“What might digital advertisers do with an extra $19 billion in their pockets? That’s how much the digital advertising ecosystem—which includes many technology, media, and telecom firms—likely lost to fraud in 2018.
Blockchain could be the answer to fraud and many other trust-related issues that plague digital advertising. It could enable real-time, trusted data, while providing consumers with more relevant ads and stronger privacy rights.
Blockchain in digital advertising could, in short, boost both the bottom line and the customer experience. There are also significant challenges, including several unique to digital advertising, but if done right, blockchain will be more than worth the effort.”
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.
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’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.
The digital advertising ecosystem could lose up to $19 billion in fraud. Blockchain offers a solution: a digital dashboard in near-real time where ad buyers can verify the specifics of how all their various ads are performing in all the different channels.
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.
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.
PwC research has identified four strategies for blockchain business success:
Make the business case: evolution, not revolution
Build an industry ecosystem
Navigate regulatory uncertainty
Here are some ways in which the digital advertising industry can advance on all four.
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.
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.
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.
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:
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.
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.