Blockchain: a revolution for online advertising?

Currently, transactions around advertising space are being replaced by programmatic advertising. The development of artificial intelligence also makes traditional advertising obsolete. This is why advertising is increasingly done online with efficient means. One of these is blockchain, which will revolutionize advertising on the web.

Blockchain, for greater efficiency

The blockchain is a tool that is considered very effective against piracy by professionals. It provides value to advertising audiences through targeted actions. It is a technology for transmitting information and storing data. It has the advantage of being transparent and secure in the absence of a controlling body. Blockchain is becoming increasingly essential in a world where massive fraud is rife.

Blockchain combines transparency, traceability and control. It is an effective way of dealing with losses in the field of advertising, which are estimated to be worth more than 50 billion euros over the next few years. Professionals consider it to be the technology of the future in the online advertising sector. This new way of advertising allows for more trust and makes the payment of automated contracts easier.

Can do better

Although blockchain is seen as the best solution for making online advertising profitable, there are still some areas for improvement. According to observers, this technology is similar to the internet in the 90s. We are only at the beginning of a technological adventure that will develop rapidly in the years to come. Indeed, it is the best answer in the organization of the digital advertising field.

For the moment, the technologies included in blockchain are insufficient for it to be truly effective in the long term. But there is hope, as the implementation of a fiscal and regulatory framework is now underway. Governments are beginning to assess the future importance of blockchain and are considering serious and relevant legislative steps. They will, for example, develop provisions to properly regulate the sharing of digital tokens.

Focus on the audience

Blockchain is surely the future of online advertising because the sales of traditional newspapers are declining year by year. Advertising revenues from traditional advertising are constantly decreasing in favors of online advertising. This is where blockchain comes in as a real way to give power back to audiences.

The technology provides the opportunity to create conversions from the money spent on content. This tool will give purchasing power back to the users as well as more power to them. Traditional media often forsake audiences for greater profitability. In a world dominated by giants like Google or Amazon, decentralized protocols are the right solutions to contain the onslaught.

These crypto-active protocols also make it possible to shake up the habits of Internet users on the web. The blockchain is thus the future of online advertising where the audience is of paramount importance. This calls into question the policies of advertisers as well as the editorial line already in place.

What are the applications and challenges of blockchain for online advertising?

The upheavals experienced by the advertising market over the past decade (arrival of the major digital platforms, advent of real time bidding, development of numerous intermediaries, etc.) are undoubtedly only a first step. Far from being the end of the story, these transformations will probably lead to others, linked in particular to the progress of artificial intelligence or the growth of adblockers.

Blockchain technologies are part of this transformation of the sector. Online advertising ticks all the boxes of the sector that can typically be transformed by blockchain: a sector with multiple intermediaries; where part of the value is lost along the chain; and which lacks transparency. To meet these challenges, several types of blockchain applications are beginning to be developed:

-Traceability of digital advertising distribution paths, as well as payments between players, to improve the transparency and reliability of the sector. Extract: “With this mechanism, the transactions carried out would become visible to all the stakeholders of the blockchain used, in real time. The advertiser would then be able to check what exactly his expenses correspond to, allowing for a better analysis of his costs. More generally, the chain’s stakeholders would be able to track and audit the entire path of the impressions, thanks to the token metadata written in the blockchain. This system should allow the various stakeholders in the sector, from the media agency to the publisher, to work hand in hand in complete confidence.”

-Disintermediation of exchanges: allowing advertisers and publishers to trade directly on a peer-to-peer basis without the need for centralized ad exchanges. Extract: “Advertisers could place their ads in programmatic buying via decentralized platforms, avoiding the need for traditional real-time bidding platforms. This is what AdShares, a decentralized marketplace for programmatic advertising, intends to offer, for example.

-Automation (and disintermediation) of the advertising sales process through the use of smart contracts. Extract: “For ethers (the Ethereum blockchain cryptocurrency), anyone can buy advertising space on the site without going through any intermediary, by sending a certain amount to a smart contract executed on Ethereum. If the conditions defined beforehand in the smart contract are met (payment of the right amount, and availability of the desired space), the transaction is then established automatically.”

-Cryptocurrency “mining” as a new source of revenue for websites. Extract: “On 16 September 2017, the download site The Pirate Bay experimented with a new method of funding its activities: getting its visitors to “mine” cryptocurrencies for The Pirate Bay when they surf the site. In France, the news site Street press announced in November 2017 that it would test this method as an alternative business model.”

Some of these applications are particularly revolutionary and forward-looking; others have already been starting to be tested for some months. In September 2017, the Interactive Advertising Bureau (IAB), which brings together online advertising players particularly in the US and Europe, announced the creation of a blockchain working group to explore its potential. Experimentation by players in the sector, some of which has already begun, should develop over the coming months.

Would you like to get more information about blockchain technology for your business? Contact us today.

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