Why Blockchain Occupies a Unique Seat at the Advertising Table
As the innovation agenda continues to take the front seat in the world of advertising, blockchain technology has emerged as a promising answer for greater transparency, automation, and decentralization amidst the industry’s ongoing tussle with trust and privacy-related issues are discussed by Prateek Dayal, Chief Strategy Officer of Aqilliz.
Who could have predicted that from the humble banner ad would come this vast and intricately-woven meshwork of digital media advertising? Our industry has been so wholly transformed by digital and technological advancements that advertisers are expected to spend US$98 billion on programmatic advertising alone this year—around 68% of their total digital media ad spend. With an increased emphasis on automation, the rise of programmatic is certain to continue but there are significant hurdles ahead.
From brand safety and ad fraud to the ongoing need to comply with privacy frameworks being enacted around the globe, such concerns remain at the forefront of the decision-making table. Gesturing toward an endemic lack of transparency and trust between the various stakeholders of the industry which has led to the proliferation of intermediaries and inefficiencies across the digital media supply chain, problems surely persist. However, solutions are not far behind.
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Blockchain technology holds massive potential for introducing greater transparency, automation, and decentralization to digital advertising across the board. In the past year, we’ve seen global corporate giants like McDonald’s, Nestlé, and Virgin Media joining blockchain-powered advertising pilots, as well as research into blockchain for digital marketing being initiated by major players in the space. The work is being done and if it’s done right, blockchain could be the answer to many of the trust-related issues plaguing digital advertising.
Clearing the Path to Better Insights
Since its introduction, programmatic means of real-time bidding has become the undisputed default for the digital advertising industry. However, as is unfortunately the case with all successful experiments, there are bad actors looking to find a way to exploit the money-making machinery. Ad fraud has become a thorn in the side of digital advertisers, and the industry is constantly on the search for ways to counter the fraudulent impressions, clicks, and conversions that have cost up to US$19 billion in losses per year. The pervasive problem of ad fraud is further compounded by the siloed solutions to advertising that have been created by tech powerhouses like Google, Amazon, and Facebook, which offer little room for insight into how marketing campaigns are truly performing in the wild.
Blockchain can fundamentally transform the digital marketing space in this regard—it provides the means for recording reconciled transactions on a decentralized ledger, thereby eliminating data duplication. This then serves as immutable proof of a transaction or event having taken place meaning that campaign success cannot be falsified after the fact. By employing smart contracts in the process of tracking and reconciling published ad campaigns, stakeholders can ensure that only impressions that have been verified according to parameters encoded in the contract are being paid for. Payments can also then be automatically distributed to relevant parties based on factors such as when and where an ad was shown, who saw this ad, and whether the viewer interacted with it.
The cost-efficiencies are clear here, but the prized benefit perhaps is the ability for blockchain to introduce the sorely needed end-to-end transparency to programmatic campaigns. This ensures that stakeholders are only paying for ads that have been served on platforms that are viewable, brand-safe, and fraud-free. Simultaneously, stakeholders have better insights on which to act, enabling them to optimize their campaigns in real time and ensuring that their marketing budgets are well-spent.
Untangling the Supply Chain
Moving to digital, the expectation was that, finally, advertising would be a fully accountable activity—every cent spent on ad would be traceable, new granular metrics would help drive improved engagement, and there would be much less wastage of time, effort, and money overall. Evidently, some but not all of that has been achieved. Digital advertising spans a vast and complex ecosystem that, while adept and effective in some aspects, is still riddled with inefficiencies born of its fragmented nature. Significant duplication occurs when advertising across several major ad platforms, and so the convoluted chain of marketers, platforms, and third-parties persists.
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What we need to understand as an industry is that helping brands and marketers to achieve their outreach goals is truly a better proposition for everyone involved. With customers at the heart of every campaign, better targeting tools and campaign metrics can effectively drive more conversions. Again, blockchain can prove itself as a tool for resolving the messier aspects of the digital media supply chain, providing end to end transparency and automating much of the activity through the use of smart contracts encoded with parameters that validate whether impressions and transactions meet a pre-agreed upon standard.
Nevertheless, for blockchain to fully deliver on its potential, the marketing industry will have to find a way to work across its divides and settle on measurement standards for its practices, as well as the most fitting methods for authenticating digital identities, properties, and impressions. Amid heightened distrust of digital companies and expanding regulatory oversight, marketers need to take steps towards compliance while focusing on the bigger picture of accountability and transparency because doing so will not only boost the bottom line, but also enhance the customer experience, and that’s a win for us all.
