Concerns over a lack of transparency in spend have long plagued the global digital advertising industry. For the advertising industry, this is where blockchain technology can really help to secure exchange of digital assets to solve these very issues: lack of transparency and murky reconciliation. In a blockchain, once a transaction is validated through a consensus process, it’s instantly committed to all ledgers in the network. These ledgers are databases that store the information recorded from a transaction. When it comes to transformation, blockchain technology can have such an effect on the advertising industry. At the IBM booth in this year's NABSHOW, IBM is promoting it's solutions in using blockchain technology.
The procurement of media or "media buy" is in need of an update. Due to digital transformation the ecosystem in advertising has changed. Lack of quality control, security and financial transparency between the many parties involved can become a problem. What blockchain can provide is a solution built on trust that addresses the problems fraud can bring to this ecosystem. By design, a blockchain solution prevents data from being altered retroactively, ensuring the verifiability and integrity of transactions. This can also guarantee accuracy and prevention of any sort of data manipulation. According to IBM "Blockchain will not only ensure trust and transparency, it can help advertisers of all sizes reduce transaction costs, increase efficiency, simplify contracts and improve invoice processing."
One of the world's largest consumer goods advertiser, Unilever, is teaming up with IBM on a blockchain project for the ad industry. One of their aims is to provide transparency for advertisers. This means that companies can disclose reliable information about their business footprint. This can also prevent any fraudulent practices since the transactions are recorded publicly and can be disclosed to ensure that ads were properly sourced. Since advertising has become digital and highly automated, it has become easier to post ads by just about anyone without any requirement for trust. It is the lack of visibility on third parties that is an industry concern. It is due to these problems that ad agencies want a solution that works to address global ad fraud, gives companies full control over their ad spend, and police programmatic algorithms to ensure that budget isn’t wasted and ads are being seen by the right people. In the first phase of the program, the main goal is to identify and correct issues of reconciliation by providing a unified view of audience delivery. By using smart contracts that validate the agreed figures, discrepancies are cleared right away versus trying to clear weeks or months after as is the case for many media buys.
It becomes clear that with tighter competition and shrinking budgets, getting the most out of budget for quality and validity in advertising becomes important. Avoiding fiascos like what happened with Facebook advertisers, who manipulated the network behind a facade of what appeared to be legitimate operations is something that the advertising agency can address with more transparency using blockchains. It allows both buyers and sellers to know who exactly it is they are doing business with. That can reduce fraud, which is the layer of spend transparency needed by the advertising industry.