Blockchain : an advantage for the advertising industry
The Blockchain is a transparent and secured technology allowing the storage and the transmission of information or transactions that works without a central control body. It is a global decentralised database shared by several users. Each user can, at any time, by using a cryptographic system, check the validity of information, add data and record a transaction.
The legislation concerning personal data, advances in artificial intelligence, the popularity of adblockers and the growing dominance of Google and Facebook force online advertising players to rethink their model. Can Blockchain technologies, which allow the disintermediation of exchanges and the traceability of transactions, become the rescue buoy so much hoped for ?
What can the Blockchain bring to the advertising industry ?
“Online advertising ticks all the boxes in the sector that is typically transformable by the blockchain” explained Clément Jeanneau, the co-founder of Blockchain Partner.
The advertising sector will be able to benefit from the advantages of the blockchain
End of transactions opacity
“Real-time bidding” (real-time bidding through programmatic) has led to a multiplication of intermediaries between advertisers, who are at the beginning of the chain, and publishers, who offer advertising space and are located at the end of the chain. In the meantime, intermediaries are present such as ad exchanges (trading platforms), trading desks-specialized agencies that manage advertisers’ campaigns and Demand Side Platforms (DSP), which handle advertisers requests or Supply Side Platforms (SSP), to make advertising inventories available from publishers.
Otherwise, Data Management Platforms (DMP) are responsible for compiling all user data to build targeted audiences and adjust advertising accordingly.
According to the World Federation of Advertisers, “an average of 60% of the amount spent by an advertiser is collected by intermediaries, leaving only 40% to the publishers at the end of the chain“.
So, problems happen. Advertisers can not know exactly the use of their budget. Then, this system opens the door wide for fraudsters, who can take advantage of it to divert the campaigns.
But thanks to the blockchain, advertisers can regain control of their budget. Thus, they could do without intermediaries (specialized ad exchanges) to “trade” directly, in peer-to-peer, with publishers. Moreover, a Blockchain could trace the entire course of a digital advertising with much more transparency and reliability.
Finally, users retrieve the control of their data. They can choose the data they share and could be are rewarded accordingly.
51% of traffic comes from the activity of robots thus constituting a problem for all advertisers who lose half of their budget. How to react to this phenomenon ?
Operating in a decentralized manner through the Blockchain to authenticate the traffic makes it possible to authenticate the traffic. As a result, the actual reach of campaigns is visible and prices are fairer.
The use of smart contracts
The Blockchain brought out the creation of smart contracts. However, it remains essential that the different actors in the supply chain can agree on the terms of the contracts governing their activities. This is where smart contracts come in. These smart contracts are defined from the beginning by the actors of a blockchain, they are in fact small autonomous programs that automatically frame transactions rules.
A smart contract is only a connection between parts in the form of a computer code. All the people involved remain anonymous. It only executes if its encoded terms are filled. In programming language, we would call this the triggering of an event. A blockchain of smart contracts is accessible only by users it recognizes. Everyone can observe the events that take place there.
Smart contracts offer new advantages : adaptability, new possibilities and new types of pricing.
Respect of the GDPR and ePrivacy
GDPR and ePrivacy are regulations of the European Union constituting the texts of reference in the field of the protection of the personal data. They strengthen and unify data protection for individuals within the European Union. Blockchain technology guarantees and exceeds even simple compliance. It acts in a decentralized way to place the user in a position of control of his data. It does not use the data of the Internet users but only the contextual information. Thus, the advertising industry becomes a player committed to the protection of personal data and a sector in which users will have confidence.
The blockchain is going to be a revolution in terms of digital advertising. This technology would make it possible to track advertising campaigns in real time, and thus determine if it was seen or clicked, by whom and if the goal was reached.