Current statistics show that Global digital advertising spending will total $ 335 billion in 2020. The digital media landscape is impressive, but fraught with problems due to a lack of transparency in the supply chain. As a result, digital ad fraud is increasing every year. Even with automated advertising technology that enables digital advertising to operate efficiently on publisher websites, challenges remain.
In return, advertisers lose billions of dollars every year. It is estimated that advertisers lost $ 42 billion in ad spend worldwide in 2019. This year, lost revenue due to supply chain inefficiencies and losses from the COVID-19 pandemic is expected to exceed $ 45 billion. Digital advertisers could lose $ 100 billion in revenue per year by 2023.
Chad Andrews, the global leader in blockchain and advertising solutions at IBM, told Cointelegraph Blockchain technology can help address a number of challenges in the advertising supply chain, particularly by providing transparency about where and whether or not ads are being served.::
“Advertisers and their agencies have to run digital ads in many thousands of media objects, resulting in millions or even billions of impressions delivered. To do this on a large scale requires a huge and complex technological ecosystem of intermediaries. Blockchain’s unique ability to act as a neutral, decentralized ledger for everything: fees and summary data on ad fulfillment; In addition to providing an identity verification platform, this is an effective solution to the wasted ad spend problem“.
According to Andrews The number of intermediaries involved in the advertising supply chain, including the supply and demand side, data management platforms, and real-time online bidding, adds complexity. In addition, there are other intermediaries who use their own data to identify, buy, tag, and resell the advertising inventory.
Andrews noticed this This complexity and lack of transparency make advertising considerably more expensive. “To get an ad for linear television, advertisers pay around 2% to 3% of every advertising dollar for implementation costs. To get a digital ad on a website, advertisers can pay 25% or more, “he said.
Andrews noticed this Blockchain technology sheds light on the promotions, fees and added value of each provider while verifying their identity and other data. This in turn can help ensure that contracts are met.
For example, Andrews mentioned that an advertising contract can have custom terms to target specific audiences, only to appear next to brand safe content, and to be visible for a minimum period of time. By collecting information from each provider at the time the ad is posted, it is possible to compile this information across multiple agencies, regions and platforms. “For the first time, blockchain is making it possible for advertisers to only pay for what can be verified as high-quality, authentic prints on delivery,” said Andrews.
Blockchain technology in the real world
Considering Blockchain technology has slowly but surely been applied to address inefficiencies in the digital advertising industry. For example, AdsDax, a self-service advertising platform, uses a blockchain to enable collaboration with the various parties involved in the advertising industry, including consumers.
Ryan Davies, chief product officer at AdsDax, told Cointelegraph that the company had specifically sought to reduce fraud in the advertising industry by using blockchain technology to eliminate intermediaries in the advertising process while delivering transparency through verified and branded events guarantee. Weather:
“AdsDax uses Hedera Hashgraph’s distributed ledger technology to record ad events such as ad inventory and performance data in a verified and immutable ledger. Advertisers can view these time-stamped events to review their campaign information in real time. “
Davies noted that while this seems like a relatively simple feature, it does provide a way for advertisers who previously couldn’t access real-time performance data: “Events that come straight from a user’s device and lead directly to a record are a huge confidence boost to business data.”. He added, “As of August 19, we have tracked more than 1.2 billion ad events on the Hedera Hashgraph mainnet, executed more than 239 million transactions, and an average of 1.3 million transactions per day.”
AdsDax is also trying to integrate functions that reward users with cryptocurrencies for sharing their data with advertisers.. In addition, new features are being introduced to ensure that consumers have more control over their data. These functions are also demonstrated by Brave Browser, which rewards users for displaying ads on the platform with its Basic Attention Token (BAT). Brave Browser was successful as new research by blockchain analytics firm Flipside Crypto showed that BAT was the most widely used ERC-20 token in the DeFi sector from June 19 to July 2.
New blockchain solutions are being developed
In addition to platforms like AdsDax, which are already recording transactions, new blockchain solutions are being developed to solve the ongoing challenges of digital advertising. For example, MadNetwork, a custom blockchain for ad tech companies, announced additions to its product roadmap on Aug. 20.
Adam Helfgott, the founder of MadNetwork, told Cointelegraph that MadNetwork was launched on the Ethereum blockchain in 2018 to create a range of products and partnerships designed to reshape the relationships between consumers and advertisers. Due to the constantly changing digital advertising landscapeHelfgott stated that new features were required to scale the network:
MadNetwork has released a new whitepaper outlining plans for a second level sidechain on Ethereum. Basically, the network uses Ethereum for security reasons. However, we found that many of the required building blocks were not available on Ethereum. For example, data availability is an important element of the advertising world and it is expensive to write data to Ethereum. “
Helfgott explained that The new solution that is being developed will serve as a verifiable data source for businesses and will provide key functionality such as data expiration and garbage collection.
In addition, MadNetwork does not require data to be immutable. According to Helfgott, this is the key for companies in the digital advertising space, as a lot of data is generated from ad impressions per month. “Impressions from TV commercials can reach roughly three hundred billion impressions per month. Following all of these impressions will take up a lot of space, ”he said.
According to Helfgott The MadNetwork token known as MAD is used to secure the space for data storage and enables the execution of intelligent contracts in the network. Miners are paid to put tokens to store data and collect trash when the mission expires.
Helfgott also found that a company’s digital identity is represented by a public or private key that protects various digital assets or data. “So if a sender wants to do transactions on this network, they have to run a node and generate keys for their digital assets,” he said.
Get involved to improve yourself
AdLedger is a non-profit consortium working to develop open technical standards for the application of blockchain and cryptography for media and advertising. He has worked to define the rules of good and bad behavior demonstrated by various digital identities as part of the next open standard for the group at the helm of MadNetwork.. This ensures that network participants do not show any fraudulent behavior.
Christiana Cacciapuoti, CEO of AdLedger, told Cointelegraph that because AdLedger encrypts the rules for a company’s digital identity, sets a standard for public and private key issuance, and is ultimately sent down the digital advertising supply chain.
Cacciapuoti also mentioned that an important partnership is in the works to demonstrate how MadNetwork can be used to fight advertising fraud, eliminate middlemen and create better supply chain visibility.
Cryptocurrencies can promote acceptance
While it is clear that blockchain technology can bring much-needed transparency to the digital advertising industry, real world use cases involving cryptocurrencies can ultimately fuel mainstream adoption.
Davies mentioned that the biggest hurdle for AdsDax was developing technology that was fast and profitable enough for businesses to take advantage of. However, the next step for mainstream adoption will be in cryptocurrencies. He explained that As people start using cryptocurrencies in their daily lives, the opportunity has arisen to replace fiat payment items: “Features under development for the consumer element of our platform that reward users with cryptocurrencies and give users the opportunity to use them. The currency for goods and services in the real world is a big step in the right direction. “
Based on Davies, Helfgott mentioned that the cryptocurrency industry is currently experiencing a second wave of innovation, which may be reason enough for institutions to accept cryptocurrencies. New functions for the digital shift in value are in turn becoming a growing concept in digital advertising space. “We believe that advertising space can ultimately be the building blocks for mass blockchain adoption.”said.