The state of advertising fraud has revealed overwhelming statistics over the past two years. According to them, billions of advertising spending are regularly wasted due to bot traffic, click fraud and hijacking installations. As a result, brands barely receive 44 cents from an investment in dollars they make in digital advertising. Recently, digital advertising fraud has been defined as the most profitable criminal activity that has not brought less than 2500-4100% of revenue to scammers.
Meanwhile, a growing interest in the blockchain has been vivid on all types of media, social networks and economic forums, so the subject has inevitably penetrated into technology. However, as Google Trends illustrates, the real increase in the popularity of the topic could be seen from 2016 until the time when the first blockchain-based advertising platforms were launched on the market.
Since then, advisors and marketing experts have been constantly discussing opportunities that, in their opinion, can drastically change the advertising market, freeing it from intermediaries, fraudulent traffic and inflated prices.
Despite the obvious clamor, blockchain advertising solutions so far are still quite a rarity of a common trend. Is the topic too overvalued or is the advertising world on the verge of finding a true panacea? To answer this question and stay away from the myths, first of all it is important to understand the core of technology and the stage of implementation progress.
The place of the blockchain in advertising
To begin with, blockchain advertising platforms are very different because of the information storage capacity. Blockchain ledger operates according to the principle of an accountant's book in which each share is registered, and each new one is not approved until each participant is not in agreement. After the action has been committed, there is no way to modify or modify it.
This order of work makes it impossible for the scammer to get money for the transaction that was never committed in the first place. It also becomes easy for the advertiser to check if the ad has actually been placed on the website or if it has been simulated.
The problems that blockchain can solve are closely linked to this principle and, first of all, they help to ensure trust. In fact, blockchain technology replaces trust with encryption, so there's no need to pay third parties and traffic quality referees, like Google. This opens up an even wider range of opportunities for brand owners whose budgets are limited and looking for money-saving decisions. Eliminating unneeded intermediaries also means eliminating information breaches, as companies will no longer have to process their data elsewhere.
The question of trust in advertising technology is essential. So far, advertisers are experiencing discomfort even in the delivery phase of the advertising campaign due to lack of transparency. Just to illustrate the point:
● KPIs (Key Performance Indicators) in the media plan must be clearly explained to the advertiser.
● Advertisers must be able to verify that their ads have been viewed.
● Advertisers must know that their ads have been viewed by real people (not from bots).
● The ad delivery process should clearly inform the parties about the allocation of money within the programmatic chain, including commissions to advertising technology providers.
Each block of information in the blockchain is proof that over time records all the essential facts in the fraud-resistant database, so it's safe to think that for all the problems mentioned above, advertising technology holds the promise of the great solution.
Looking at greater security of blockchain technology, many companies are trying to figure out how to make the ecosystem of advertising technology more transparent and resistant to scams. For example, IBM iX recently created a blockchain-based advertising technology consortium, quickly attracting partners like Unilever, Kellogg & # 39; s, Kimberly-Clark, and others. Working in such a decentralized system, as the creators point out, helps the brand become part of the network rather than being a payer, who should not know what's going on inside the chain.
Token-based advertising has become the second turning point in the evolution of advertising technology. For example, the co-founders of Mozilla and Firefox designed the Web browser called "Brave" with integrated security and privacy features. The solution prevents an automatic collection of user data, cookies and pop-up ads, monitoring only the user's attention patterns anonymously.
Another example is the number of solutions for mobile token platforms based on utility, such as Ethereum, many of which are regularly represented on TechCrunch Startup Alley. Utility tokens are automatically credited to the confirmation of action within the system and can be used as internal currency by the supply and demand parts for financial transactions. Users in turn also get payment for their attention in the basic attention tokens.
Has it remained a weak point?
So, if the parts of the supply and demand can trust a decentralized repository of information and can not be falsified, can we absolutely trust the data it contains? Not so fast. Data is still entered in the database by people or IT systems, therefore distortions are possible at this stage. As a result, blockchain is not a universal remedy for all problems, even if they are linked to trust.
Technological education of the next generation of marketing professionals, senior management and advertising market participants is the first step towards a deeper understanding of technology and the prevention of such problems. The challenges of implementation and the fear of moving to safer but new collaborative schemes is what makes decision makers still opt for the good old traditional ad buying schemes.
Informing people about the core of technology on a larger scale will help ensure that all parties, advertisers, publishers and marketers understand the rationale behind technological work and how it can help solve their problems. For this, the general nomenclature and taxonomy should be developed for the legal basis of the functioning of the technology. Without this regulation, the market will not be able to become a viable mechanism. Under such circumstances, many projects are likely to become highly promising but totally dysfunctional pilot versions of advertising solutions.
In addition to this, innovations require funding. When the legal base will be developed, it will be easier to develop and clarify the mechanisms of the return on investment in Blockchain projects that will replace the existing ones. The second part of the year 2018 will mark a safer transition of programmatic projects to blockchain technology as a large group of them is currently going through the beta test. The next year should bring a widespread introduction to the platforms while the market develops a legal framework for their operation.
Even IAB (Interactive Advertising Bureau) is not aloof with blockchain initiatives. The Blockchain working group was specially created by IAB Tech Lab to address the challenges associated with the integration of technology in the advertising technologies sector. The working group is developing a series of programs that uncover the implementation and testing of materials and outlines best practices for the robust functioning of blockchain-based solutions. The initiative also involves a list of curated sources that increase awareness and provide an in-depth understanding of the main blockchain mechanisms and legal aspects that must be taken into account when creating blockchain-based products.
Today we are witnessing how ideas are turning into actions, and blockchain projects are finding their fruition in advertising technology. Recently, decisions based on blockchain-based advertising technology show that players in the big advertising fields are ready to start receiving the benefits of technology. At a company level, it will ensure the transparency of complicated advertising operations. Furthermore, it will establish trust among partners, saving money and substantially facilitating their work by allowing all beneficiaries. Will the blockchain completely remodel the face of the advertising industry? Nobody knows, but has every chance to know exactly what to expect.
Ivan Guzenko is a visionary of advertising technology, fond of blockchain and CEO and co-founder of SmartyAds.