Blockchain Unlocking Advertisers’ Profit Potential

Whether collective hosts of a remote cloud storage platform or inhabitants of a player-owned VR world, blockchain users are stakeholders in their favorite applications rather than mere customers. Whereas the internet constructed inroads between disparate service providers and content hosts, encouraging more entrepreneurship and access, it also turns its participants into clients of the “internet establishment” by default. Blockchain, on the other hand, represents a network of paths skirting the toll booths installed by these entrenched entities, to achieve better autonomy and equality.

One of the biggest industries in the world, online advertising operates on these old toll roads exclusively. Companies like Google and Yahoo broke ground in the industry first and have benefited from the internet’s centralized infrastructure to institute themselves as middlemen between advertisers and publishers. The services they provide are convenient, but they’re built on a system that is opaque enough to hide some worrisome flaws. Blockchain represents a way out for participants in the status quo, and there are some very clever companies already using it to show these people what they’re missing.

Tipping the Scales Back

In online advertising’s current paradigm, there is an unavoidable conflict of interest that informs the results of any advertising campaign. Advertisers need to know how their ad is performing, yet all the tools they’re given to optimize campaigns are provided by middlemen who also act as platforms where publishers and advertisers connect. Google, for example, sells ad space and illustrates the performance of ads with their Analytics dashboard as well.

The thing is, Google Analytics puts an inordinate emphasis on key performance indicators that benefit Google more than the advertiser. True indicators of ad success are obscured in favor of KPIs like click-through rate, which isn’t necessarily a signal of ad efficacy but is close to the bottom line of Google itself.

Accordingly, advertisers waste money when they don’t have a transparent way to measure ad efficacy, and the unfortunate existence of bots only exacerbate the problem. These are robotic computers that artificially inflate results and give fake justification for high ad hosting costs. Google’s tools don’t separate fake engagement from real participation, and neither does it have any incentive to do so.

Publishers suffer the consequences of this system as much as advertisers. From small blogs to high-volume publications, those who host ads on their site aren’t given enough of the profits, because ad giants use their biased data and oligopoly to increase their own take.

Finally, users – the ones subjected to ads on their favorite website – often tolerate ads that are irrelevant to them and intrusive. They might also choose to ignore ads by abandoning the site permanently, thus harming other stakeholders. (See also: Twitter Suspending Accounts to Curb Crypto Scams.)

Blockchain Rolls Out the Red Carpet

Blockchain systems, on the other hand, offer a better deal. This infrastructure effectively cuts out middlemen who used to make their living matching publishers with advertisers by allowing advertisers to connect directly with relevant publishers. Publishers themselves can choose advertisers that more accurately match the content on their site.

On decentralized systems, authority is shared between network participants instead of being delegated to a single entity, which might otherwise use the responsibility to gain an advantage. Finally, the digital ledger provides an irrefutable record of how ads are performing, allowing advertisers to finally get a clearer, more granular, and less expensive analysis of their ad’s results. Though these capabilities are indeed impressive, it takes an expert touch to create a decentralized ad network to put them into practice, instead of on paper.

Kind Ads is a decentralized ad network that matches the best advertisers with appropriate publishers directly, eliminating platform fees for all participants. Its goal is to build stronger, more accountable connections between advertisers, publishers, consumers, and developers of decentralized apps (DApps) where ads might appear. With non-intrusive push notifications, easy opt-out tools, and multiple channels for advertisers to use, the KIND token will incentivize all contributors to engage with the ad ecosystem.

In the same way, BAT – Basic Attention Token – are looking to simplify the process of connecting ad buyers and sellers. The company’s token, and its integrated browser, let advertisers interact directly with publishers and get the information they need without sacrificing users’ privacy.

With BAT, the struggle is the necessity of their own browser to their platform, whereas Kind Ads are browser agnostic, as it is hard very to challenge Chrome, Fireox and Safari.

Platforms like these allow publishers to create content instead of messing with poorly-optimized ads, which helps users to get a better experience. It also helps advertisers, who no longer need to spend money on irrelevant ad space, exorbitant fees, or campaigns that bleed money due to misleading KPIs.

In eCommerce, the ledger will help consumers track the origins of the product they’ve purchased via ads, reducing fraud and the propagation of counterfeit goods. (See also: Google Bans Advertising Related To Cryptocurrency Products.)

Forfeiting the Keys to the Kingdom

There are other companies using blockchain to revolutionize the advertising industry as well. AdChain, for example, seeks to combat inefficiencies in the space differently. By incentivizing advertising campaign audits with its tokens, AdChain enforces the simple idea that advertisers should get what they pay for.

Additionally, performance and impression data is encrypted so that only those who paid for the data can use it to gain valuable insights. Many more ideas, and the blockchain companies behind them, are threatening the industry’s status quo as well.

With the Interactive Advertising Bureau throwing its weight behind blockchain, it’s only a matter of time before solutions like Kind Ads or AdChain become the new standard. Their best chance is simply to illustrate to advertisers that the new deal is head and shoulders above the status quo, in every way.

For businesses, it’s impossible to argue against lower overheads and a higher level of control. This idea is enough for blockchain to gain a foothold, which is all it needs to begin chipping away at the industry’s looming goliaths. (See also: PayPal Files Patent for Faster Cryptocurrency Payment System.)

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns cryptocurrencies.

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