Since the dawn of the Internet, the advertising industry has faced disruptive forces on a scale and speed that has transformed the way the industry works. The halcyon days of Madison Avenue executives directing television adverts for a small number of channels that large segments of the population watched have given way to an increasingly atomised and disparate audiences that are harder than ever to reach.
A recent report in the Harvard Business Review cited advertising retention rates of approximately 90% in the 1990’s, have now dropped to 22%. Similarly audience sizes have dropped precipitously over the course of the last three decades. In the 1980s 70% of television sets would tune into the leading television show Dallas; in 2017 that number is 2%. Some 94% of online adverts are either blocked or skipped over. To sum up, the Internet has since the 1990s ensured advertisers have to work much harder to reach smaller audiences who are more likely to ignore their content and messages.
This proliferation of online news outlets and channels has led to a substantial growth in the number of online advertisements being posted by different sources. The legitimacy of these sources and veracity of content is an increasingly contentious issue and many people are beginning to question the online advertising business model. It’s a common misunderstanding that there’s a direct relationship between the company and the online advertising portal, the reality is far more complex and convoluted with companies either using advertising agencies, or platforms that use media buying platforms, data service providers, advertising exchanges and networks to place content. This chain is both opaque and inefficient for vendors and publishers, it is also vulnerable to fraudulent behaviour and untrustworthy sources posting false or suspicious content.
The existing online advertising model is clearly broken and susceptible to abuses of power, the proliferation of media channels and sources makes it all but impossible to monitor and regulate content posted by individuals and corporates. At Bitmedia.io we have for three years assisted a wide variety of blockchain companies advertise to relevant investor audiences. The business model has been based on Bitcoin payments by companies looking to raise funds with international investors and reach audiences irrespective of borders and other traditional market barriers. Through the use of algorithms we have successfully aided companies target their advertising for relevant outlets to reach the right audiences, delivering the best value for money given the budgets at hand.
As a model it has served us well – however given recent concerns about the use of false advertising and targeted messages, the need to improve it has become clear. Use of blockchain technology is one area the team at Bitmedia.io envisage transforming online advertising. The use of an open source distributed ledger (or blockchain) would enable users to confirm the trustworthiness and validity of those people participating, their backgrounds and interactions with others. Fake accounts or suspicious individuals without any background could be easily identified by publishers who could see which accounts are trusted and have numerous interactions with other members of any given blockchain.
The benefits go beyond mere transparency and accountability, important though they are; it would also ensure greater streamlining of the distribution process and enable a direct link between the advertiser (or its agency) and the publishing outlet. The role of media buying platforms, data service providers, advertising exchanges and networks, would be greatly reduced as vendors will be able to place content in news outlets directly and see the readership/viewership numbers.
Blockchain also has the potential to transform the monetisation of content. At Bitmedia.io we accept all payments for advertising content in Bitcoin, it’s easy and takes minutes to process payments from anywhere in the world. Foreign exchange fluctuations, bank transfer charges and overdraft fees are all eradicated with the use of digital currencies and add another dimension in how online advertising can be improved and modernised though the use of blockchain technology.
Recent events in the past month have cast a serious shadow on the world of online advertising and how vulnerable it is to nefarious forces and unfair manipulation. Blockchain technology provides a tried and tested alternative to the current distribution models for online advertisers, through the use of open source distributed ledger, vendors can engage with publishers directly and place content that viewers can see is legitimate and confirmed by fellow participants as a trustworthy source. The pace of technological change and disruption has been breakneck over the last two decades for the advertising industry and shows no sign of slowing down. For the industry to maintain its trust and credibility with the broader public it depends on, it will need to embrace blockchain technology and the transparency it provides.