Blockchain – the Next Disruptor in the Ad Industry

Advertising Transparency – Can Blockchain Help?

A recent Facebook post suggested that American politicians wear jackets similar to those of NSCAR drivers – sporting all of the companies/enterprises that have contributed to their campaigns.

This kind of transparency would certainly give voters like me a lot more insight as we choose our elected officials. As opposed as I am to GMO’s in foods, for example, it would be nice to know which politicians are receiving funds from companies like Monsanto and exactly how much.

The Other Shoe

As much as consumers are not always privy to a lot of transparency in advertising, marketers suffer the same lack of knowledge, but of a different type. It used to be so simple. Advertising dollars have traditionally been spent for specific ads on specific platforms, based upon a company’s assessment of where their audiences are and where they can get the biggest bang for the buck.

Enter programmable advertising. It’s the product of improved technology, and promises to grow by “tens of billions of dollars” by 2020. The concept is not complicated. Those who buy and sell advertising enter into agreements, through a bidding process. Sophisticated algorithms are used (based on data science) to develop digital advertising in the marketplace.

The benefit to buyers is obvious. They can consider any number of ad impressions (measurements of actual views and by whom) and then enter into negotiations with sellers on an ad exchange platform. The ideal element is that buyers can buy without waste, because they are targeting exactly what their customers are looking for. All of this is accomplished through automatic algorithms that use big data.

This process also eliminates a lot of manual activity on both sides of this transaction, making it budget-friendly, as well as more scientific. Who doesn’t want precision in advertising at a better price?

There is a Catch

Programmable advertising operates within a digital supply chain with many “actors.” Unfortunately, less than ethical actors have been involved, and buyers have been victims of fraud, questionable auctions, domain spoofing, etc.

In short, issues of trust have prevented many marketers from getting on board, even though in theory this form of digital advertising has huge potential benefits.

Addressing the Trust Issues

There have been a number of recommended solutions to the issues surrounding programmable advertising, among them the following:

  1. Buyers and Sellers Both Must Take More Control

Because advertising money is funneled through a number of third parties (with each getting its cut), it is hard to “follow the money.” This means that when buyers and sellers choose ad exchanges, they must conduct their due diligence and demand to know how these exchanges guarantee quality and transparency. Right now, this number is small.

  1. Fight the Counterfeiting

The practice of domain counterfeiting (aka, domain spoofing), has victims on all sides. Publishers don’t get revenue and their brand reputations are lost; advertisers do not get the consumer reach and engagement they have paid for. Exchanges must be forced to invest in quality and due diligence.

  1. Demand Transparency

This is easier said than done, but both buyers and sellers should only do business with those ad exchanges that provide full exposure of their transactions and processes and everyone involved in them. If this doesn’t happen, digital advertising ends up on lower quality marketplaces. Buyers and sellers must stop accepting excuses as to why exchanges cannot provide this transparency.

Blockchain Can Provide Answers

While initially developed for cryptocurrency transactions, blockchain technology has rapidly expanded to other industries with great results. The basic concept is simple, really. Every transaction or piece of data is entered into a block with a number of other items, during a set period of time. They are verified, time and date “stamped,” and attached to the preceding block.

The block that comes immediately after is attached, and so on down the line. These blocks are unchangeable. Attempting to change them would involve altering all of the other blocks, and because the entire chain is a “distributed and public ledger,” all stakeholders would be alerted and it would be stopped.

Many business and government enterprises are adopting blockchain technology to permanently codify transactions and records. The healthcare industry uploads patient data, and there is then a permanent, accurate record of all events, diagnoses, and treatments for other medical professionals to access when necessary.

Financial institutions are now beginning to invest in blockchain in order to gain and re-gain trust of consumers. Even schools and colleges are beginning to use blockchain to record and maintain immutable student records.

The use of blockchain technology in programmable advertising has great potential. As many “players” as there are involved in these complex supply chains, having every transaction recorded in a public ledger will bring a transparency to the industry that does not now exist. Exchanges that adopt this technology will be way ahead of the competition, will demonstrate their value, and gain the trust of chief marketing officers across all industries.

The programmable advertising industry is getting a bit crowded, and new exchanges continue to be launched. Those exchanges that can give transparency to both buyers and sellers will survive and thrive. Blockchain can do this for them.

Thanks for reading!

~

Margaret Reid is a self-driven specialist who is currently working in the company The Word Point and trying to improve herself in the blogging career. She is always seeking to discover new ways for personal and professional growth and is convinced that it’s always important to broaden horizons.  That`s why Margaret develops and improves her skills throughout the writing process to help and inspire people.

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