The advertising industry faces a significant challenge of ad fraud, resulting in substantial financial losses. It is estimated that ad fraud costs between $7 billion and $17 billion annually worldwide, with a continuous upward trend. The problem is further compounded by the growing number of intermediaries involved in the ecosystem. This issue particularly impacts publishers who receive a mere 34 cents out of every euro spent by advertisers, while the majority of funds go to intermediaries.
Fortunately, blockchain technology, with its ability to decentralize and provide transparent ledgers, offers a potential solution. In this context, MetaX and their adChain tool stand out in the realm of blockchain advertising. By utilizing blockchain technology, advertisers can track transactions in real-time and gain a higher level of transparency within the supply chain. This not only helps combat ad fraud but also empowers advertisers, publishers, and marketers with immutable and decentralized records.
MetaX’s adChain tool leverages the power of blockchain and cryptocurrency, particularly Ethereum, to create a secure and trustworthy ecosystem. Through the use of tokens, MetaX ensures that third-party intermediaries are held accountable and provide the promised services. Additionally, blockchain technology safeguards personal information, offering an added layer of security.
As we move into 2023 and beyond, the adoption of blockchain and its associated ledger technology in the advertising industry has the potential to revolutionize the way transactions are conducted. By embracing cryptocurrencies and the transparency they provide, advertisers, publishers, and marketers can mitigate ad fraud, streamline processes, and enhance trust within the digital advertising landscape.
Understanding the Potential of Blockchain in Digital Marketing and Advertising
Blockchain, a concept that has gained significant attention in recent years, is essentially a digital database that securely records the complete transaction history among participants since its inception. Operating like a chain, when two users engage in a transaction, the network verifies, validates, and assigns a timestamp to it. The transaction is then added to a block, and these blocks are linked sequentially to form an immutable chain. Once a block becomes part of the chain, it becomes unalterable and impervious to deletion. In essence, blockchain can be likened to an automatic ledger that preserves the integrity of data without the possibility of erasure or modification.
The key advantages of blockchain lie in its incorruptible nature and decentralized structure, which eliminates the need for central data storage and provides robust security. By embracing blockchain technology in the realm of digital advertising and marketing, various benefits can be realized. Transactions can occur in real-time, enhancing efficiency within the supply chain. Moreover, blockchain’s transparency enables increased accountability and reduces the occurrence of ad fraud, benefiting both advertisers and publishers.
Blockchain leverages the power of cryptocurrencies, such as Ethereum, and utilizes tokens to facilitate secure transactions and enforce trust in the ecosystem. This integration of crypto and ledger technology enhances the protection of personal information, providing users with greater peace of mind.
Leveraging Blockchain for Enhanced Verification in Digital Advertising
The application of blockchain technology in digital advertising offers remarkable advancements, starting with the ability to verify impressions, which is facilitated by MetaX in collaboration with their partner adChain. Through the integration of a tracker into the XML file of the banner, all participants in the blockchain can effortlessly monitor its journey. The process unfolds as follows: the buyer acquires the impression, encrypts the transaction, includes it in a block, and shares it with all chain participants. The presence of the tracker allows for real-time verification of whether visibility standards have been met and provides valuable insights into the audience that views the impression.
This approach yields two significant advantages. Firstly, it provides unrestricted access to comprehensive data associated with each impression. Secondly, it establishes a “verifiable transaction path.” The latter is particularly noteworthy as it enables the immediate identification and blacklisting of fraudulent activities. Beyond fraud prevention, this holistic view of all impression-related data facilitates the identification of bottlenecks within the supply chain and empowers stakeholders to implement necessary corrective measures.
By utilizing blockchain technology, digital advertising not only achieves transparency and real-time monitoring but also enhances the security and integrity of transactions. This transformative solution brings us closer to a future where the advertising industry operates on a decentralized ledger, fostering trust, and empowering advertisers, marketers, and publishers alike.
Elevating Ad Exchanges with Smart Contracts and Blockchain Technology
Another application of blockchain technology is the use of “smart contracts.” The Nasdaq plans to launch the New York Interactive Advertising Exchange, a platform that utilizes blockchain’s native features, including smart contracts. These contracts automate the execution of agreements once specified conditions, such as price, are met. For example, a simple rule could be set to execute the contract only if the buyer’s price matches that of the seller.
The NYIAX platform offers the sale of premium inventory at a lower price than live sales but higher than traditional ad exchanges. This prevents premium publishers from selling their unsold inventory at discounted rates on ad exchanges. Furthermore, NYIAX reduces intermediary fees that publishers encounter on real-time bidding (RTB) platforms, potentially saving up to 50% of their income. Currently, NYIAX is conducting a pilot program with select customers before the official launch.
Contrary to the perception that private marketplaces solve fraud issues, significant discrepancies arise when deals go through supply-side platforms (SSPs) or demand-side platforms (DSPs) (2). By providing a single, reliable, and verifiable source of information, blockchain simplifies the execution and verification of these private deals.
Exploring the Boundaries of Blockchain in Advertising
Although blockchain advertising has the potential to address many challenges in internet advertising, its widespread adoption faces certain hurdles that may persist for some time. Blockchain operates most effectively when all participants in the chain are actively involved. However, the fragmented nature of the current display landscape means that it may take time for advertisers, publishers, DSPs, SSPs, and ad exchanges to fully embrace blockchain technology.
Furthermore, the performance of blockchain improves with a larger network of participants, enabling faster transaction verification. Currently, displaying an impression takes just a few milliseconds, while verifying the transaction can take up to 15 seconds. This makes instant fraud verification impractical at present, but it can still be used as a post-campaign verification tool.
While progress is being made in combating advertising fraud, certain unfavorable practices in the digital landscape are difficult to change. The increasing use of ad blockers, for example, reflects user dissatisfaction with intrusive advertising formats. In response to this, the Brave browser, based on blockchain technology, has emerged to directly reward publishers and users who consent to viewing advertisements. The reception to this concept has been mixed, but the proliferation of similar initiatives suggests a positive shift in the world of digital advertising.
Blockchain marketing and its impact on the advertising and marketing industry are still evolving. As blockchain technology continues to develop, its potential use cases, such as improving security and transparency, reducing ad fraud, and revolutionizing data management in digital marketing, are being explored. Companies across various sectors are leveraging blockchain to keep track of ad spend, enhance data security, and improve the customer digital experience. By implementing blockchain-based solutions, such as smart contracts and decentralized platforms, digital marketers can benefit from better data management, increased trust, and more efficient ad campaigns.
Blockchain’s ability to provide a public ledger of transactions and secure data storage has implications beyond advertising, impacting industries such as supply chain management and data security. With its potential to reduce fraud, increase transparency, and empower users to control their personal information, blockchain technology offers new possibilities for the future of digital marketing.
