The advertising world is fraught with problems of fraud, complicated supply chains and lack of control over data privacy. Not only are advertisers losing more money to fraud than ever before, they’re also losing control over ads because of an increasing number of middlemen in the supply chain.
The good news is that blockchain technology has the potential to solve these problems. Here are three important ways blockchain can provide more transparency and trust in the digital advertising industry.
1. Increased Fraud Prevention
Ad fraud is a huge problem in the advertising industry today. Exact numbers vary from source to source, but it’s been posited that as much as 36% of all digital ad traffic could be fraudulent. Mobile ad spend hit $40.1 billion last year. That means approximately $14 billion of all mobile ad spend is potentially fraudulent.
The solution lies in blockchain as a digital ledger of transactions. Every transaction of a digitized product is stored on blockchain as an immutable record, which means that nothing can be faked or changed after the fact. Each transaction is recorded only when all parties agree. The ledger is decentralized, or shared in real time by all participants. This means that no single party can unfairly influence the results.
Because of its transparency, this technology has the potential to allow advertisers to more easily monitor where ads are going and what happens to them. Blockchain even has the power to provide information like bid price, where impressions are coming from and how many times an ad is viewed.
2. A More Transparent Supply Chain
The supply chain for ads is dizzyingly complicated. What used to be a simple transaction between advertiser and publisher now involves supply-side platforms and aggregators handling ads along the way. Advertisers often don’t know exactly what happens after an ad leaves their hands.
Because of this, many advertisers now feel they don’t have control over their ads in how they’re presented, bid on or distributed. They may feel powerless because they’re unable to choose which steps, or even how many steps, an ad should go through before it’s put in front of consumers.
Blockchain’s decentralized ledger makes it possible to record every party who has touched the ad from advertiser to publisher. This allows advertisers to regain control of the supply chain by making it fully transparent.
3. Improved Data Privacy
By now, everyone in the advertising world has heard of Cambridge Analytica. Users are warier than ever of the way their data can be used against them, and governments are beginning to respond with their own policies for data protection such as the General Data Protection Regulation.
One problem is that people tend to enter the same sensitive information on multiple websites. Most people do not understand where their data is stored and how it might be used. Since the data is stored by multiple organizations, a security weakness in any one of them could lead to stolen data. It’s no wonder that people are opposed to providing advertisers with personal information.
Blockchain technology offers the possibility of a safe place to store sensitive information. For example, a highly encrypted, decentralized database of personal information eliminates the need to enter the same data multiple times. People can access their information with a private key and choose what they share and with whom.
Advertisers, on the other hand, can use blockchain to demonstrate to people how their personal information is used, making it clear that they’re using data in a safe and helpful way.
These measures could potentially increase users’ trust in advertisers. And with the ability to control exactly what they want to share, people may be more inclined to share basic information that allows advertisers to show them the ads they’re most interested in.