Blockchain advertising or how to achieve more transparency.
Transparency is one of the main basis to keep a good relation between advertisers and publishers (this is, brands and websites where ads are shown).
On one hand, brands -who invest their money to reach their target audience with their ads- want the assurance that there will be no incidents during the process. On the other hand, media want to give that confidence to advertisers and maximize their advertising money so that they can achieve the best results possible.
The issue is that digital advertising is based on an open system that uses Internet connections. This system offers many opportunities when it comes to media trading but, at the same time, it creates gaps that make it vulnerable to fraud. In fact, it has been estimated that around $19 billion were lost in digital advertising due to fraud.
Considering that the investment in digital advertising is expected to reach $427.26 billions in 2022 worldwide, it's important to guarantee transparency in the processes related to online advertising both for advertisers and publishers.
Here's where Blockchain Advertising comes in, a new way to manage the ad space trade process where we can have all the information about the steps taken from start to end. This way, in case an issue rises up, it's possible to check when it happened and who did it.
How blockchain works.
Blockchain is, according to BlockGeeks, inmutable data blocks that are managed by a cluster of computers (instead of a unique entity). These blocks are secured and bound to each other using cryptographic principles, this is, a chain. This means that all the information is available for anyone who wants to see it, making blockchain a transparent system in which everyone is accountable for their actions.
Brought to the digital advertising field, blockchain offers the possibility of creating a distributed database that allows all parties to know the reality about ad impressions , both for the advertisers as well as for the publishers.
The big advantage of blockchain is that the data in the blocks is impossible to falsify due to the way the process works. Transactions are verified by thousands of computers distributed around the globe. Once they're verified, new blocks are added to the chain and all that information is stored throughout the net - creating a unique record with a unique history. To falsify one of the blocks, it would be required to falsify the whole chain millions of times. This is the cause of its efficiency.
Only the entities with permission can access the data registered by the blockchain. As mentioned in an article by PWC, "data flows and transactions are fast, largely automated, transparent where needed, hidden by cryptography where not, and highly trustworthy for every participant — including consumers".
Challenges of blockchain advertising.
When implementing a new technology, there are always some challenges that all parties need to face. For blockchain, the main obstacles, according to PWC, are:
- The uncertainty about the legislation for this technology (considering that it's something relatively new).
- The lack of confidence from users.
- The capacity of all the networks to work together.
If parties manage to overcome these challenges successfully, blockchain can offer very important advantages to the digital advertising world - especially to fight against fraud and benefit publishers and advertisers as well as consumers.