Blockchain Cases for Digital Advertising. Adtech Industry Review

AdTech is an abbreviation of “advertising technology”, which most frequently refers to digital tools and various types of analytics that are applied to marketing. Increased demand for innovative solutions has led to the emergence of numerous adtech corporations, such as Perion, Appnexus, Mediz Meth, and Live Ramp. These enterprises provide clients with corporate branding services, artificial intelligence solutions, digital advertising and data management tools.

Ad Fraud

Ad businesses help their clients to address a set of relevant marketing issues, such as fraud, transparency, and viewability. According to Ken Brook, a founder of VidRoll and MetaX, the most significant problem of the digital advertising industry today is fraud and the lack of transparency. Organizations invest massive amounts of money in advertising campaigns, which in most cases, are simply ineffective. Advertising agencies use bots to click on ads to hide disappointing results and present fake figures to their customers. Moreover, advertisers usually apply automated technology, so it might be unclear to a client where the company’s ad is placed. Corporations cannot monitor the efficiency of their advertisements leading to a significant amount of funds wasted on unnecessary and ineffective marketing technologies.

The WSJ quoted Juniper Research who estimated the cost of fraud at $14 billion in 2017 and predicted its growth up to $19 billion in 2018. The following chart shows the level of ad fraud and its predicted increase in the period between 2011 and 2021.

 

Blockchain has become a potential solution to help eliminate fraud in the industry. The technology allows creation of a database that is transparent and immutable so that a customer can quickly check whether the users viewing their ads are members of their target audience. MetaX has been one of the first companies to introduce this innovation in the market. The company allows its customers to coordinate a digital ad supply chain saving their money and time. The CEO of the organization claims that blockchain can provide digital businesses with a whole set of benefits, but fraud elimination is their first target. This step will contribute to the creation of trusting relationships between consumers and advertising agencies.  

Data Management

Information is an essential component of the digital ad market. Market players who can use their data efficiently, can gain a significant competitive edge in the industry. This is where blockchain comes in to play. Comcast, a global telecommunications corporation is developing a Blockchain Insights Platform, which aims at improving targeting, execution, and management of all onscreen ads.

The primary application of the innovation is to match customer experience with a particular advertisement. This change will lead to improved targeting since it will allow the showing of ads to their target audience only and avoid wasting advertisers’ and viewers’ time with content irrelevant to them. Employees claim that the integration of blockchain in the industry will benefit all parties and open potential revenue streams to participants that will emerge from the generated data insights.

Enhanced Customer Experience

Before advertising agencies develop an ad for their customers, they should gather data regarding the age, sex, and occupation of their target audience. It is vital to align the content of an advertisement with the primary needs and preferences of potential consumers to make it useful and impactful. With the implementation of blockchain technology, advertisers will be able to obtain this information from the customer, which will contribute to the credibility of the data. In the past, companies used old-fashioned technologies, which allowed them to get information about customers’ salary, age or experience. Blockchain will allow advertisers to build up client profiles with the data that consumers want to share in one swoop. This method will help an organization to improve the targeting of their products.

Clients pay for goods not only with their money but also with their attention. It is vital for a customer to obtain information that will be useful to her in the future. Blockchain will allow the customizing of ad content to the individual’s needs, which will positively affect viewer experience. Taking the concept of the BAT project as an example, one can see the implementation of the Proof-of-Brain for the new digital advertising.

Example from Basic Attention Token (BAT) project

One more advantage of blockchain for corporations is the possibility to create a communication channel with their target audience and interact with potential consumers. Blockchain presupposes peer-to-peer transactions, eliminating the need for an intermediary. It means that brands will have a chance to communicate directly with clients increasing their influence over consumer choices and behavior.

Future Application

The impact of blockchain on advertising technology is hard to overestimate. It allows companies to create new powerful digital relations with clients, which positively affect consumer experience and advertising content. Companies can customize advertisements to the needs of the target audience and avoid wasting money on unnecessary broadcasts. Experts predict that corporations will start using smart contracts, which are self-executing and self-enforcing. The application of new technology will help to automate the buying and selling processes. This step will allow the purchasing of any commodities at the predicted price in the future. This innovation will open a new revenue stream for organizations and improve digital advertising.