Blockchain Advertising - Tangoo
31.05.2023 Marketing Pills

Blockchain Advertising

The era of secure and transparent advertising

by Marketing department

Blockchain is ready to revolutionize businesses in the same way the internet did a quarter of a century ago. The buzz surrounding this seemingly new and secure electronic ledger is already real and tangible. Essentially, Blockchain represents a new paradigm for how information is shared.

In fact, there are several smart contracts that companies can use and integrate into their processes easily and securely. It is secure because the Blockchain can only be updated with the consensus of the participants in the system and contains an authentic and verifiable record of every single transaction made in the system. This is now clear, to the point that more and more companies and organizations are embracing it, opening up new scenarios of innovation and the development of their products and services.

With the goal of promoting this new technology and its adoption, numerous industry associations, organizations, and consortia have emerged. Among these are Blockchain Italia, INATBA at the European level, and BAA, active in the digital advertising sector.

The Blockchain revolution in the world of advertising

Blockchain is becoming increasingly popular in various sectors, including shipping, FinTech, healthcare, energy, and advertising. In particular, it is being used for the purchase of advertising space, and it is projected that by 2032, the global Blockchain market in this sector will reach a value of $208.71 billion, with a growth rate of 81.1% compared to 2022. Its application in advertising could address significant issues such as lack of transparency, fraud, and user data management.

Fraud. To carry out transactions on the blockchain, advertisers must possess cryptocurrencies such as Bitcoin or Ethereum (or as we will see later, SOL or MATIC). As the transaction ledger is traceable and resistant to fraud, a high level of security is guaranteed, thereby preventing fraud . This could solve one of the main issues in the industry, where, in the United States alone, the amount lost due to advertising fraud was $81 billion in 2022, equivalent to 30% of programmatic advertising spending. Unique identifiers for advertisers and publishers also prevent phenomena like “domain spoofing”, which involves placing advertisements on unverified networks or fraudulent websites, because every transaction is recorded on all network nodes and visible to all. Advertisers can transparently monitor their ads, and information about the data becomes immutable and transparent, ensuring greater security and reliability for advertisers.

Intermediation. The decentralized nature of blockchain allows advertisers and website owners to interact directly, eliminating intermediaries. This reduces agency fees and ensures a more transparent, secure, and efficient process for purchasing advertising space.

Inflation. The decentralization of cryptocurrencies also makes them useful for reducing the risk of inflation, especially in countries with limited purchasing power or highly unstable currencies. For example, in Argentina, inflation increased by 94.8% in just one year, and the use of global cryptocurrencies can significantly alleviate the problem by facilitating access to capital and funds, thereby increasing global competition.

Payments. Blockchain enables secure and instant payments, eliminating delays and costs associated with traditional transactions, without the need for intermediaries such as banks, credit cards, or platforms. In fact, it simplifies and speeds up the payment process. It is important to choose the right Blockchain that offers cost-effective solutions, which can be done by comparing Gas Fees, which should be low, and also considering TPS (Transactions Per Second).

User data protection. Only the wallet holder can access the encrypted information, which is safeguarded by the blockchain system itself, making it secure data. Additionally, due to its decentralized nature, the Blockchain is less susceptible to hacker attacks compared to traditional centralized data sources, thanks to the complete transaction records present in each node. This means that data is not controlled by a few companies that can manipulate it as they please, but rather distributed fairly among all the users participating in the network.

Several distributed ledgers already exist that allow marketing professionals to leverage the aforementioned advantages. For example, AdEx offers functionalities for ad profiling, targeting, and result measurement, while AdChain uses a token called “ADT” to create a list of reliable websites, reducing the risk of advertising fraud. Another example is BitMedia, which enables the purchase of advertising space on websites that accept Bitcoin as digital currency, while XCHNG provides a transparent, intermediary-free advertising trading environment where consumer data is protected and ad targeting is precise and targeted.

Even Unilever has utilized this technology by partnering with IBM to achieve greater transparency through the verification of consistency between purchased inventory and delivered campaigns.

A crucial aspect to focus on is that Blockchain, when applied to advertising, will allow users to regain control over their personal information. Both data and digital identity will be managed directly by the wallet, and advertisers will have to acquire them directly from individual users rather than having them owned by platforms and publishers.

The change is no longer a question of “if,” but of how quickly it arrives and transforms markets, business operations, and advertising practices. It is fascinating to imagine the extent to which this technology will be applied in the advertising industry.

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