The Impact of Blockchain on Digital Advertising: Transparency as the Part of Trust in Marketing
As will be discussed in the following sections, the overall field of digital advertising has significantly evolved in the past two decades. Now, a once fairly basic phenomenon of banner advertisements on websites, has become a multi-billion industry involving intricate algorithms and data processing systems. Nonetheless, digital advertising is still a growing phenomenon, though it is not without its problems; these include; https://www.adweek.com/digital/digital-advertising-problems-are-not-going-anywhere/ Blockchain can be viewed as a solution to these problems as it will dramatically change the advertising industry. This paper aims at discussing the effects of blockchain technology within the context of digital advertising with reference to the improvement of the levels of trust in marketing.
Digital Advertising as of Today
However, in order to consider the possibilities of the blockchain it is important to assess the issues that the digital advertising faces today. The rapid growth of online marketing has led to several issues that undermine the integrity and effectiveness of the industry:The rapid growth of online marketing has led to several issues that undermine the integrity and effectiveness of the industry:
Ad Fraud: Some of the major issues include ad fraud which has been estimated to be costing the industry bill$ions in every year. Most of the fake clicks, bot traffic, and fraudulent impressions result in inefficiencies and wastage of advertising dollar.
Lack of Transparency: Thus, in a typical digital advertising campaign, the advertiser possesses relatively little information on how the advertisement is delivered and how much of his or her money is spent on reaching the target consumers as opposed to the intermediaries.
Privacy Concerns: As the application of personal data and therefore the relevancy of creating more specific ads continues to rise, privacy concerns continue to be a concern. Most consumers are now becoming conscious of the data that advertisers are capturing from them.
Data Intermediaries: Typically the digital advertising environments are complex, with the use of demand-side platforms (DSPs), supply-side platforms (SSPs), and ad exchanges. Every intermediary makes the process convoluted and expensive which makes advertising seem more complex and less efficient.
Based on these challenges, the consumer and advertisers are demanding a transparent, trust worthy and accountable system. These issues can therefore be effectively handled through the use of blockchain technology.
Understanding Blockchain Technology
In simple terms, blockchain is a distributed and decentralised database that provides transparency in storing the records of all the transactions. Each time an exchange occurs, such as a transaction, information is processed and saved into a block, and every block is connected to proceed from the other in a sequence. This architecture also provides the features of non-tamperability which implies that once records are written into the blockchain, no participant in the network can alter them unilaterally.
Some of the key features of blockchain that make it suitable for addressing the challenges in digital advertising include:Some of the key features of blockchain that make it suitable for addressing the challenges in digital advertising include:
Decentralization: Blockchain is decentralized which enables the interactions between parties to be conducted in a P2P manner. Such decentralisation may reduce or even completely cut out the need for middlemen in the digital advertising ecosystem; reducing costs whilst increasing transparency.
Transparency: Transparency is also the key to the blockchain architecture because all the participants have simultaneous access to the same version of the ledger and are able to get insights into how the transactions are being processed. Well, for digital advertising this translates to the fact that advertisers and publishers are able to monitor ad delivery, impressions and clicks in real time.
Security: The fact that blockchain is cryptographic in its architecture also makes it to be very secure. After a block has been attached, its contents cannot be changed in any way, which makes its information completely truthful and secure.
Smart Contracts: Smart contracts are computer code based contracts which automatically execute the terms of a contract without the need for external intervention. In digital advertising, smart contracts are beneficial in automating actions such as advertisement space and payment since it eliminates the risks of scams and only allows payments for engagements that have been approved.
Bettering the Transparency of Digital Advertsing
Of all the edges that blockchain brings to digital advertising, little doubt the most outstanding is the prospect of enhancing smart contract transparency. Here, blockchain brings transparency into advertising by allowing the owners of ad funds to track the precise expenditures of advertisers’ money and the results of advertising campaigns.
Today, an advertiser has to work with third parties including ad networks as well as ad exchanges to deliver the ads to the target market. The problem is this system is completely opaque to everyone but the advertisers themselves, giving them almost no way to know if the ad placements they are paying for are actually costing them any less or if the impressions and clicks they are buying are even real.
