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How Can Blockchain Technologies Transform the Digital Advertising Landscape?

Published on: 24 julio, 2018

Billions of dollars are spent each year on digital advertising platforms. However, there are two major problems that advertisers have been struggling with for a very long period: fake bot traffic and brand safety issues.

According to the ANA (Association of National Advertisers), bot-fraud was estimated at 6.5 billion USD globally for 2017 so this indeed a great problem for the industry as a whole. Facebook, Google, Linkedin, Twitter and all the major players in programmatic media buying have been improving their technology for many years in order to mitigate the effect of bot traffic but the problem still persists as we can clearly confirm.

When it comes to brand safety, the situation is quite similar. Brands are just not happy and many have decided to personally monitor where their ads are being displayed. Multinational companies, banks and corporations running worldwide campaigns programmatically (using third-party DSPs or trade-desks), can’t just afford to have their brands compromised when having their ads displayed on questionable blog posts, videos, etc.  

It all comes down to 3 simple aspects:

1 – Brands are just tired of the tech-tax that they have to pay to intermediaries (either third-party DSPs or agencies’ trade-desks).

2 – Brands want more transparency about where, when and why their advertising campaigns are being displayed.

3 – Companies don’t want their brands compromised. They only want their ads to show up on content that protects their brands’ values.

Summarizing, brands are just tired of having to deal with Pandora’s boxes when it comes to digital advertising and many giants have threatened to pull ads from major advertising platforms if things don’t change fast. They expect (and deserve) guarantees about the transparency of their digital advertising efforts and they demand protection for their brands so that they only target the right audiences at the right places.

Can Blockchain technologies help on this needed transition? Are there any projects, already using Blockchain technologies to solve these issues? Fortunately, the answer is YES to both questions.

Blockchain technologies will solve major problems in the digital advertising landscape that are not only related to brands´ digital strategies. It entails ALL the important actors: advertisers, users and content creators (publishers).

As we’ve just analyzed in the previous paragraphs, advertisers have big doubts about the quality and transparency of the traditional digital advertising platforms.

Blockchain technologies could for the first time provide them with the chance to:

A  – Exactly know when and where all their ads are being displayed. All their ad impressions, clicks and placements could be included as transactional information on a Blockchain.  

B – Avoid middleman fees (tech-tax) by purchasing advertising directly from publishers through a token.

C – Mitigate the effects of bot traffic by incorporating user agent, IP and any other relevant information for each click directly on a Blockchain.

Those 3 items alone would considerably improve the current status quo for advertisers. They would have more transparency and control and would allow them to avoid further “unpleasant” surprises. Blockchain technologies could level up the field by allowing advertisers to exactly know (for the first time) what’s happening with their digital campaigns.

On the other side of the equation, we have both content creators and users. Content demonetization has been a major issue that content creators have been struggling with and that’s exactly the reason why Blockchain-based projects like Steemit and Basic Attention Token are getting a lot of traction. By allowing the community to directly reward content creators with an specific token, Blockchain technologies are completely disrupting the digital advertising ecosystem: content creators will depend no longer on companies’ policies to monetize their content. People (not companies with arbitrary policies), will decide what content is valuable and reward accordingly. Content creators’ income would no longer be represented by a cut on third-party companies’ profits. Instead, it would depend entirely on the perceived value of their content, which will be rewarded by users directly without middleman taxation.

Finally, users are just tired of advertising and privacy intrusion. They demand both the right to choose if they want to see (or not) ads and the right to preserve their browsing activity private. Having users in mind, Basic Attention Token is trying to contribute on this aspect as well with their associated Brave browser. This browser provides users with a higher degree of privacy and it also enables them to either choose which specific ads they want to see: no ads at all, BAT related ads or general ads.  Additionally, by regularly providing users with new BAT tokens on their wallets (airdrops from the User Growth Pool), they generate a new entire ecosystem where users get rewarded for using the browser and can at the same time, donate those tokens to their preferred content creators.

So as we’ve just analyzed, Blockchain technologies are definitely a win-win for advertisers, users and content creators: it eliminates the typical market inefficiencies of the digital advertising economy, mitigates the risks related to brand safety & bot traffic and significantly improves current conditions both for content creators and users. Digital advertising giants are obviously aware of the profound impact that Blockchain technologies will have on their business models. Hence, they are extensively researching the application of Blockchain technologies to address challenges in the digital advertising space.

In this context, RSK comes up as an alternative for developers wanting to run smart contracts and develop digital-advertising related projects using Bitcoin’s Blockchain. Using all the capabilities of the Solidity programming language, RSK allows developers to create end-to-end projects.

If you are particularly interested in this topic, you can explore the following projects: MetaX, Adchain & Basic Attention Token.