How Blockchain Can Fix Advertising

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The biggest asset an organization can work with is trust. Trust in a brand and its messaging, aka marketing, is what makes marketing successful and credible.

At the same time, people say that there are three types of lies: Lies, damned lies, and marketing.

Trust in organizations is still low. This is evidenced by the 2018 Edelman Trust Barometer, although it shows a slight return of credibility of expert voices.

Further, Google data shows that about 99.8 per cent of all online ads are simply ignored by customers. Ads are perceived a nuisance and the number of people using ad blocker software is increasing fast, nearly as fast as the investment into online advertisement, which grew by 21 per cent in 2017, as estimated by the IAB. The majority of this is estimated to be captured by Facebook and Google. And Amazon is sitting of a sizeable chunk of useful data, too. Their gatekeeper function makes these companies so important, yet dangerous for brands.

Google and Facebook are leading the pack largely because of their collecting personal data at a grand scale.



No news here.

However, the consequence of this is a reliance of advertisers on this data, a reliance that often enough does not lead to good enough results. Too many ads are thrown too often at us on different devices, at different times, by different web sites. Sometimes one feels regularly hunted by an ad.

And the stories about being exposed to ads for a product after the purchase on Amazon are legion. Who hasn’t heard one of them yet?

This, in turn, is a key contributor to peoples’ distrust in online ads that is shown in Google data and the growing number of ad blockers that are in use.

Of course, this could be mitigated to quite an extent by us providing advertisers with good quality data about us, so that they and the agencies and other intermediaries do not need to so much.

But why would we do this?

Advertisers suffer, too! A 2017 Forrester study determines that as much as 56 per cent of all ad dollars are wasted due to fraud or unviewable inventory. Essentially, advertisers do not have the transparency that they need to be able to assess the performance of their ads and to improve their ad campaigns. There is no real way to determine whether these ads have been delivered to the intended audience. And no insight means there is no way to decide on a better way, not in retrospective, and surely not in realtime.

And then there is still the lurking question: Are my ads delivered to humans at all?

Superman to Help

In comes blockchain.

As I have written in my last column article, “blockchain is a technology that stores data records (blocks) in a cryptographically secured and distributed way. Each block is linked to its predecessor by a hash code and stored in a multitude of places. Changes to the data are appended to the blockchain, as data cannot be changed anymore once added to the chain. The combination of the distributed nature with the hash code makes it extremely hard to tamper with the data”.

In brief, blockchain, by its very nature, is a technology that can build confidence in data or statements.

Something that is also called trust.

This is one of the main reasons why we start to see blockchain applications in marketing, with a focus on ad technology.

There is another reason why this focus on ad technology is no accident: It is exactly the place where not only trust can be built, but also insight. While trust is a currency that appreciates only long term, insight is something that can be utilized immediately.

In fact the well known martech landscape by chiefmartec now has an offspring dedicated to blockchain martech. People like never stop marketing’s Jeremy Epstein are advocating a bright future for blockchain technology in marketing. Other influential persons like David Raab take a more pessimistic stance.

For sure, there are a few challenges, e.g. the performance of the ledger. However, a few points are clear:



  • Blockchain can help advertisers by providing a ledger of ad delivery, confirming that a real person has seen the ad that also matches the intended profile.
  • Blockchain can help companies in gaining their customers trust by providing them a look at how their data has been used, and by whom. This, again is due to the nature of the distributed ledger.
  • It is early stage for blockchain applications. In Gartner Group’s 2017 Hype Cycle for Emerging Technologies, blockchain is just past the peak of inflated expectations and has an estimated 5 to ten years to reach the plateau of productivity
  • If successful, blockchain applications create new business models. In particular in marketing a shift from B2C models to C2B models that genuinely put the customer at the heart of all efforts.

How to go ahead?

Staying true to the own message is a precondition for success.

For marketers it is time to gain transparency on their ad spend, to improve targeting and to decrease ad cost.

This all the while building more trust with the target audience.

Technologically the only way to accomplish at least one of these objectives currently is using blockchain-based services.

There are essentially two different ways to go ahead:

  1. Partner with a blockchain company that works on search. This then also takes the customer into the equation
  2. Partner with a blockchain based advertising platform. This has the potential of decreasing advertisement spend through better transparency into the actual targeting and delivery. Do this, if you want to focus on the relationship between advertiser and publisher. It does not work directly with end customers.

