Blockchain. If you haven’t heard about it yet, you will. It’s the ingenious technology underlying the success of bitcoin and other cryptocurrencies. Not only that, but it’s now poised to be a game changer for industries across the spectrum.
Internet advertising stands to gain massively from blockchain protocols in a future that benefits publishers, users, and advertisers of every stripe. It’s time to get on board with this rising technology before other marketers leave you behind.
What Is Blockchain?
Although the term blockchain is most associated with bitcoin, it’s a standalone technology that can be applied to any need for secure information transactions.
A blockchain is an open, distributed ledger that can efficiently record transactions between parties through the internet in a verifiable and permanent way. This simple description provides two important features for advertisers.
First, because blockchain technology is distributed, it doesn’t require a single “warehouse” or data verification authority — meaning there’s no centralized source of control. The benefit is that no one party can control the information stored in the blockchain nor add middleman costs to the relationship between publishers and advertisers. This increases confidence for both, particularly given that the middlemen are significant costs: Google alone generates more than $5 billion a year through the Google Display Network.
Second, every bit of information is verifiable and unable to be altered without the public cooperation of verified blockchain participants, so data retrieved from the blockchain is trusted. Trust is critical in today’s climate of fraudulent advertising and bot-driven ad clicks.
A New Way to Advertise
But where does blockchain enter the story? It’s the backbone of the project, as basic attention tokens need a reliable way to be tracked. Brave provides just that: a decentralized and transparent digital ad exchange based on the blockchain used with the ethereum cryptocurrency.
This represents a new paradigm motivated by the current massive inefficiencies in a system overrun by middlemen, trackers, and fraud, all of which waste bandwidth that users are paying for. That bandwidth is significant: The introductory video for Brave cites a New York Times report stating that about half of data from the top 50 news sites is ads.
There was clearly public support for this idea: The Brave project raised $35 million from its initial coin offering in less than 30 seconds.
Getting on Board the Blockchain Train
Interested in implementing blockchain for your own advertising initiatives? Here are a few interesting and unexpected ways to leverage this system:
- Generating data audits. Los Angeles startup MetaX is betting on blockchain for advertising, launching adChain, a blockchain-based protocol now offered in private beta with a small number of companies. The technology can reveal each ad impression, who sees it, and where those web users ultimately go. It provides an audit trail that more precisely measures campaigns — and then quickly generates the data.
- Limiting fraudulent traffic. Blockchain isn’t new arcane technology just for startups. Even giants are taking interest, particularly for programmatic advertising. In June, Babs Rangaiah of IBM iX discussed blockchain at the Cannes Lions International Festival of Creativity, stating, “With blockchain for media, you’ll be able to have total transparency … I’m looking to help the programmatic space by building a blockchain for that.” Such an approach can’t come too soon: The advertising revenue misspent on fake traffic or bot-driven clicks worldwide may hit $16.4 billion this year.
- Adding uniqueness to every transaction. In a world of mass production, item provenance creates value for the end consumer, whether for reasons of consumer safety, ethics, or even just the sense of connection to the product’s origin.As an example of safety, take Walmart’s announcement last year that it would partner with IBM to use blockchain to reliably track the provenance of its China-supplied pork, which may greatly reduce the incidence of any foodborne illnesses because problematic batches of pork can be quickly and reliably traced to their origins using blockchain.For ethics, one can imagine scenarios in which any garment could be traced back to its factory of origin anywhere in the world, allowing companies with stated ethical commitments to verify best practices. For connection, fashion label Babyghost is now offering customers of its handbags unique identifiers to know about the origins of their items.
- Protecting consumer privacy. Blockchain allows verification without the need to disclose customers’ identities to others. The result is more akin to an extremely verifiable census that delivers the demographic value advertisers need while keeping personal details anonymous — a compelling win-win.
The era of blockchain is coming, and advertisers who embrace it early will benefit from its disruptions to today’s world of massive fraud, expensive middlemen, unreliable tracking and placement, and privacy concerns.