One of the biggest drawbacks related to digital advertising is the lack of transparency within the industry. Blockchain technology, however, may be the solution for that problem as it is able to give a detailed ledger of all the transactions that have taken place within a specific campaign in real-time.
What is more, blockchain technology eliminates the need for the middleman and therefore streamlines the digital marketing process making it more time and cost efficient.
What Is Blockchain
To better understand how blockchain technology will benefit the digital marketing industry as a whole it is relevant to understand the basics of a blockchain.
The definition and process can be summarized like this:
1 – A “block” is a record of digital transactions made in real-time. These can include digital currencies or any other form of digital assets.
2 – After one “block” or digital transaction has been completed, it is then added to a chain of “blocks” and referred to as a blockchain.
3 – The blockchain itself cannot be corrupted in any way, shape, or form, and therefore is ideal for any digital transactions taking place. These do not just include financial transactions but any digital transaction that has some measure of value.
Below you can find a diagram of a typical “block” transaction and recording.
How Blockchain Technology Can Improve Digital Advertising
As was mentioned earlier, digital advertising platforms have a severe lack of transparency between the advertisers and publisher and that leaves the middlemen (intermediaries/ad platforms) to profit from the majority (estimated around 40%-70%) of ad expenses. Blockchain technology can cut the middleman out so that advertisers can communicate securely with publishers and so increase profits for both parties.
The second place where blockchain technology can streamline the digital advertising process is in the realm of digital identity. As blockchains have proven to be the most secure form of data storage within the digital world, purchasers can feel secure when a website is blockchain-backed giving more credibility to the vendor.
Last, but certainly not least, blockchain technology can decrease the risk of digital ad fraud. It is a sad fact that most digital advertisers do not have the tools to see if the ads they have placed are actually converting or not. Even if they do have such tools, without blockchain ledgers they cannot be certain whether those tools are performing their job correctly.
Similarly, advertising platforms may be using bots to drive clicks and “fake” traffic to an advertiser’s site, which is not good for ROI. Blockchain technology can resolve both issues by recording each ad on a blockchain and thus advertisers will be better able to verify if the metrics they paid for are adding up.
How 3 Top Digital Ad Companies Are Currently Using Blockchain Technology
Currently, there are at least three major digital advertising agencies that are incorporating blockchain technology into their digital advertising process. They are TMG, Unilever, and Madhive.
The ways in which each agency is using blockchain technology is summarized below.
TMG: The company’s media advertising agency, Truth, is built on blockchain technology and guarantees that each transaction they make is100% transparent.
Unilever: The company is currently in the process of coming up with a blockchain solution to fix ad discrepancies and anomalies before an advertiser’s ads are actually placed.
Madhive: The company uses an ad platform backed by blockchain technology to bridge the gap between buyers and sellers and so cut down on advertising costs.
Dil Bole Oberoi
