Blockchain has created a lot of excitement for the marketing industry. Advertising has evolved to meet the needs of today’s internet age, but like any other industry it has experienced its fair share of hurdles. Blockchain, as the incorruptible digital ledger of transactions, could be the answer to many such hurdles. Let’s find out more.

Problems Plaguing the Digital Advertising Industry

Lack of transparency is certainly high on the list of problems. Recently, a study revealed that 79% of advertisers consider non-transparency to be the biggest concern in the programmatic advertising space. One-third of these participants blamed third-party technology parties for the lack of visibility in spending.

Programmatic advertising, although much more efficient than manual ad buying, includes the presence of middlemen. Third-parties within the process chain can lead to cost inefficiencies for all parties involves including content publishers.

Speaking of publishers, the current setup of the advertising space is creating financial instabilities for them. They manage to get payment only after a few months; the average being 60 days. Then there’s the issue of ad fraud. According to a 2015 report by IAB and E&Y, the cost of ad fraud, along with infringed content and mal-advertising, was $8.2 billion, annually. All these problems have provided blockchain with the perfect opportunity to disrupt the industry.

Role of Blockchain in Programmatic Advertising

Let’s take a closer look at ad fraud. Blockchain will be able to increase visibility of the spend distribution and prevent funds from getting into the hands of bad players. It will be able to reduce the instances of domain spoofing.

When every design gets recorded in a decentralised ledger, advertisers will be able to verify whether a particular concept has been used before for some other company. There will be less chance of seeing any unauthorised and hidden fees too.

Programmatic advertising generates a large number of queries per second (QPS). Whenever a particular URL gets loaded, it generates multiple ad impressions. A URL with six ads will give rise to six unique ad impressions, each of them having their own queries. That means a minimum of six queries. Middlemen tend to inflate these queries by allowing more calls than needed.

Through the use of blockchain technology, every query could be recorded on the ledger, which will leave no scope for misuse. This will reduce the problem of payment delays for the publishers. Without the middlemen taking away a significant portion of the ad expenditure, the payment speed issue will be less challenging.

Challenges to Blockchain Adoption

It all sounds very lucrative but obviously there are some issues to consider here. When so many transactions and records are included on the ledger, it will become hundreds of gigabytes in size. When that happens, things could get slower. There could be waiting periods every time a transaction has to be conducted. Blockchain is already blamed for being an energy-hungry technology, and that aspect will continue to magnify under these scalability issues.

But much work is being done to counter this problem. Vitalik Buterin – the co-founder of Ethereum – spoke to a crowd, at the recently held OmiseGO AMA session, about how second-layer solutions like Sharding and Plasma will help the Ethereum network achieve a speed of 1 million transaction per second (TPS), which could even reach 100 million TPS. Similarly, Ternio has built Lexicon, a blockchain solution that reportedly has the ability to deliver 1.2 million TPS.

All this will hopefully lead to a revolutionary change in the programmatic advertising space.

The importance of blockchain technology is turning out to be immeasurable in many sectors. From healthcare and gaming to real-estate and insurance, a blockchain solution is being developed.