By Bentley Kapoor (India)
According to recent statistics, the global digital advertising spending in 2020 will reach a total of $335 billion. There is no doubt that this is quite impressive, but it is also a fact that the world of digital media is rife with problems because of a lack of transparency in the supply chain. Consequently, there is an annual increase in digital ad fraud. Challenges continue to persist even though automated advertising technology is used for efficiently powering digital advertising on the sites of publishers. This is causing advertisers to lose billions of dollars each year. As per estimates, the loss in advertisement spending in 2019 globally amounted to $42 billion.
This year, these losses are expected to exceed $45 billion due to the losses from the COVID-19 pandemic and supply chain inefficiencies. The losses for digital advertisers may hit $100 billion every year by 2023. IBM’s global solutions leader for blockchain and advertising, Chad Andrews said that blockchain technology could be used for addressing various challenges with the advertising supply chain. In fact, this technology could provide transparency about where and if advertisements are being seen or not. He said that advertisers and different agencies have to deliver digital ads over numerous media properties, which results in millions or billions of impressions delivered.
Hence, this could only be accomplished with the help of a huge and complex ecosystem of intermediaries. This is where blockchain technology would be the perfect fit due to its decentralized and neutral nature and it would help in cutting down wastage in ad spending. According to Andrews, complexities in the advertising supply chain only occur due to the number of intermediaries involved. This includes demand and supply side, online real-time bidding exchanges, and data management platforms. Furthermore, there are also intermediaries who use their own data for identifying, buying, marking-up, and then reselling ad inventory.
Andrews highlighted that such companies, along with a lack of transparency, ended up making advertising a lot more expensive. He said that advertisers had to pay 2% to 3% of every ad dollar for implementation costs for getting an ad on linear television. In contrast, they have to pay 25% or even higher for getting a digital ad on a website. But, if blockchain technology is implemented, it would illuminate the actions of every vendor, fees, and value-addition while also verifying their data. In this way, it is easier to ensure that all contracts have been fulfilled.
With the use of blockchain technology, it is possible to ensure that advertisers only pay for the delivery of authentic and quality impressions. Keeping this in mind, this technology is now slowly being implemented in the digital advertising industry for solving inefficiencies. For instance, a self-serve advertising platform called AdsDax is using blockchain for bringing collaboration to different parties involved in the advertising sector, which also includes consumers. Its chief product offer, Ryan Davies said that they were looking to use blockchain technology for reducing fraud in the ad industry as this would remove intermediaries in the advertising process while providing transparency.
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