Blockchain Will Have A Key Role In The Future Of Digital Ads

Blockchain Revolutionizes Digital Advertising: Privacy & Efficiency

As the advertising industry is forced to evolve away from using third-party cookies, blockchain has emerged as a promising alternative, providing a number of advantages over traditional models. 

The digital ad industry has long been beset by problems, not only around privacy, security and transparency, While it’s no secret that a larger number of internet users are unhappy about big web giants like Google and Amazon building up enormous databases containing people’s browsing habits, the industry is also plagued by problems like click-fraud, which costs advertisers millions of dollars in wasted ad spend. 

Blockchain is emerging as a solution to all of these problems, thanks to its unprecedented transparency, security and efficiency. 

Blockchains are decentralized ledgers that were first popularized by the cryptocurrency industry. Spread across a network of nodes or individual computers, they record transactions securely and immutably, providing a tamper-proof record that anyone can look at. As such, it’s perfectly suited for the advertising industry’s needs. 

Perfect For Ads

In the digital ad world, blockchain has the potential to solve a number of key problems and provide extensive benefits for advertisers and consumers alike. 

The number one thing about blockchain is its transparency, as it creates a permanent record of transactions. The ad industry can leverage this capability to track advertising campaigns so that all stakeholders can verify the flow of money spent on them. 

In turn, this enables blockchain to prevent advertising fraud. Because it keeps track of every single ad impression, it can show if the ad was seen by a real human or a bot. This makes it much easier for advertisers to combat fraudulent activities such as click fraud, where bots perform dozens of fake clicks to boost the number of views an ad has purportedly received. 

What’s more, by automating various processes with smart contracts, blockchain can simplify some of the complex supply chains in the advertising industry, eliminating middlemen to reduce costs while delivering ads more efficiently. 

Advertisers will also benefit from being able to deliver more targeted ads. By using blockchain data, businesses will be able to target more specific audiences based on their previous interactions with Web3. For instance, they can use smart contracts to make sure that their ads will only be seen by consumers in the most relevant age groups, or else target ads based on user’s purchasing histories, demographics or location. 

Consumers will benefit from more privacy because blockchain technologies provide them with a way to maintain more control over their data. In some models, Web3 advertisers even offer users compensation, in the shape of crypto, for sharing data that may be relevant to marketers. 

Decentralized Ad Networks

The Web3 advertising model will be built on the concept of decentralized ad networks based on blockchains, where advertisers and publishers can connect directly, without any middlemen. All transactions and ad auctions will take place right there in the open, ensuring fairness. 

Surprisingly, IBM is one of the companies at the forefront of this push. Although it has a reputation as a technology dinosaur, IBM is one of the most innovative and forward-thinking members of Silicon Valley’s old guard in terms of blockchain technology. 

The company has already developed a blockchain-based ad platform that enables advertisers to monitor the entire lifecycle of their advertising campaigns, with tools for tracking costs and analyzing how successful those campaigns are. Using its platform, businesses can adjust their ad campaigns in real time to try and boost their effectiveness. 

By ensuring that their ads are seen by the right audiences, advertisers will only need to make payments when specific conditions have been met. Click-fraud becomes a thing of the past, enabling businesses to get much more bang for their advertising bucks. 

Crypto For Clicks

One of the most innovative decentralized ad exchange platforms is AdEx Network, which was founded in 2017 as a traditional ad exchange platform, only to pivot when it realized the potential of blockchain. 

AdEx aims to connect Web3 brands with the huge audiences in the crypto realm by leveraging their blockchain-based histories. It caters to advertisers via a programmatic advertising system that sources traffic through a real-time bidding process. Its platform helps to enhance the performance of ad campaigns by leveraging a key innovation it calls a “Zero-Knowledge Targeting Engine” based on data stored on the blockchain. Instead of tapping into databases held on centralized servers, it accesses private data held by user’s on their own devices, but only if it’s given permission to do so. 

The ad targeting process takes place on the user’s device too, ensuring that they remain totally anonymous and in full control of their data. Users can opt-in and receive ADX tokens as rewards for doing so, or else opt-out entirely and remain free of targeted ads. 

A novel benefit of this is that Web3 users can specify exactly what kinds of ads they want to see. So there should be far less irritating ads of irrelevant products and services, and more of the kinds of things you’ll actually be willing to spend your money on. 

AdEx’s growing ad platform provides solid value to its native ADX token. Because advertisers must spend ADX tokens to bid for advertising slots, this creates strong demand for the token, meaning that its rewards can be very tangible for users. Despite ADX’s small market cap, it shows some impressive trading volumes, underscoring the strong demand. 

Another example of ads that give back is the Brave browser, which integrates a decentralized advertising platform while applying traditional ad blockers to prevent third-party ads from cluttering up the websites its users visit. 

With Brave, users can earn Basic Attention Tokens or BAT for each ad they view. In return, they agree to let advertisers see their browsing histories so they can better target those ads. 

It runs a decentralized ad marketplace where brands pay directly to show their ads to its users, ensuring that they receive real, human clicks. Brave’s users will only see the ads if they decide to opt in, and if not, they’ll enjoy an entirely ad-free browsing experience. 

Like with AdEx, advertisers are required to pay for their ad slots in BAT tokens, and that creates a market for the cryptocurrency. Users can sell the BAT they earn on crypto exchanges, or alternatively send it as a “tip” to their favorite websites. In this way, it allows its users to give something back to their favorite content creators, without spending any of their own money. 

Final Thoughts

From these examples it becomes clear that there’s a lot of upside to using blockchain to power the next-generation of advertising networks. Blockchain provides a reliable way for advertisers to ditch those hated, privacy-invading third-party cookies and reduce their dependence on big tech companies for the data needed to properly target their ads. Meanwhile, consumers get more privacy and the ability to influence what kinds of ads they want to see. 

All in all, blockchain advertising provides big advantages on both sides of the fence, with no clear disadvantages, and it’s likely to become increasingly important to advertisers as interest in Web3 and decentralization grows.