Today, it can be noted that the sphere of advertising has been going through certain changes in the recent years mostly due to the development of various technologies. Such revolutionary technologies that have been leading such changes include the blockchain technology. The use and application of the blockchain in advertising is quickly becoming popular and has the potential to solve various bottlenecks troubling the field of digital marketing. This article tries to discuss different scopes and opportunities of using the blockchain in advertising as well as the possible advantages and disadvantages of it.
Understanding Blockchain in Advertising
To know more about how blockchain has influenced advertising, let us first define what blockchain is together with its relevance to the advertising business. Blockchain is decentralized, distributed database technology that keep record of an assorted transaction across a network of computer systems. It makes data transparent, secure and non-interchangeable which makes it suitable for many sectors of the economy and advertising in particular due to the following reasons.
Blockchain is an unalterable record of transactions that are shared across a number of computers in a network. This structure of data records guarantees that the records created are unalterable and that all participants are aware of the system. These features make blockchain highly useful for the advertising supply chain to track and record the delivery of advertising and the corresponding payments. There are positive implications of blockchain in advertising for advertisers, publishers, and consumers.
Transparency of the Ad Supply Chain
Perhaps one of the greatest issues in today’s digital advertising is the fact that the chain through which ads are delivered is often opaque and highly intermediated. Some of the many players include demand side platforms, sell side platforms, ad exchanges etc. Blockchain in advertising remedies this problem by incorporating a system of shared records that keep an immutable record of all transactions along the chain. This provides a clear overall look at the supply chain flow to advertisers and may also help to reduce some level of fraud.
Preventing Ad Fraud
Fake traffic and bots in advertising is a major issue that has been estimated to cost advertisers and publishers over $19 billion annually. Preventive measures that have been put in place have not been very effective in controlling the problem to a certain extent. Incorporating blockchain in advertising can help in creating an immutable and distributed ledger that can capture real numbers of views and eliminate fake entries. This goes a long way in preventing wastage of money on fake ad impressions. Advertisers would be convinced that the adverts have been viewed by real people.
Improving Ad Viewability
Viewability determines whether the placed digital ad was seen by actual human beings. The current benchmark figures are significantly low with 50% of the display ads and 65% video ads being viewed. Blockchain in advertising can increase the viewability by creating an immutable record of the ad impression that is served to real people and that is viewable in-browser. This enables the advertisers to have efficient control of the viewability of their advertisements to manage the budgets effectively.
Better Targeting due to Enhanced Data Sharing
This is particularly important to consumers since it helps in marketing personalization and serving of targeted advertisements. However, major data privacy regulations have put checks on brands by limiting their access to the user information. Blockchain in advertising provides consumers with the ability to own their data. It allows them to safely disclose certain personal data to advertisers in an encrypted format on the blockchain without disclosing their identities. This makes it possible for advertisers to use sophisticated targeting and customization without compromising user privacy by not disclosing their identity.
Acceleration of Reconciliation and Payment Clearance
A major issue in digital advertising is that actual data from the publisher and the advertiser rarely matches and this causes disparity that leads to delayed reconciliations and therefore delayed payments. Blockchain in advertising, which has the transparent and shared ledger, avoids this problem. Smart contracts for reconciliation mean that instead of waiting for advertiser’s impression count and negotiation, the publishers get well-deserved payment faster. Fewer payment delays are very helpful for small publishers.
New Token-Based Rewards Model
It is also important to make use of blockchain to allow users to earn back money through ad view and data sharing rather than just the publisher and advertiser. With the help of cryptographic tokens, the level of user attention can be estimated and specifically targeted actions encouraged within the advertising industry. This leads to a value exchange where users who add value are compensated in equal proportion. Blockchain-based brand loyalty programs can also play an added role in boosting engagement.
Enhanced Security
While user data is stored in centralized servers and can easily be hacked, blockchain’s architecture is distributed, and there are no single points of failure. Blockchain in advertising helps in protecting the user identities and other sensitive information like advertising budgets and publisher payments as they are encrypted and stored in the peer-to-peer network which becomes hard for hackers to violate.
Conclusion
The innovative technology of blockchain is expected to bring a lot of change in digital advertising to solve the problems such as ad fraud, transparency, viewability, privacy, and payments. In advertising, using blockchain addresses various challenges for stakeholders by providing security, transparency, trust and the capability to facilitate fast payment solutions inherent in the technology.
While adoption is still nascent, groundwork has been established with consortiums such as AdLedger and projects like IBM and Mediaocean exploring blockchain solutions. Over time as the technology advances and as the systems become scalable, blockchain technology would integrate itself into the digital advertising and marketing shift as an infrastructural layer. Thus the early adopters of this innovation will be the advertisers and publishers who will secure themselves sustainable competitive advantages in the long future.
