How blockchain can deliver digital advertising triumph

The following is a guest article by Joshua Swartz, Oscar Capel, Hemal Nagarsheth and Dnyanesh Katakdaunde of the consultancy firm Kearney. Opinions are those of the authors.

While digital advertising has offered a number of benefits such as precise targeting, low costs, and ease of fine-tuning a campaign, there are three key areas where advertisers suffer unnecessary and oversized losses. First by fraud. An estimated annual loss of $ 18 billion due to fraud. Second, the notorious difficulty of going up the customer journey to attribute a purchase to a specific ad. Finally, the army of intermediaries required by the current digital advertising business model.

Today there is technology capable of simultaneously solving all three problems. Blockchain, with its ability to record information and prevent it from being manipulated, is the proposed solution to eliminate losses occurring on all three fronts. A triple victory.

While the idea of ​​using blockchain isn’t new, its adoption has been slow. What bothers? Inertia. Entrenched interests, the status quo, buy-in from all stakeholders, strongholds that are protected or a reluctance to change because “that’s how we’ve always done things.” A litany of reasons add to a general impasse. But transformation does not happen on its own, and if the past decade has shown us anything, it is that there is much to be gained from disruption.

Why blockchain? Why now?

Here’s why blockchain was offered as a solution. All of the above challenges have a common theme: the lack of visibility or confidence in the information circulating between the different participants along the value chain. Being an electronic system for recording information such as transactions, contracts, distributed transactions and other data exchanged between multiple participants, the blockchain becomes a unique source of truth, because it is impossible to manipulate. Decentralized, transparent, immutable and automated, it is a formidable tool that can and must transform the digital advertising industry.

Consider that all participants have equal access to the underlying data, while blockchain eliminates middlemen and prevents any individual party from owning or controlling any of it. Rather than operating from a “main” data store, the blockchain is made up of many nodes in a network – all of which have direct (peer-to-peer) access to each other. Each transaction is visible to all participants. The fact that once a transaction is recorded and confirmed, it cannot be changed ensures trust. And manual labor is drastically reduced or eliminated by rule-based algorithms that can be created and triggered by transactional characteristics.

Blockchain allows participants to exchange assets without an intermediary – across borders and in a secure and private environment. There is no centralized order book, because the exchanges are coded directly in the blockchain. Since they reside on the global network, the assets do not need to be local. Together, these attributes make the blockchain an almost impregnable model for meeting and managing the challenges, especially ad fraud, that digital multinational advertisers currently face. Indeed, it is already used by certain avant-garde companies.

For example, Toyota partnered with ad analytics firm Lucidity to roll out a blockchain-based advertising solution that optimized ad spend and resulted in a 21% increase in performance. With this new visibility and ability to track consumer activities leading to sales, the automaker found it could reduce or eliminate the need for middlemen such as ad exchanges and search engines.

To answer the “Why now?” Question, the pandemic has made advertisers and consumers more dependent than ever on digital commerce. Blockchain offers more assurance that as we dig deeper into the world of virtual commerce, we are preserving our hard-earned income as much as possible. And while we always strive for operational excellence, whether in a pandemic or in a ‘normal’ time, perhaps the most important point is that COVID-19 has given us the opportunity to re-evaluate how we are. do almost everything. So, in the midst of the ongoing ‘COVID pause’, there has never been a better time to rethink how digital advertising should be handled.

Disintermediation of players

With built-in transparency, it’s easier than ever to imagine a direct relationship between the brand and the digital publisher. This is potentially huge news for advertisers. The disintermediation of intermediaries who have played a vital role in the advertising value chain could lead to a substantial reduction in the costs of processing fees, transaction fees, payment facilitation, consumer data costs and others. Together, they could represent a 30-35% reduction in total ad spend.

Another added benefit for advertisers, blockchain would also allow an evidence-based funding mechanism, so that payments are not triggered until results are achieved – via smart contracts, for example, which provide rules automation. trading over blockchain data. Another gift that requires proof of the proper functioning of an advertising campaign.

Attribute the effectiveness of the ads and demonstrate the return on investment

Blockchain’s ability to reliably track information enables advertising agencies and advertisers to make better decisions, such as how to target the right audiences more effectively by providing visibility across the entire supply chain. . Click-to-buy campaign transactional visibility gives advertisers the data they need to run complex optimization algorithms and intelligently target their campaigns. Once integrated with a marketing platform, campaigns can be automated to effectively maximize sales and return on investment. With this new model, advertisers can better choose the right mix of publishers and channels to deliver the most attractive ROI based on the consumer or target segment.

Another way to improve advertising effectiveness is to control how often a particular ad is shown to the same consumer. Blockchain creates an opportunity to record and track every ad served to every unique consumer, allowing greater control over which ads served to which consumers, how often, and when. This approach and optimized ad targeting could be used across all channels for email campaigns, coupons and vouchers – and, more importantly, give advertisers consumer-level visibility from click to click. purchase.

Shine light in the shadow of fraud

All ad scammers have one thing in common: they thrive on opacity of data. As cybercrime levels continue to rise throughout the pandemic, the transparency and visibility of blockchain shines a light and reveals real clicks that lead to sales, differentiating them from fraudulent clicks. With blockchain, unique identifiers assigned to advertisers and publishers prevent “domain spoofing” – those unverified ad networks or scam websites that pollute marketing traffic data.

Advertisers can seamlessly track ad displays, how long an ad has run, who is involved, and every step of the digital supply chain. Blockchain-based platforms can help blacklist sites and apps deemed to have high levels of divergence and bot infiltration, so advertisers can redirect ad spend to higher performing sites and eliminate unnecessary expenses.

Blockchain will transform digital advertising

Blockchain brings visibility and trust, enabling advertisers to make better decisions about ad spend while providing consumers with a better and more personalized experience. It has the potential to dramatically reduce transaction costs and prove ROI while removing massive industry burdens of fraud and traditional middlemen. The world of advertising has become an increasingly digital place, and even more so thanks to the massive shift to e-commerce induced by COVID, so now is the time for blockchain.

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