By Charles Awanda, Certified Blockchain Expert, Chief Knowledge Broker Songhai labs.
Blockchain is widely known as the technology behind the popular cryptocurrency bitcoin. But as its name indicates, it is an end to end digital record of any given transaction.
Blockchain is made with individual records called blocks that are linked together to form a chain of blocks. Blockchain is designed to be transparent, immutable, secured, and distributed.
Although the most known applications of Blockchain are in the world of Finance and technology, Digital Marketing could be an area that will see an explosion of blockchain applications in the coming years. We will explore in this paper 3 key reasons why digital marketers should embrace blockchain.
You can promote ads without a middleman
The current digital marketing advertising models today use third parties companies such as Google to promote advertising.
Let’s go through an example. Let’s say a company wants to use Search Engine Marketing for promotion. Instead of organically finding advertisers, they might decide to display Google Banner ads on their website because of the credibility and reputation of Google.
In this case, Google will act as a middleman. Google is a third party platform that connects advertisers with customers Third parties companies are therefore used as middlemen in the process between companies placing ads and end-user consumers.
What ads promoters hope to get from third parties like Google is to utilize their reputation and the ability to reach a targeted audience.
Although this approach is the most widely used, it does not always guarantee an appropriate targeted audience and it generates costs from ads promoters to compensate the third parties companies.
Blockchain enables advertisers to skip middlemen networks and advertise to a more targeted audience that is actually interested in viewing the ad.
The Brave browser of BAT (Basic Attention Token) will reward consumers with tokens for the ads for which they interact. So in this model, the trade is not focused on the availability of ad space but rather on the attention the ad generates.
It can eliminate ad fraud
Ad fraud is a criminal activity that uses deliberate and malicious techniques to distort and distract the delivery of ad contents to the correct targeted audience. Ad fraud can take different forms: traffic fraud, click fraud, conversion fraud, ad stacking, etc.
One of the key reasons ad frauds are happening is because third party companies that play the role of intermediaries are not incentivized to differentiate between human beings and robots. Blockchain technology can significantly reduce ad fraud as it introduces radical transparency in the ad industry.
Advertising is essentially a number’s game. Digital publishers get most of their money from ads display but at the same time ads display are a function of the traffic digital publishers can draw in their websites. In order to capture that traffic, different fraudulent activities are initiated.
According to a report by emarketer.com, Digital advertising in 2019 generated around $128.53 billion and was projected for about half of all media ad spend. In that year, about 42 billion were lost in fraud.
If the trend continues the amount of ad fraud could reach 100 billion by 2023. Thus, the critical necessity to tackle the problem.
Blockchain offers an ideal solution to counter Ad fraud. The traceability makes it easier for advertisers to track who is viewing the ads and ensures the ads are going to the right target audience.
Through blockchain, it is possible to develop effective performance metrics that involve the total expenditure, number of views, conversion, and engagement rates that optimizes ad safety and precision of targeting real audiences.
There are currently different blockchain startups and projects that fight against ad fraud using blockchain technology.
Toyota is currently developing a blockchain-based advertising model in partnership with Lucidity, a blockchain advertising analytics firm. Through this partnership, Toyota hopes to reduce the impact of fraud on its digital ad purchases.
Besides Toyota, IBM is also working on a version of its enterprise blockchain solution, Hyperledger Fabric, in partnership with Mediaocean, a digital advertising firm, and other firms Unilever, Kellogg’s, and Kimberly-Clark.
The project is expected to record impression-level data as well as related transactional data, such as purchase orders and payments, to better trace the customer impressions and journey.
It is profitable
Both advertisers and publishers can substantially increase their profits in digital Marketing using Blockchain technology.
According to an analyst from Forrester Research, by removing the middleman, ad publishers can increase their CPM (Cost per Thousand Impression) from $1 to $5. Blockchain does this even better, it can allow companies to pay their targeted audience directly to view their ads, thus, completely negating the need for a middleman.
Eliminating the middleman will make advertisements more profitable since marketers won’t have to pay additional fees for the transactions.
A typical ad campaign can involve multiple fees paid to third parties companies such as an agency trading desk, a demand-side platform, a supply-side platform, an ad exchange, and various other networks.
In some cases, middlemen or third parties companies can take close to half of the costs of an ad campaign. The savings generated through the adoption of blockchain can be important and ultimately increase the profit of a company.
TibeOs, a company using blockchain for Digital marketing claims that using their model, publishers receive 85% of an ad’s revenue share.
That’s about 50%-100% more revenue share given by most major networks, which is a significant improvement in revenues.
This trend is expected to be generalized as Blockchain becomes widely adopted in Digital marketing.
Finally, the benefit obtained in reducing ad fraud with blockchain will directly benefit advertisers. Instead of losing revenues to bots and scammers digital marketers using blockchain technology will ultimately have ads that fully reward them for the money they have invested.
Prepared by Patrick O’Brien.
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