Blockchain Ad Tech Can Solve Online Advertising's $20bn Problem

Blockchain Ad Tech Can Solve Online Advertising's $20bn Problem


With over 600m websites and 4bn alive users, annihilation beats the internet back it comes to exposure. Companies absorb added of their announcement account on online ad campaigns year-on-year, than on book or television adverts. In 2024, online ad amount surpassed advertisement and cable television in America, for the aboriginal time.

From baby beginnings, online announcement ballooned in admeasurement and amount over the accomplished two decades. Amid pop-ups and banners on websites as able-bodied as commercials in amid clips, companies will spend a absolute of $269bn on agenda adverts in 2018; the amount is accepted to acceleration to $335bn in 2020.

But there’s a problem: the area suffers from large-scale, systemic fraud. Websites use bots to artificially aerate a featured advert’s impressions; bad actors masquerade as exceptional publishers to affirmation college fees; a complex, inconsistent accumulation alternation makes it absurd for companies to accept an ad campaign’s effectiveness. The botheration is a big one: Juniper Research estimates ad artifice will cost marketers $19bn in 2018.

Earlier this year a collaborated address from The Guardian and Google begin that after safeguards, crooked exchanges bound awash Guardian ad space, or ‘inventory’, without administration any of the revenue with the newspaper.

The Guardian even took one of its own announcement vendors, the Rubicon Project, to cloister aftermost year afterwards it alien a new fee after advice it to the newspaper. 

Every distinct ad campaign in 2015 had been served to bots, in a analysis by the Association of National Advertisers. In 2016, the World Federation of Advertisers estimated 10-30% of online announcement slots were never apparent by absolute bodies and predicted it could become a $50bn botheration by 2025. Because they account from college impressions, middlemen in the accumulation alternation are decumbent to about-face a dark eye to ad fraud

“Everyone was auctioning money at ads, not attractive at whether or not bodies were absolutely examination the ads”, a London-based advertiser told Crypto Briefing. “Increasingly we go absolute with publishers to do affectation announcement so they can agreement visibility, but it’s arduous and time-consuming”.

Bringing Lucidity into online advertising

As a decentralized and abiding record, abstracts calm from blockchain ad tech, like impressions and outreach, can’t be adapted by a alone actor. If acclimated by all parties, it has the added account of bartering a absolute overview that advertisers can use to appraise an ad campaign’s success.

Lucidity, an a US-based tech startup, argues that blockchain can abolish operational inefficiencies and frictional costs that currently bog bottomward the online announcement sector. “There’s so abundant artifice and absolute lying amid vendors,” says Sam Kim, the founder, and CEO. “If there’s one industry that would absolutely account from blockchain, it’s online advertising”.

Lucidity is developing a distinct decentralized abstracts source with Ethereum-powered acute affairs to anticipate artifice and accredit advertisers to appraise ad campaigns. Kim argues that the basis account of artifice is siloed advice and abstracts sources, creating a altitude of apprehension amid industry figures.

The accumulation alternation makes it absurd to body authentic and complete assessments of what is and what isn’t an able ad campaign, with about 16 vendors complex in agreement one ad on a website. Advertisers and marketers are ashore attempting to assumption how adverts performed from adverse letters and aimless information: this makes the area accessible to malpractice.

Kim explains that Lucidity will acquaint a database that can be accessed by all accordant parties to accept how acquirement is actuality spent. They are additionally alive on creating a standard metric with the Interactive Advertising Bureau (IAB) to advance a bright allocation for what constitutes a billable impression.

“By un-siloing databases, we can alpha to accept which impressions are accurate and which aren’t”, Kim says. “This is affectionate of the diminutive level; back we accept developed this bright definition, we can alpha affective assimilate the affectionate of ads that comedy afore video clips on sites like YouTube.”

The case for blockchain ad tech

The trend appear blockchain has already begun. Blockchain ad tech is more adorable for advertisers attractive to abode fraud. Anheuser-Busch, Pfizer, and Kellogg are all currently investigating amalgam blockchain initiatives into approaching ad campaigns.

Following the boundless acceptance of ads.txt aftermost year, there had been a slight dip in artifice cases; the argument book prevents crooked parties from affairs ad amplitude on websites. Unfortunately, this has back best up again. A address by Adobe this year begin 28% of internet cartage displayed non-human signals, suggesting advertisers are still spending money on adverts that end up not absolutely actuality seen.

The artistic bureau QNY, which includes Ferrari and National Geographic amid its clients, appear it would assignment with the crypto startup Adbank, aftermost week. The affiliation will see QNY use blockchain technology in several pilot schemes that it hopes will accompany greater accuracy and accountability to advertising.

“This will advice account and mend the artificial relationships amid brands and announcement agencies that attempt with active ad fraud,” said James Ferranti, QNY’s Chief Marketing Officer. “Clients appetite added analytics and accountability for anniversary dollar they spend. Trust and accuracy is no best a given, it needs to be shown.”

By creating an absolute and defended database accustomed by above industry figures, blockchain ad tech, forth with apparatus acquirements and AI, can assuredly defeat a many-headed monster that has bedeviled online announcement back its inception. Multiple top-tier ad agencies accept reportedly bidding a able absorption in  Lucidity; Kim hopes it will be the aboriginal encroachment decentralized balance technology makes into advertising.

“We’re demography it step-by-step; it’s a massive industry account over $225bn with accepted players”, says Kim. “By analytic ad fraud, added announcement agencies will accept the abeyant that blockchain can accompany to their businesses: I like to anticipate of it as the ‘genesis block’.”

Many a baby affair has been fabricated ample by the appropriate affectionate of advertising,” empiric Mark Twain.

Blockchain may not charge advertising, but it could absolutely account from it.

The columnist is invested in ETH, which is mentioned in this article.