The issue is that there is usually no clear record of transactions that takes place in the advertising supply chain, and this is where blockchain can be of help. By using blockchain, advertisers can ensure the ads are placed where they want them to be, the people viewing and clicking them are real and the impressions and the clicks are legitimate. This level of transparency minimizes the occurrence of ad fraud and makes sure that an advertiser is getting his/her money’s worth.
For instance, a blockchain-based advertising can utilize smart contracts to authenticate the latter and advertisements’ views or clicks. When a user remains on the page for the stipulated time or may be when the user has clicked on the ad, the smart contract activates and pays the publisher. It also does not require the services of a third party company to verify the users and minimizes the risk of fraud.
Combating Ad Fraud
Unfortunately, fake traffic is perhaps one of the biggest problems in digital advertising. From this, scammers employ fake websites or automatic bots that give the impression they clicked the ad …they mainly steal money from effective adverting. This does not only affect the wallet of the advertiser, moreover it hampers the trust placed in the advertising model.
Blockchain’s decentralised and fully transparent structure can heavily reduce ad fraud. Thus, as all transactions are registered on a distributed ledger, it becomes almost impossible for a fraudster to alter information. For instance, it is real-time so the advertisers get to monitor their ad campaigns only paying for real people’s engagement.
Also, blockchain transparency makes it possible to prove the identity of users that interact with ads. Thus, using blockchain in creating decentralized identity, the users interacting with the ad can be proven to be real people and not bots. Such a system would prevent click fraud and also make sure that the advertisers are paying for real conversion.
Building Trust with Consumers
The trust problem is evident not only within the advertisers’ circle but also in regards to consumers as well. Within the years, there is increasing worry of how personal information is used in the media Advertisement. Many consumers remain completely oblivious of how and when their data is harvested and sold to advertisers, thus resulting to poor privacy and lack of trust on online advertising.
There is an opportunity to reverse the current relationship of distrust between consumers and advertisers with the help of blockchain. In blockchain-based advertising systems where consumers could decide on the amount of data they are willing to release to the advertisers in order to gain tokens or discount rates. This system make the relationship between a consumer and the advertisers to be less invasive and opaque, and give the consumers the means by which their data could be useful in trading non-personal information.
In addition, it is necessary to highlight the possibility of increasing the level of data security through blockchain. Consumers also feel comfortable using blockchain because the records are permanent and encrypted making it impossible for anyone to manipulate the data. These steps make the process more secure and go a long way in making the consumers trust the advertisers more.
Focussing on the Efficient Delivery of Ads
Since the digital ad environment is considered to be rather opaque, there are several intermediaries who play a critical role in facilitating the sale and the purchase of the advertising messages. These intermediaries proved to create more complicating factors and a cost within the process that is usually time-consuming and little transparent.
In the ad supply chain, blockchain offers an opportunity for cutting out the middleman since it is completely transparent. Due to the actualization of blockchain, the simplified system of direct interaction between advertisers, publishers, and the consumers of their content is, thus eliminating intermediate bodies. Such a direct interaction can eliminate costs, reduce time required in transactions and even a better advertisement system.
For instance, ad technologies with the underlying blockchain technology such as AdChain and Brave have already signaled their interest in making the ad market even more decentralized and more directly connecting the buyers and sellers of ads. These platforms remove the go-betweens because they seek to develop an efficient and reliable method of advertising.
Conclusion
Blockchain technology seems to have the potential in drastically transforming the industry by solving some of the biggest problems facing digital advertising. Due to its capability to increase transparencies, fight ad fraud, improve the relationship with consumers, and the effectiveness in the ad supply chain makes the tool to be essential to advertisers and marketers.
Current applications of blockchain in the advertising business remain admittedly minor, but this technology promises to redefine the process of buying and selling and, more importantly, viewing digital advertisements. With increased adoption of block chain solution, a clear, reliable, and efficient advertising future is on the horizon for the years to come.
