Opinion

Is blockchain the answer to marketing’s transparency crisis?

It may only be in its infancy, but the seeds are now being sown for blockchain to provide a more transparent and independent alternative to contemporary ad exchange platforms, argues Bluzelle's Pavel Bains

Last month, a story broke across major news outlets that Facebook was inflating the numbers of people its advertising platform could reach.  

The report, from the ever-vocal analyst Brian Wieser, noted that the social media behemoth professed its platform could reach millions more of young American adults than what was estimated by official sources – namely, that ads geared towards adults aged 18-24 could reach around 41 million people.

A bold claim, considering that the country’s Census Bureau estimated the number to be significantly lower by nearly 25 percent.  

Of course, Facebook defended itself by saying their metrics were fundamentally based on location data – i.e. including non-residents who might just be tourists. But that statement does little to ease concerns faced by its marketer-based clients – of whom we cannot assume all to be fully versed on how the metrics are set – particularly as Facebook also recently admitted to fudging up their metrics leading to its customers to be billed incorrectly.

So, what can marketers do to guard themselves against the lack of transparency being touted by even the largest ads exchange platforms? How can we trust advertisers knowing that the audience reached by our ads are possibly nothing more than bots?

Blockchain: the answer?

Better known for powering cryptocurrencies such as Bitcoin and Ether, blockchain is a digital ledger of economic transactions that can be programmed to record virtually any asset of value, not just financial transactions.

It records all transactions between parties involved in a manner that is easily verifiable and secure through cryptography, ensuring that records stay permanent and transparent.

Although it has initiated major effects in areas such as finance and corporate governance, the blockchain’s disruptive potential in the marketing and advertising industries is still nascent. But the potential is there, if we know how to apply the tech correctly.

Can the blockchain act as a potential safeguard against ad fraud?

Using a system comprising a continuously growing list of records known as ‘blocks’ – hence its name – which are linked to previous blocks via a timestamp and recorded transaction data, information contained in a block exists in a shared database that needs to be continuously reconciled through a peer-to-peer network. When a new block is created, the information contained within previous ones cannot be altered without the consensus of all those involved.

The decentralised nature of the blockchain’s construction – being hosted by multiple computers simultaneously – means that information will not be stored in a single-location database. This way, records of transactions are made more transparent and are more easily verifiable. Particularly for marketing, the blockchain could potentially give you greater visibility of where your marketing ad expenditure is really going.

For instance, by connecting a blockchain solution to an ad exchange, the marketer can see with absolute truth how many people clicked on an ad, where in a video did the person stop watching and whether they saw the pre-roll. The ad exchange which first implements a blockchain solution will no doubt provide greater value to their existing customers and attract new ones.

What about the bots?

While the blockchain can increase the transparency between marketing expenditure and bottom line, we must acknowledge that there are limitations to what it can do. Concerning bots, the blockchain alone may increase visibility but it won’t be able to stop bots from populating the number of views on your ad.

The only way to solve this is to introduce deep-learning and machine-learning algorithms to analyse the transactions being registered on your ad. Unusual behavioural patterns can then be identified as potential bots and blocked from being captured as legitimate views.

Meanwhile, to know if blockchain is actually going to make a difference to your company, it’s worth asking yourself a few questions. Namely, are multiple parties sharing data? Do these asset ownerships need to be tracked? Will adding Intermediaries add cost and complexity? Do the transaction interactions depend on each other?

The blockchain’s transformative and disruptive potential is ready for the taking, although it will take some time for it to be holistically implemented within the marketing space. Slowly but surely, the seeds are being sown for a new order that provides a more transparent and independent alternative to contemporary ad exchange platforms.

Pavel Bains is the chief executive officer and and co-founder of Singapore-based start-up Bluzelle

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