It's no secret that Facebook and Google maintain an advertising duopoly – it was reported that the pair accounted for 58.9 percent of digital advertising spending in 2017. Even though concerns about how personal data is handled by the companies are bringing that number down, they are still projected to hold the majority of spending, with 56.8 percent in 2018 and 55.6 percent in 2020, according to Nasdaq.
In using this digital promotional space, advertisers must follow Facebook's and Google's rules and regulations, including policies relating to data rights and ownership. Although there have been strides to protect user privacy – such as Facebook's privacy changes, which were prompted by Europe's new General Data Protection Regulation (GDPR) – the two tech giants still control most user data.
In addition to controlling data, the platforms lack transparency and complicate the advertising process. Advertisers turn over their content to Facebook and Google but do not necessarily have a say regarding how the ads will be posted, namely, where the ads will be displayed. Sometimes ads are even rejected.
Publishers have been looking into blockchain technology in search of a digital advertising solution. With the decentralized and distributed nature of blockchain, the digital advertising space could become a more democratic, transparent endeavor – without the need of an intermediary such as Facebook or Google. AT&T and Bayer announced they were experimenting with how their ad campaigns might be improved by blockchains in February.
One option is the Basic Attention Token (BAT), a project ETHNews reported on last year that is meant to pay viewers who watch ads from participating advertisers on the Brave browser. Publishers and advertisers, in theory, benefit by getting data from users, allowing them to create targeted ads and content. Users can donate tokens directly to publishers who create content they enjoy.
Another potential solution is Kind Ads, which hopes to remove advertising intermediaries and provide user-friendly ads through effective channels. The Kind Ads network will be decentralized and purports to give advertisers the ability to acquire subscriber access in a transparent, ethical way. Subscriber access is important for direct advertising campaigns targeted at specific groups across multiple publishers. Furthermore, the Kind Ads ecosystem will include a tokenized rewards pool to incentivize the sharing of personal data.
Additionally, AdEx is an Ethereum-based advertising network that wants "to disrupt and replace the traditional digital advertising models by providing a transparent, focused solution for advertisers to collaborate with ad publishers," according to the project's white paper. The platform will run EDCCs (aka smart contracts) to facilitate advertising bids, and the platform will keep a verifiable record of transactions to help prevent fraud.
Although advertisers are frustrated with the state of the digital advertising industry, blockchain may not be the best cure for their woes. Many blockchain platforms are still in the pre-ICO stage of development, meaning the technology can certainly fail or deliver lackluster results. Couple that with the volatility of token values and the reigning popularity of Facebook and Google, and results may fall flat.
In any case, projects such as BAT, Kind Ads, and AdEx are attempting to provide a fresh perspective when looking for long-term advertising solutions.
Note: ETHNews does not endorse investment in these or any other blockchain-related projects.