Despite widespread public interest in blockchain applications and a significant rise in the number of blockchain startups, the technology has yet to make a dramatic impact on the advertising industry. In a recent survey of 300 agency executives, only 11 percent reported using blockchain in their media buys, while nearly half said they had no plans to do so in the future.
One reason this wait and see attitude persists is that while advertising leaders are looking for concrete blockchain applications that can address today’s challenges, the hype-machine continues to distort blockchain’s true capabilities. If we focus on immutability, one of blockchain’s greatest value propositions, advertisers can identify solutions that intersect with their greatest challenges.
A ledger that cannot be changed allows marketers to validate information and allows post activity research to be performed accurately. On a nuts and bolts level, immutability makes data portability both frictionless and reliable. The more data an advertiser’s partners write into an advertiser’s permissioned blockchain, the easier it is for that advertiser to switch agencies and take their data with them or work with a wider network of agencies for specific projects.
The ad-tech tax
Blockchain’s immutability can be an asset for advertisers looking to address the ad-tech tax. Think of the ad-tech tax as two separate pieces: unspecified fees and superfluous spending. At the moment, transparency issues make it difficult—if not impossible—for advertisers to see those costs. But both types of costs can be uncovered post-campaign completion through various blockchain projects. Once identified, buyers can adjust their systems to improve their partner relationships and streamline flow.
If advertisers want a more proactive approach to reducing superfluous spend, some firms use cryptographic proof that’s written into the blockchain to verify publisher identity and eliminate the problem of domain spoofing. By addressing that issue, advertisers not only reduce unnecessary costs in their media budgets, they eliminate the uncertainty that persists around delivery.
The end goal for advertisers is to reach the audience they want on publishers they feel are either an ideal fit for their creatives (white-list) or will not negatively impact their brand (black-list). But it’s not just a question of validating the targeted user as human—that user must also be a member of the audience segment the buyer is paying to reach. Furthermore, the buyer needs to know with a high level of confidence that the audience actually viewed the ad. Right now, the advertising industry is placing Band-Aids on top of Band-Aids to validate audiences and publishers at the speed of delivery—and the model is failing. Blockchain solutions offer an opportunity to build a more effective model without the costly Band-Aids. It will be a new business model rather than just blockchain by itself that provides the greatest benefit.
GDPR compliance and beyond
Blockchain also has a role to play in GDPR compliance. By providing a reliable method for reviewing past actions as well as determining current opt-in status, an immutable blockchain ledger allows advertisers to manage a supply chain of vendors and sub-vendors. With such a ledger in place, advertisers can be certain about where GDPR compliance might break down so they can address those issues as soon as they arise.
Going beyond compliance, the growing public concern of data breaches that helped bring about GDPR may also lead to a new paradigm for consent. As that paradigm emerges, some blockchain experts have pointed out that we need to rethink the way we currently handle consent by giving consumers the power to take back their data. Here, an immutable ledger is essential for tracking data ownership rights.
Level set your timeframe
Thinking about what blockchain can do today is a little like thinking about search circa 1998. Back then, people were talking about making the nascent internet easier to search, but nobody knew that a company called Google would someday make websites, videos, email and eventually all information searchable.
Blockchain is an emerging technology. A decade from now, we’ll probably laugh at some of today’s applications, but like all transformative endeavors, marketers who start early with blockchain will be able to turn today’s incremental experiments into long-term game-changers.