The disruption of the cumbersome supply chain industry by platforms such as Waltonchain, VeChain, and Ambrosus is evidence of the potential blockchain may have on centralized systems. However, the next industry to be revolutionized after the decentralization of the supply chain ecosystem may an unexpected one.
Accountability and traceability are aspects of blockchain technology that are absent from the labyrinthine digital marketing industry, which is presently valued at over $250 billion dollars annually.
The entire digital advertising landscape is unclear, prone to interference from middlemen, notoriously centralized, and highly inefficient – making it the ideal ecosystem for the application of transparent, immutable distributed ledger technology.
Waltonchain’s WTC token and VeChain’s VEN soared over 1000% since the Q3 launch in 2017. Which blockchain platform focusing on advertising industry will follow suit?
The Digital Advertising Industry: Centralized, Opaque and Fraudulent
Digital advertising surpasses every form of advertising in the world, including print, television, and billboards. Despite its massive size, the industry is extremely centralized with few large middlemen maintaining controlling a significant portion of the market.
Google and Facebook currently dominate the digital advertising ecosystem, controlling an estimated 73% of all online ads. Data collected by the Interactive Advertising Bureau in 2017 shows that 75% of all online ad revenues are dominated by the top 10 companies. The top 25 companies account for an additional 8%, and only 18% of the revenue of the entire digital advertising market is held by the rest of the industry.
While it’s true centralized middlemen are a prominent issue within the digital marketing, the primary issue isn’t with the limited number of advertising channels available to advertisers — it’s the manner in which ad performance is tracked. The digital marketing industry revolves around impressions, which is the number of instances any given advertisement is served to a consumer.
The process of tracking impressions can and is easily disrupted by ad-bot scams, fake traffic generation techniques, and a range of other exploitation methods that obfuscate the actual value of a digital marketing campaign. This makes it extremely difficult for organizations purchasing digital marketing to determine whether it is cost-effective.
A marketer may spend over $2 million on digital marketing to achieve 1 million impressions, but it’s commonplace for half of them to be generated by bots.
This opaque, difficult to track ecosystem results in significant wastage. Published in 2017, Juniper Research’s “Future of Digital Marketing: AI, Ad Fraud, and Ad Blocking” report reveals that more than $51 million is wasted daily on fraudulent impressions. Another study by the Association of National Advertisers in 2017 found that over 9% of desktop display and 22% of video spending was inauthentic, demonstrating the extent to which digital advertising industry is compromised.
The three biggest problems facing the digital advertising industry are:
- Determining whether real people view ads
- How to track the effectiveness of advertising
- The absolute control the digital advertising oligarchy exerts over the market — all of which blockchain technology can solve simply and effectively
How Blockchain Technology is Revolutionizing the Digital Advertising Industry
The same features that make distributed ledger technology uniquely suited to the optimization of the supply chain industry make it ideal for solving issues plaguing digital marketing. Blockchain’s transparency, traceability, immutability, and efficiency are set to make the digital marketing oligarchy obsolete.
Blockchain technology eliminates the reliance on third-party middlemen crippling the current digital marketing industry. Using blockchain-based platforms, advertisers can connect directly with publishers in a completely transparent manner. The ability to transact via smart contracts ensures that publishers will be able to determine precisely what they are paying for and to only pay if smart contract terms are met.
Similarly, the transparent nature of blockchain technology eliminates the possibility of ad fraud. Impressions can be recorded on an immutable distributed ledger, making it far easier for publishers to access consumer metadata to improve campaign efficiency.
The Gugya 2017 State of Consumer Privacy and Trust report shows that consumers have an increasing understanding of the impact of data security, with 68% of consumers refusing to trust brands with their personal information.
Blockchain technology enables user metadata to be completely anonymized, or in some cases, even provide consumers with incentivization for sharing their personal data.
Bringing the digital advertising market onto the blockchain allows publishers to access meaningful, actionable information by engaging directly with both advertisers and consumers without the need for middlemen.