Blockchain or bust: how blockchain technology can benefit digital marketing
Blockchain, while it has limitations, could provide a remedy for two of the biggest issues facing digital marketing: ad fraud and the demise of cookies. GroupM product director Charles Dangibeaud takes a look at the benefits and drawbacks of this technology.
Problems are the root of all innovation. And currently, in the digital marketing space, there are two prevalent issues challenging the industry, both waiting for an innovative solution. The first is fraud in digital advertising, with an estimated $35bn lost globally to ad fraud in 2020, according to cybersecurity firm Cheq. Meanwhile, the other is the ongoing debate around cookies and user privacy, as lawmakers globally continue to crack down on the use of personal information for segmenting and targeting audiences. Yet, the remedy to these two issues may be right in front us: blockchain technology. While often met with hesitation, likely due to uncertainty about what it can actually achieve and the hurdles it faces from a scalability and an environmental perspective, blockchain is here to stay – and for good reason. In a nutshell, blockchain technology is an un-hackable, fully transparent, single source of truth for companies to record information and authenticate products or transactions. Everything from luxury watches to wine, real estate, even your Air Jordans, can be verified and tracked on the blockchain. But how can this technology benefit digital marketing? And what are the limitations, or even drawbacks, to a new blockchained future?
First comes blockchain’s potential ability to prevent fraud through what are known as ‘smart contracts’. Smart contacts are simple programs stored on the block to run when specific predetermined conditions are met. To illustrate, imagine users, advertisers and publishers are all on the blockchain. This means their data, such as the ad placement options, the users (and their advertised consent statuses), engagement metrics, reach, prices and so on are verified and updated in real time. In this environment, a marketer could create a smart contract where future ads are bought from publishers and ad networks based on several conditions. While this may not seem markedly different process, the extra layer of security due to the verification process of all three parties would mean that each impression is verified and confirmed before the ad is served to the user. In other words, it would become incredibly difficult, if not impossible, for fraudsters to exploit a publisher through ad stacking, click bots or any non-human form of fraud. And what about privacy? Recent figures show that 58% of ad blocker users chose to do so to protect their privacy (eMarketer, 2021), underscoring the significance of this issue. Yet blockchain may present an opportunity for users to own their data and choose how they engage with advertisers. For example, Brave browser, a company out of the US from the founder of Mozilla Firefox, pays users with basic attention tokens (called BATs) when they accept to be exposed or engage with certain ad units. This constitutes consent of the user and shifts the paradigm towards that of a more tangible value exchange, one where perhaps scrolling through Instagram actually pays. And importantly, as platforms start to recognise that value of users’ data and engagement, it provides an opportunity for advertisers to build back trust with users and rediscover the joy of a great ad experience.
But before we all get too hyped on blockchain, there’s of course some challenges to tackle. Blockchain, in essence, was created to support Cryptocurrencies, like Bitcoin, which remains an unregulated and volatile space. It is somewhat ironic that blockchain has both the power to combat fraud, while also creating a space for people to operate outside of the traditional financial world. Everything is tracked; however, users can operate with greater anonymity. This dynamic may shift in the future, as banks and businesses implement their own blockchain solutions and evolve the current financial ecosystem. Building on this, transactions on the blockchain (such as smart contracts) at the moment typically use a blockchain protocol and its associated cryptocurrency called Ethereum. But Ethereum has a long way to go before being adopted by businesses en masse, and scaled for everyday use. It’s not only expensive and slow, but its carbon emissions also currently make it an unsustainable option for any industry or company with a strong view on environmental concerns. Ethereum claims an upgrade is coming, but there are other competitors in the space as well, such as Hedera Hashgraph and Aussie-bred Immutable X, so the space is on the verge of a shake up.
All up, it’s probably time to start learning, and considering blockchain as a potential solution in the future of marketing. Because while blockchain might seem like a distant revolution, or maybe one that may never happen, technological innovations often move fast, and ruthlessly. And in these moments I reflect on a clip from Bill Gates on the David Letterman show in the US in 1995. In the episode, Bill Gates explains how the internet works and why he believes it will revolutionise our lives and businesses. Yet for every example he provides of how the internet could change his life, Letterman has a retort. Gates explain you can listen to a baseball game using the internet, Letterman says he has the radio for that. Gates responds saying you can listen to the game any time, Letterman says he has tapes for that. Gates says you can get the latest information about your hobbies, Letterman says he subscribes to two magazines. Finally, the cat and mouse back and forth comes to a halt when Gates says you can use the internet connect with others, to be part of a social network, Letterman just laughs and stops short of responding with “Why would I want that?”.
Charles Dangibeaud
GroupM product director Charles Dangibeaud
Using blockchain to combat fraud instead of commit it, that’s a new one!
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