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How could blockchain bridge the gap between advertisers and publishers?

(Image credit: Image Credit: Zapp2Photo / Shutterstock)

In today’s fast-changing and heavily automated advertising marketplace, it comes as no surprise that advertisers and publishers are now faced with an increasing amount of vendors and intermediaries at all stages of the ad campaign process.

This increasingly saturated trading environment is inevitably making it harder for companies to trade both directly and efficiently and has instilled a somewhat greater risk of both buyers and sellers incurring hidden costs when completing transactions. This issue has caused a widespread lack of transparency over exactly where budget is being spent and with whom, which is now leaving advertisers unsure of exactly where their ads are being delivered and publishers unclear about who it is they are trading with.

With global digital advertising spend now expected to soar by over 44 per cent to around $335.5 billion by 2020, the industry will undoubtedly continue to see a growing number of new entrants looking to capitalise on its rapid growth, making it ever more difficult for advertisers and publishers to connect directly with their counterparts to trade quickly and with clarity. 

Bridging the gap with blockchain

That said, there is clearly a huge prize still to be won for companies who are able to leverage ground-breaking technology to successfully navigate the digital advertising ecosystem and trade effectively with other parties in the supply chain. One such technology offering both advertisers and publishers an unprecedented solution to these challenges is blockchain.

Although blockchain technology is still yet to fully establish its presence across digital advertising, it is now offering both advertisers and publishers a way to tackle these inherent industry issues and enable secure trading with fast payment turnaround times. Should the sector continue to recognise its potential for improving the delivery of ads, blockchain has the power to transform the industry and better connect advertisers and publishers operating across the space.  

Providing transparency over ad spend

Concerns over a lack of transparency in ad expenditure have troubled the global advertising industry throughout its growth and continue to have a huge impact on the trading experiences of advertisers and publishers alike. Integrating blockchain technology can eliminate the risks over this lack of clarity on where advertiser’s budgets are being spent on which publishers and where their ads are being delivered at the end of the trading process. 

By providing advertisers with a permanent and full receipt of events, companies can ensure they are only incurring fair and accurate charges, which will lower the risk of hidden costs from intermediaries and enables tamper-proof accuracy for products moving throughout the supply chain. By leveraging the foundation on which the world’s most successful cryptocurrency is built, advertisers can create a more secure network, allowing them to transact with a higher degree of transparency and confidence on where their budget is being invested and where their campaigns will ultimately appear. 

In turn, this can help to solve the ongoing problem that 40 per cent of digital media spend disappears into the supply chain, rather than the media. Whilst media agencies haven’t always been at the forefront of technologies which provide open and auditable business practices and with blockchain technology coming into the market in quick succession, its growth in the space certainly feels like a step in the right direction for full visibility across the supply chain. 

Decreasing the risk of ad fraud

Ad fraud cost advertisers approximately $7.2 billion in 2016 and is evidently still a huge and endemic problem for our industry. Yet, in addition to improving transparency throughout the buying and selling processes, blockchain can also verify the validity of transactions and provide a perpetual record, working to help combat ad fraud and create a secure trading network for advertisers and publishers. 

Through the decentralised network that blockchain operates on, it is able to provide advertisers and publishers with an irreversible and permanent receipt of all transactions, leaving no gap for ad fraud within the increasingly automated advertising landscape. 

With the advertising industry expanding, an increasing number of vendors across the industry is only allowing the risk of hidden fees in the supply chain to grow. Blockchain can be the solution that the industry needs to combat these challenges and create visibility for vendors, to ensure that hidden costs are eliminated. With this, publishers and advertisers operating in the industry will have greater visibility over who they are trading with, allowing them to perform efficiently.

Improved payment turnaround times

Blockchain also has the power to replace traditional paper insertion orders with digital smart contracts which enables real-time payment processing, whilst enabling direct connections between advertisers and publishers and allowing real time payments to publishers and service providers. This significantly lowers any financial risks advertisers may face, whilst improving cash flow and creating stronger relationships between the buyers and sellers. 

Utilising the technology to facilitate instantaneous payment processing for all campaign stakeholders will allow companies to improve their financial and operational efficiencies. What’s more, its ability to provide immutable records of transactions, which can replace traditional methods with digital smart contracts, can help to decrease payment turnaround times even further and increase operational efficiency for traders.

Looking towards the future of blockchain, it is clear there is still some way to go before becoming mainstream within the digital ad ecosystem. It displays all the signs of a global solution for bridging the current distance between both buyers and sellers, not only in the advertising industry but for many other industries worldwide.

This revolutionary technology could be vital to restoring transparency throughout advertising. Not only will incite accountability among its participants but it also holds the power to provide an open source, transparent, decentralised and verifiable trading framework. 

Should blockchain continue to establish itself and become the ‘norm’ within digital advertising processes, I believe the future looks both bright and secure for all parties in the advertising space. 

Zheng Zhang, CEO and Co-Founder of EnvisionX
Image Credit: Zapp2Photo / Shutterstock

Zheng Zhang
Zheng Zhang co-founded ad-tech company EnvisionX in September 2014 to address the need for a next generation marketplace which connects buyers and sellers of global advertising products.