Is Blockchain the next big advertising thing

10 Aug 2018

The buzz over blockchain has grown in the past few years, as can be seen in the $2.1 billion dollars forecasted to be invested in the technology in 2018.While eyes and investments have shifted to blockchain as digital currencies, like Bitcoin, have become popular, there are more ways to use blockchain technology than by financial firms, such as by advertisers and advertising agencies. In fact, investing in the use of blockchain technology for the digital advertising world could change the landscape as we know it.

Before discussing how advertisers can use blockchain, let’s look at how the technology works, as its innovative structure is what makes it popular for financial and tech firms. As explained by Paul Dughi, vice president and general manager of WAAY-TV and AudiencePop, in a post on Medium, “[blockchain’s] tech allows digital information to be distributed, but not copied. That means each individual piece of data can only have one owner.”

This is the most important part of how blockchain works and why so many companies that use digital currency use it to secure their relevant information. It’s essentially a spreadsheet, duplicated to numerous networks of computers and updated regularly. Those less familiar with blockchain can see, through this explanation, how duplication and no one location for all data make the overall process safer and less likely to be hacked.

A New Payout Process For Advertisers 

When it comes to advertisers, blockchain technology could be used when ad platforms run ads and payout distributors and publishers. Since blockchain’s design makes it so difficult to hack or commit fraud, advertisers could have a process that is not only more secure for paying out publishers of their ads, but also could make fraudulent traffic less likely.

James Hercher, an AdExchanger reporter, writes that many advertisers and online publishers are hoping blockchain can be used to expose those who do wrong in digital ad spaces. While Hercher also writes about why blockchain isn’t quite ready for digital advertising implementation, it’s definitely a possibility considering how prevalent hacking and fraudulent traffic has become.

A 2017 report, titled “What Happens Next: How To Reverse The Rising Tide Of Ad Fraud,” estimated that global advertising revenue wasted on ad fraud in 2017 could amount to $16.4 billion, and it’s believed that this number will continue to increase. However, with the implementation of a technology like blockchain, it seems to me that the likelihood and ability to commit ad fraud would most likely lower, making the potential savings in ad dollars a huge benefit for both advertisers and publishers.

The Industry Still Needs Proof And Preparation 

Hercher succinctly diagnoses the state of blockchain and its potential use in the digital advertising world by explaining that many tech companies get bogged down in the software integrations. Blockchain-first startups need to develop proof of the benefits, and many companies get scared away when hearing the cryptocurrency jargon.

In order to take some steps toward implementing blockchain into the digital advertising industry, all stakeholders need to adopt a smart contract framework. A smart contract provides transparency and ensures that all parties deliver on the terms. The objective is to cut out the middleman. If brands can buy directly from publishers and content providers, the market will become more efficient, content providers will make more money and advertisers will have the transparency they require.

For those who are higher up in their companies, the most important thing to do is to educate oneself on blockchain, smart contracts and the technology that supports these potential changes. By having this knowledge, executives in digital advertising can start to pave the way for change to occur. 

However, I do still believe that blockchain technology will enter the advertising space slowly. Big publishers and advertisers will test and see if credible inventory becomes available. Because the process needs to dramatically change, there will be resistance and it will be difficult for a complete market transition. But blockchain technology is valuable and stands to clean up much of the challenges advertisers face with spending budgets getting the biggest bang for their buck.

While there are still some legitimate concerns, blockchain poses the potential for a drastic and positive change in the digital advertising industry and is well worth the time and effort.

Source: Andrew Degenholtz, Forbes