INSIGHT

Blockchain and advertising: how can this technology impact digital marketing

Why do we need blockchain technology?
The digital advertising landscape is always evolving. Consumers expect marketers to do more to protect their data and privacy as they try to find new ways to reach their target audience and enhance conversions. The whole scandal of third-party cookies is a perfect example of how privacy concerns are nowadays a main subject in the industry. We wrote a blog post about third-party cookies and about the solutions big corporations adopted, particularly Google Topics. What we haven’t mentioned, which is instead the subject of this article, is the challenges advertising has been facing in the past few years and what can be a solution for them.
The challenges digital marketing is overcoming in 2022
Marketers work in an industry that is becoming more competitive by the day. To create outstanding products, it is necessary to adapt and develop in response to the needs of users. Previously, this meant more personalized targeting based on customer preferences.

What main challenges have marketers encountered in the past few years?
CHALLENGE #1
To implement a specific targeting model, several stakeholders were introduced in the landscape (e.g., publishers, search engines, social media platforms). Ads are used to bridge agencies and these stakeholders, requiring advertisers to spend more money to navigate such a complex landscape.
CHALLENGE #2
Which advertising drives sales? Marketers often struggle understanding which pathways lead customers to a certain purchase: maybe a Facebook ad or maybe just through Google search.
CHALLENGE #3

Views and clicks are the primary digital advertising metrics. Each ad click or view results in value capture, which is charged to the advertiser. However, multiple frauds and scams arose together with these metrics, such as showing users a brand and sending them to a different one. Such a blurried approach represents a significant and growing issue for advertisers.

More information about these challenges can be found in this article written by Kearney.

Each of these problems has the same root: a lack of information or trust in the information that moves through the value chain.

How can we solve it?

In one word: Blockchain. Blockchain may be the answer to digital advertising fraud and other trust challenges. It might provide customers with more targeted marketing and more privacy rights.

To better understand how blockchain is a solution, let’s give a brief overview about this technology. 

Blockchain is a type of technology called Distributed Ledger Technology (DLT). It stores the records of many transactions between people who are not in the same place at the same time. It doesn’t need any central control because the data isn’t stored on a local server. Instead, it’s stored on a secure server that is spread across the world. The key element which entails the solution we are seeking is the accountability of the technology.

Because of the way the blockchain works, data blocks can’t be changed. People who have permission to see these verified, tamper-proof records can do so through their own, personalized dashboards. Almost all of the data flows and transactions are done automatically, and they are fast, mostly transparent where needed, hidden by cryptography where not, and very trustworthy for everyone involved, even the customers.

Practical contribution of Blockchain to Digital Advertising

The application of blockchain technology to the advertising industry is distributed on multiple layers;

  • Spotting fraudulent bots and flagging sites;
  • Genuine and identifiable audience targeting;
  • Better data management thanks to KPIs retrievement;
  • Transparent and trackable ads, exclusion of intermediaries when buying and selling ads, reduction of third-party platforms to verify ads compliance to guidelines;
  • Data privacy and safety ensured by permission criteria;
  • Increased automation of processes, such as the ad auctioning process.

Globally, digital advertising requires accountability and transparency. Blockchain adds that trust component. Ad tech companies may now show a comprehensive view of ad distribution and transactions using blockchain. Data is the key to every advertiser’s success. Due to the distributed ledger concept, advertisers now can obtain high-quality data that is less likely to be altered.

Several companies are understanding these needs, especially when looking at the current marketing landscape, struggling with data protection and data tracking. For example, IBM developed IBM Blockchain, which according to them serves to “Discover how we bring complete transparency to digital transactions with immutable, distributed ledgers delivering newfound trust to media, entertainment and advertising – while reducing costs, eliminating intermediaries and unleashing new value across supply chains.”

Have you considered blockchain as an option yet? If you want to know more about the topic, Refreshworks would be happy to discuss it or write more about it!

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