Blockchain is the newest addition to the Gartner Hype Cycle for the advertising industry with the technology classified as an innovation trigger.
That means there are many opportunities to catch low hanging fruits as blockchain for advertising just begins the hype cycle.
“Blockchain for advertising covers a range of applications of blockchain technology to elements in the advertising supply chain that suffer from fraud, lack of transparency and barriers to open competition,” Gartner says, further adding:
“Blockchain for advertising is early in the Innovation Trigger stage of the Hype Cycle. While blockchain’s powers seem poised to address many problems facing digital advertising, significant problems of scalability, performance and adoption must be surmounted before blockchain can alter the status quo.”
One project trying to take advantage of this new innovative space in advertising appears to be at the proof of concept stage while undergoing an Initial Exchange Offering (IEO).
SaTT claims to provide transparency in advertising while removing middle-men by connecting advertisers to publishers directly through smart contracts and oracles.
“SaTT is regulated by a Smart Contract which lists advertising offers with all data held securely in the Ethereum blockchain. The Smart Contract sets the conditions for participation in campaigns, quantifies the success, and guarantees the final renumeration.” So they say before adding something quite interesting:
“When an application connects to Google Analytics and returns the volume of a publisher’s traffic on the advertiser’s website at the end of the month to an oracle module, it uses that data to determine if the conditions of the Smart Contract are fulfilled. Several oracles may be involved in the process before a Smart Contract based transaction is approved.”
In effect this replaces advertising agencies with a smart contract, with one important area in particular as far as publishers are concerned being affiliate ads.
Affiliate ads pay out on action, if someone buys a book let’s say. The problem is the publisher knows if someone has clicked the ad and not whether that someone then goes on to buy the book.
The publisher thus has to fully trust the merchant, but sales data could potentially be shared while maintaining privacy with a copy of them basically sort of viewable by both the merchant and the advertiser.
The system would necessarily be a bit complex and would take some effort to build, but Google has become a trillion dollar industry primarily because of advertising.
Blockchain, the Next Trillion Dollar Company?
“It’s time to invest our brainpower into an ecosystem that builds in quality, civility, transparency, privacy and control from the very start.”
So said P&G’s boss Marc Pritchard while effectively scolding Google and Facebook, the near advertising duopoly.
“Ideally we will all take these steps and work together to create an entirely new media supply chain for our industry that creates greater value and trust for the consumers we serve,” he added.
P&G is a very big advertiser and what they say, for good or bad, has much weight. In addition it appears there’s a feeling of plateau or stagnation in advertising.
“Is this as good as it gets?” – an AdOps manager says before listing all the potential optimizations. “Until the programmatic market collapses and/or regulation strangles the big guys, you are probably right,” was one reply.
The third alternative is of course innovation, the use of new technologies to reinvigorate imagination.
Transparency, ironically, may turn out to be blockchain’s biggest use case. As well as the sharing of data that can’t then be changed, the reduction of trade or exchange to code, and then the digital scarcity which through a token adds the profit motive.
Blockchain on its own might not be able to do a lot beyond the above, but in combination with other technologies it can lead to new, better products and offerings.
In advertising especially there are numerous low hanging fruit opportunities as blockchain can solve some real problems which can’t be solved otherwise, such as the somewhat trustless sharing of data that can allow the publisher to know the affiliate advertiser is not cheating.
These potential opportunities have not really even begun being explored yet very much. That is beginning to change, with yet another race now potentially opening.