Middlemen, Privacy, and Integrity - how blockchain will change advertising
April 20, 2018 (Investorideas.com Newswire) Digital marketing is mired in controversy today, with the Cambridge Analytica and Facebook scandal in full force. There isn't much debate over Google's use of data right now, but everyone knows Google collects just as much information, if not more, than Facebook. These giants have opaque algorithms designed for advertising, and they make billions doing it. They also squeeze content providers by leveraging their near monopolies to dictate content and pricing.
On the other side, companies wanting to advertise face the issue of fake or vengeful reviews, and consumers have to sift through the noise to find legitimate information. Advertising networks have been breeding grounds for malvertising, and adblockers have become prevalent to combat this issue. Unfortunately, the adblocker is the bane of advertisers everywhere, because it doesn't matter how enticing the advert is if no one sees it.
Blockchain can these dynamics.
Removing the Behemoths
Currently, content providers are entirely dependent on a small number of platforms, and when changes to those platforms affect the content providers, there is usually an uproar from the worst affected population. However, a smart-contract based advertising network, perhaps based on Ethereum, might allow advertisers to shift their heavy focus on Google, Facebook, and YouTube to completely open and independent platforms that are public and open.
Engaging Privacy and Transparency
Many people are rightfully upset over the use of their data online. Advertising networks that track usage are somewhat invasive, but they are effective. The surge in adblockers is not simply because people hate adverts. In fact, 77% of Americans using adblockers stated they would view some adverts; but the invasive, opaque, and rampant advertising currently implemented is not desirable. The same smart contract-based advertising network mentioned above allows for the public to know exactly how its data is being used, because the smart contract itself would be public code.
The GDPR, coming into force on May 25th, 2018, will spark a major shift in the way personal data is handled online. The legislation originates in the EU, but it will have global consequences. Transparent networks that allow users control over their own data may be a safe way for advertising businesses to comply with GDPR.
For businesses and consumers, reviews are of paramount importance. Poor reviews can drive away potential customers, even if most reviews are high. Part of the reason for this seeming mismatch is a lack of trust. Who knows if all of those reviews are legitimate or not. Perhaps the only real reviews are the negative ones. Conversely, perhaps negative reviews are business assassination attempts by competitors.
Blockchain might provide a solution. A review network, based on a blockchain, could track users and businesses to ensure authenticity of reviews. Reviewers could be verified, and their pasts easily tracked and forever remain immutable. For businesses, blockchain could provide verifiable proof of their claims. Is a company really selling fair-trade coffee? If all coffee shipments were traced with RFID chips and blockchain, consumers would not have to rely on the company's word; they could simply rely on the data presented in public.
The main question is not whether blockchain can change the digital advertising paradigm, but which blockchain will do it. Ethereum is a strong contender, as it the main smart contract platform. But literally hundreds of tokens and smart contracts are already implemented on the Ethereum network. Perhaps another blockchain will emerge that is focused solely on advertising, dedicating the network's full calculation power to advertising only.
Blockchain will change advertising; we just don't know which one will do it yet.
Author Nick Rojas combines 20 years of experience working with and consulting for small to medium business and a passion for journalism to help readers grow. He writes about technology, marketing, and social media for the aspiring entrepreneur. When Nick is not sharing his expertise, he can be found spending time at the beach with his dog Presto. @NickARojas
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