Bitcoin has been making regular headlines over the past few months, with fans and critics equally animated in their support or condemnation of the volatile cryptocurrency. Less attention-grabbing, but perhaps more interesting in the longer term, has been the digital ledger on which all Bitcoin transactions are recorded: blockchain.
The blockchain ledger is decentralized and distributed, meaning there is no one point of central control, and recorded transactions cannot be altered without the agreement of the majority of the network across which blockchain is distributed. In other words, transactions that are recorded on the blockchain should be completely transparent, and you should be able to trust their legitimacy.
What does this have to do with advertising, when blockchain appears primarily set up for the trading of cryptocurrencies such as Bitcoin? Well, trust is crucial to building a better ad ecosystem and something that many advertisers, agencies, publishers and industry organizations are determined to achieve. Over the last year, several high-profile advertisers have expressed concern with regards to brand safety, fraud, accurate measurement and clarity around how their money is being spent.
Clearly the problem exists; the question is whether or not blockchain is the solution. Numerous companies have been created on that very premise (AdEx, AdChain, BAT, to name but a few), all claiming that they are able to harness blockchain technology to make digital advertising more transparent, trustworthy and safe.
However, this is not as simple as it may appear.
Blockchain cannot ensure that all client advertising appears in a brand-safe environment; for one thing what is deemed brand-safe can be subjective and varies by brand. Even for content that is indisputably offensive, in the programmatic landscape blockchain may be able to record ads that run alongside such content, but will it be able to proactively prevent those ads from running? AdChain, for example, has created its AdToken, which is a mark of approval for a content provider. Essentially it's manual whitelisting, which is not currently feasible for the internet in its entirety.
What about fraud? How will blockchain distinguish between a human and a sophisticated bot? And then there are the issues of scale: It's not currently set up to monitor all transactions/interactions across the whole internet, nor is it capable of recording them in real-time. (At the moment it is limited to 20 transactions per second.)
So is blockchain irrelevant to the problems of digital advertising? Not necessarily. Some of its core principles apply very clearly. Blockchain offers objective verification of a transaction, independent of the parties involved in that transaction. Digital advertising needs this to give advertisers absolute confidence in the numbers they are given.
Blockchain also offers transparency of data, across the entire transaction, for anyone to see. This is the opposite of a walled garden, behind which many companies hide data pertaining to advertising measurement -- data that would be of value to clients.
Advertisers want a holistic view of their digital advertising. The theory of blockchain is indeed holistic, whereas the current digital ad ecosystem is still seriously fragmented. And the multiple parties involved in digital advertising can risk a lack of transparency for clients in terms of how their money is being spent. Blockchain shows the full transaction details between all relevant parties. This principle needs to be applied to digital media buys, too.
Blockchain is not the panacea for digital advertising's ills. In practical terms it is a long way from being applicable at scale. But its principles are both relevant and useful and the digital advertising market should apply them. Ultimately, we may reach a point at which blockchain is applicable, practically and at scale, to our industry. It will be a long process, and who knows what the value of Bitcoin will be by the time it happens.
Rather than simply waiting for it, digital advertising industry players need to continue to work together to achieve greater transparency, trust and safety -- and to thereby ensure that we are ready for the world that is envisioned by blockchain.
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