time of reporting. Hakuhodo conducted the trial primarily in Japan, though its methodology may inform similar initiatives in markets where advertisers are seeking more verifiable metrics.
Market Context
The pilot unfolded against a backdrop of volatility in the Web3 ecosystem. Worldcoin (WLD), the token associated with Tools for Humanity, traded at $0.96 as of publishing, down from $1.35 earlier in the week after touching a low of $0.89 on October 11. The price movements reflected broader market trends and investor sentiment rather than any direct connection to the advertising trial.