There are only a few players in either field; not many, but we will see their numbers increase.

While the first option is more appealing because of involving the customer and giving them the opportunity to protect their data I think that the second way will prove more successful in the short term. Companies that pursue strategies like Presearch or Brave follow an admirable goal but are probably closer to moon shots than to viable businesses – but then they are offering a great way of harmonizing the goals of all three involved parties: advertisers, publishers and customers. Advertisers get transparency into who interacted with an ad and one less intermediary. Publishers can offer improved services due to better data quality. Customers get transparency into and some control about how their data is used, and by whom.

All in all this is a very strong value proposition; it’s chances, however, largely depend on the strength of regulations like GDPR.

Still, smart CMOs should start to analyze how platforms like these can contribute to ad success and run trials to gain experience and to measure the benefits.

On the short term blockchain based ad platforms that link publishers to advertisers seem to be more beneficial and deserve some attention. Key criteria for analyzing them are their ability to integrate into the already existing inhouse marketing platform, their reach, and the performance and scalability of their blockchain. In case you do not have a strong, AI backed analytics platform in house, also have a look at their insight generation abilities.

Again, insight is what enables (re)actions. Data is only the raw material for this.

The blockchain performance and scalability become relevant when it comes to getting real time insights into an ad campaign. This gives an edge to platforms like NYIAX and Papyrus, or MadHive, when it comes to video advertising.

But do not bet the house on blockchain ad tech – yet!

Both, blockchain, and especially the applications based upon this interesting technology are young and in a serious hype.



So, it pays off to do a good analysis about the strength and viability of these young, yet interesting companies.

Choose one or two of them in each category and analyze their performance relative to the old ad delivery platform.

Take it from there.

There surely is some change coming towards advertisement. Blockchain may well be an important part of it.

8 COMMENTS

  1. Hi Thomas, don’t you think in many (if not most) cases blockchain in itself is overkill and far from required? Although blockchain is extremely important and has already entered in our day to day lives. Also, I think blockchain in itself is not enough – it needs to be bundled with AI.

  2. Hi Charlotte, sorry for the late reply. You are quite right. In many of the current use cases the application of blockchain is somewhat overkill if you want to only achieve the same and do not want to add additional value. This additional value piece is what is searched for in this early stage of the technology. In the area of advertising we can find some applications. When it comes to smart contracts (which are behind many of the advertising examples) we have another one, which is improved automation efficiency coupled with an audit trail.

    To get real value I, too, think that it needs a coupling of AI and blockchain. I have written about this in an earlier column article. http://customerthink.com/blockchain-and-ai-power-unleashed/

    Thanks for your thoughts and questions
    Thomas
    @twieberneit

  3. Hey Thomas, in my opinion, blockchain is the future of all kind of technology to secure them and to connect everyone with immense advertising methods. Blockchain is the base of the latest technologies and if we combine it With AI there will be huge opportunities for Advance Digital Future.

  4. Hi Deepak, thanks for reading and your comment. I agree that there are immense possibilities albeit I am not as bullish as you. Some of the possibilities need business model changes, some others will hurt strong incumbents. The matter of performance while retaining the ‘zero trust’ model needs to get sorted out, too.

  5. Thomas, wouldn’t it be interesting if blockchain could be applied in a way that the satisfaction of customer needs could be validated. That would be trust, and there is generally a large disconnect between marketing messages and true customer needs.

  6. Hi Mike, yes, it would be. That’s why I originally wrote the article. There is an immense disconnect, not only between messages and needs, but also between the various stakeholders in/of marketing. Customer needs are way beyond marketing, which serves more the company (you’ve got this need – I’ve got the solution) than the customer, who gets the value using the solution. To become really relevant companies are currently using services that entice data out of customers, who in turn do not necessarily get the best solution in turn, not even the best (not lowest) price.

    So, again yes, technically blockchain can be used like you suggest, but same as for core marketing/advertising this would necessitate a change in business models that incumbents are unlikely to perform (it is expensive for them, defers revenue, increases (perceived) risk), so that I am quite bearish here. Companies who are strong in the market would not see a reason, companies in highly competed markets will hardly see a way. This is also the gist of Kamy’s slightly polemic comment, I guess.

    Out of curiosity: How would you ignite a change into this desirable direction? Maybe we can find a way?

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