How Blockchain Changes Advertising

Pauline Volovik
5 min readJan 27, 2023

Internet advertising has already become a regular thing. It crops up in various formats on every platform daily and saves advertisers huge money. According to Statista, in 2027, the income from advertising will reach $1 trillion of billions.

However, every coin has two sides: there exist problems with monitoring additional revenues from a specific advertising source. It complicates the optimization of marketing expenses a lot. Besides, the review and click-based model contributes to the growth of fraud, leading to losses.

Blockchain can become the solution to these difficulties.

How to Apply Blockchain in Advertising

The main challenge of Internet advertising is the opacity of processes. Not all data can be collected and interpreted correctly. It affects the assessment of marketing effectiveness, forecasting, and scaling. Some blockchain features can make up for these problem issues of advertising.

Conventionally, blockchain characteristics can be generalized into five main principles:

  • Decentralized. The technology has no central control point, making blockchain impossible to be turned off or deleted.
  • Transparent. Every participant monitors all transactions. At the same time, identification data can be left anonymous.
  • Automated. The algorithm of blockchain consensus is used as an automated mechanism to prove that separate parts of the network respect the rules and that transactions are carried out properly.
  • Immutable. A transaction cannot be changed or withdrawn after authorization and approval.
  • Distributed. All participants have equal access to basic data, excluding fully private blockchain platforms controlled by a single person.

Every principle at the heart of the technology offers its benefits when implementing blockchain in advertising processes. We must understand how the technology can be applied and what result we want to get in the end.

Intermediation

Advertising partnership is a widespread format that requires significant investment, especially when talking about Affiliate Marketing. According to Statista, in 2022, expenses for affiliate marketing in the USA were $8.2 billion.

Blockchain helps to optimize spending. The technology allows users to avoid spending money on commission fees and work with shadow affiliate persons.

Blockchain gives a chance to directly contact an advertiser. The refusal to mediate with key players of the advertising chain can significantly cut down expenses (e.g., fees for payment processing, transaction fees, and expenses on data transfer to consumers).

For instance, the NYIAX platform uses blockchain for the purchase, sale, and trading of various contracts. When they are verified, a company connects publishers and ad buyers.

Fight against Fraud

According to Statista, in the USA, in 2022, money losses due to fraud amounted to $81 billion. In 2023, this number is expected to hit $100 billion. It happens due to the use of various bots and click-farms that act as real users, together with fake websites, hidden advertising, etc.

All categories of ad fraud are united by a single trait — the lack of data transparency. It is also a task for blockchain: the technology can distinguish genuine clicks that lead to sales from “dummies”.

For example, the Verasity company offers the VeraViews stack to fight fraud. It is developed based on the Proof-of-View technology to monitor real interaction with the advertising. The data received is saved in the public ledger. It guarantees transparent and legal interaction advertisers pay for.

Smart contracts also minimize the risks of ad fraud and provide participants with the required guarantee. It is especially relevant for those using affiliate marketing. The smart-contract interaction helps all parties be sure in the implementation of agreements.

Customer data collection

Every year, the question of confidentiality becomes more relevant. According to Pew Research Center, 79% of respondents worry that the company collects their personal data. Users do not want to share the information, thus complicating the work on personalized ad messages and content.

Blockchain can obtain the data you need from users. However, it can be the step to their content to share the information.

For example, BitClave uses blockchain to reward users for sharing their personal data with marketing teams. With the help of a transparent BitClave Active Search Ecosystem (BASE) ledger, the company allows users to control their personal data and decide who can access it.

In exchange for the right to access the information, marketing and sales departments provide customers with unique targeted ad offers, that meet their preferences. This system fulfills both business’ and users’ needs.

Tendencies in Ad Industry that Can Become Problematic

Blockchain can eliminate numerous ad problems. However, you should also pay attention to tendencies that can become a challenge.

  • Data privacy. In May 2021, Vidhya Srinivasan, VP/GM of Google Analytics, stated that user data confidentiality is a high priority and the company wants to limit cookies.
  • User control. New market members, e.g., confidential browser Brave, offer new opportunities for users to control the frequency, content, and length of ads.
  • Ad for reward. This format already exists (Google Rewarded Ads) and is usually used within games and apps. Users get rewards within the program for watching. It is expected to scale in the future.

Every point can somehow complicate work for both publishers and advertisers. The obstacles in user data monitoring and collection will issue. The specialists will struggle with reaching users with their ad messages.

Nevertheless, these all are only assumptions for now. They must be kept in mind by following fluctuations in the ad field.

Conclusion

With the growth of the ad field, new problems emerge. And they need to be dealt with. Blockchain may not solve all the difficulties you can face. But it can offer a simple solution for a range of pressing issues due to the transparency. It allows for reducing data expenses and aggregations in real time with the help of a decentralized ledger.

If you have not considered this technology in the context of work with ads, it’s high time you delved into this topic. What if blockchain becomes the “magic pill” for advertisers?

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