Is blockchain the answer to digital advertising’s trust gap?

Digital advertising reached $130 billion in the US in 2018—just under 50% of total advertising spending—according to PwC's Global Entertainment & Media Outlook 2018-2022. By 2019, it will reach $144 billion. Meanwhile, the digital advertising ecosystem—which includes technology, media, and telecom firms—could lose up to $19 billion in fraud.   

Blockchain offers a solution: a digital dashboard, where ad buyers can verify, in near-real time, the specifics of how all their various ads, in all the different channels, are performing. The dashboard shows which ads are driving engagement and desired outcomes, and by how much. It can even confirm the authenticity of the digital outlets where the ads appear.

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Mistrust takes a toll on digital advertising

Each point where data flows among participants is a point of weakness, where fraud, error, or a reluctance to share, could cause the flow to fail, making it difficult or impossible to accurately measure an ad’s impact. 

The blockchain solution to the advertising trust gap

Picture a digital dashboard, where ad buyers can verify, in near-real time, the specifics of how all their various ads, in all the different channels, are performing: which ads are driving engagement and desired outcomes, and by how much. This dashboard can even confirm the authenticity of the digital outlets where the ads appear.

Blockchain—a technology of trust

Blockchain’s core technology is a digital add-only ledger, whose records are distributed among its participants. It has multiple layers of security built in, and it can easily host smart contracts, which orchestrate and automate many common transactions.

Due to blockchain’s structure, data blocks are immutable. Those individual participants who have permission (and only those participants) can access these verified, tamper-proof records through individual, customized dashboards. The data flows and transactions are fast, largely automated, transparent where needed, hidden by cryptography where not, and highly trustworthy for every participant — including consumers.

Obstacles to blockchain

Regulatory uncertainty tops the list of challenges, since in most jurisdictions, there is still uncertainty as to how blockchain should comply with privacy and other regulations, which are evolving. Trust may seem a surprising challenge, since one of blockchain’s main purposes is to create trust where none existed before. Yet participants still must trust each other enough to pool forces to build and use the blockchain.

Overcoming obstacles to a digital advertising blockchain

The biggest obstacles that digital advertising stakeholders must overcome include:

  • In advertising, data is the product. Companies, fearful of losing the intellectual property that defines them, may require extensive convincing before they trust blockchain.

  • A vast, complex ecosystem. A highly fragmented industry will have to collaborate on how to authenticate digital identities, properties and impressions.

  • Rapid pace of innovation. A digital advertising blockchain will need to be adaptable and scalable to work with new processes, products, as well as evolving data and measurement standards.

 

  • Misaligned interests. Many ecosystem participants have competing interests.

  • The need for consumer buy-in. Consumers may not agree to share their data.
  • Speed and size. Most industry applications will need both low latency and extremely high volume, without sacrificing privacy or security.
  • Multiple pressure points for regulations. A blockchain with sensitive data flowing through so many connections will need impeccable, agile compliance.

Action plan: steps toward a digital advertising blockchain

PwC research has identified four strategies for blockchain business success:

  • Make the business case: evolution, not revolution

  • Build an industry ecosystem

  • Design deliberately

  • Navigate regulatory uncertainty

Here are some ways in which the digital advertising industry can advance on all four.

Explain the power

For digital advertising, the business value lies in its power to automate and scale trust — efforts to explain this value to industry groups and business partners will support implementation.

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Start where it’s easiest

Some parts of the digital advertising ecosystem are more ready than others for blockchain. Both OTT media services and in-app advertising already require users to login with unique credentials, offering a starting point for trusted data and identities on a blockchain.

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Start with a few trusted partners

The more participants a digital advertising blockchain has, the more value it can provide — but it is not necessary for every possible participant to be on board at the start.

A blockchain proof of concept can focus on a specific problem which a few trusted collaborators can solve, but the blockchain should be designed so that it can scale. That requires giving it the technical means to handle high data flows and transaction volumes, and choosing rules of engagement so that organizations that do not trust each other can participate later.

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Monitor and build on others’ success

Digital advertising has not been leading the blockchain pack, but it can learn from the leaders. Blockchains are either up and running or in advanced development in areas such as:

  • fighting counterfeit product

  • safeguarding the pharmaceutical supply chain

  • music rights management and payments

  • food safety

  • credentials management

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Agree on standards

Participants will have to agree on definitions, labels, units of measurement, and other standards for everything from viewability to prices and performance. Both buy-side and sell-side teams should participate in these discussions.

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The bottom line

Blockchain’s ability to conduct trusted transactions, manage and record data securely, and increase automation could reduce fraud, increase data reliability, protect privacy rights, enable better data flows among partners, and deliver the right ads to the right consumers in the right places.

The technology is ready. It’s time to start.

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Scott Likens

Emerging Technology Leader, US, China, and Japan, PwC US

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CJ Bangah

Principal, PwC US

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