Advertising and Marketing on the Blockchain

empty billboard awaiting an advertisement

Advertising’s Uncertain Present

Advertising has struggled more than most to adapt to the internet age. The old model was straightforward, simple, perhaps even elegant. Brands would contract agencies to create advertisements for TV, radio, and print. Once the ad was in place the amount of attention it received was easy to determine via Nielsen ratings, Arbitron ratings, and subscription numbers. Of course, there were less tangible vectors such as billboards, but overall a brand had a reliable picture of the relationship between attention and increased sales.

But the rise of the internet has created more intermediaries, enabled widespread fraud, and made consumers feel that their data and privacy are routinely abused. Let’s examine how Blockchain can pull the industry out of its tailspin, and if not return it to simpler times, then reduce the friction of modernity.

Portable people meter
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This flashy number picks up on audio tones to record TV and radio habits. Source: Wikimedia Commons.

Eliminate the Middleman

The internet has destroyed traditional trust models by lowering the bar of entry to all modes of communication. Unless an ad is transmitted through relics of old media like cable television stations or the NYT website, customers are wary of being gulled by deceptive ad campaigns. (As they should be: histrionic clickbait and outright scams run rampant.)

If the advertiser is someone the consumer trusts, all that doubt melts away. If, for example, a traveling gourmand recommends a particular Scottish whiskey, their followers are bound to take the endorsement seriously. The problem begins when, for reasons of time, money, or ignorance, online influencers sign up with an affiliate network which serves as a middleman.

The network is beholden to no one but themselves for their data. They can give false data about clickthroughs, underpay the influencer, or leverage their power to take advantage wherever possible without adding any value to the mix.

The Blockchain can eliminate such intermediaries in one fell swoop. Brands can work directly with influencers through smart contract technology and web platform interfaces designed by third parties who issue only small transaction fees.

Ad Fraud

Without reliable tracking systems like Nielsen ratings for the internet, ad fraud continues to be a significant thorn in the side of brands and agencies. It’s estimated that $19 billion will be lost to fraud in 2018.

Viewability is almost impossible to confirm. Websites can use bots to inflate numbers artificially, and brands may have little recourse to prove their claims wrong. These bot driven ads often never reach the public at all.

Blockchain in combination with other technologies can limit fraud. Bots can be detected by analyzing characteristics of traffic on a site, and if found, such data can trigger a clause in a smart contract held between brand, agency, and website, that immediately cancels the ad buy and refunds all parties at the expense of the guilty. An industry-wide reputation system connected to the blockchain can record instances of fraud, helping brands and agencies avoid bad actors in the future.

Give the Customer Control over Their Data

While customers have tacitly agreed to lose control over their data via terms of service agreements, they are far from comfortable with their browsing lives being chopped up and sold to the highest bidder. The Cambridge Analytics scandal may have made the headlines for political reasons, but it was indistinguishable from the business models of Facebook, Google, Twitter, etc., have been plying for years now.

It may be an excellent idea to destroy this business model in favor of something entirely different, but until that comes to pass, blockchain based companies like Kind Ads can entice customers by offering control over their own digital lives. Wine connoisseurs, for example, can sell information about their age, income, location, social media presence, and eating habits to wine companies on an open marketplace. In return, the wine companies offer them personalized ads as well as special offers, discounts, or rebates. Payment is made through the platform’s cryptocurrency which can be exchanged for fiat or directly for the products advertised.

Advertising already senses the potential, and we’ve seen blockchain grow by 400 percent the past year. As major companies like IBM create their blockchains and build partnerships, mass adoption won’t be far behind.


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