There’s no shortage of companies wanting to bring blockchain to bear on marketing and advertising. According to Never Stop Marketing, a marketing firm, there were 22 companies in this space as of September 2017. In early 2018, there were 88. Now? There are 290. That’s a thirteen-fold increase in just 18 months.
This growth points to the fact that many within the advertising and marketing community, including consumers, publishers, and advertisers, are frustrated with how the industry is functioning today, says Donny Dvorin, who co-authored the report.
“Blockchain is not some pixie dust you put on everything and all of your marketing problems just go away right,” says Dvorin. “But as I talked to market vendors using blockchain, a lot of them said they took a hard look at the different technologies out there to improve their work, from supply chain transparency to rewarding consumers, and found that blockchain technology is the best tool to do that.”
Fraud is the top issue facing online marketers, says Dvorin. Take domain spoofing. An entity will pretend to be a premium publisher such as the Financial Times, create a fake domain and webpage, which is then served to advertisers looking to buy ad space, and since it’s a “premium” publisher ostensibly, advertisers will pay higher prices for it.
But instead of those ads being shown on the Financial Times, they’ll be shown to bots on a low-quality webpage. White Ops, a cybersecurity company, recently published a report on Methbot, a domain spoofing bot farm they believe to be the most profitable ad fraud operation in history. Methbot spoofed 250,267 distinct URLs and was taking in three to five million dollars a day as a result, according to the report.
Publishers, like the FT or New York Times, then miss out on that ad revenue. Meanwhile, consumers’ data is vacuumed up, as more and more advertisers want to make sure they’re getting ads in front of the right eyes. Nobody wins and everyone is screwed.
But blockchain-based companies entering the advertising space such as Rebel AI are using blockchain to create a unique, immutable identity for every publisher, and in the process, eliminating domain spoofing while creating the wallets that will facilitate the future of media trading.
Other examples include LBRY, a new protocol that allows anyone to build apps that interact with digital content on the LBRY network. Apps built on LBRY enable content creators to publish their work to the LBRY network of hosts and then set a price per stream or download or give it away for free. That’s different from say Spotify, which only pays about $0.006 to $0.0084 per stream to the holder of music rights, which is then split between the record label, producers, artists, and songwriters, according to CNBC. Unlike these platforms, LBRY doesn’t take a massive cut out of your earnings, allowing creators to market directly to people, rather than going through a massive middleman that thrives on selling peoples data (looking at you, Google).
"They're legit. They see a serious problem and they want to fix it."
Another example is Momentum, which rewards users for interacting with brands on their platform and allows movement of these reward points between brands. Think of it as SkyMiles that you can use to pay for a meal at a restaurant, or buy a suit at Macy’s. Momentum shows what companies you’re sharing your data with, and allows you to stop sharing when you choose.
“Why isn’t the consumer getting rewarded for their attention,” asks Dvorin. “They are the ones viewing ads. [Blockchain technology offers] a way to give 70 percent of the dollars spent back to the consumer in the form of a cryptocurrency like the Basic Attention Token, a project from Brave, who can then reward sites they like, rather than all these middlemen.”
Following scandals like Cambridge Analytica, consumers are becoming more aware of the way their personal data is gathered, sold, and resold by third parties to companies to better target ads. Facebook as perhaps the most prominent example. According to Honest Data, a market research firm, 32 percent of Americans believe Facebook is having a “negative impact on society”, the highest percentage of any tech company. For comparison, only 7 percent of Americans see Google in the same light.
The rapid growth in blockchain-based advertising and marketing technologies shows a willingness to scrutinize today’s advertising models and propose alternatives that aren’t as exploitative. “They see there’s a problem with content marketing, influencer marketing, email marketing and SEO,” says Dvorin. “There’s a better way and blockchain is one of the solutions. Sure, [some companies] are just jumping on the blockchain bandwagon. But the ones I’m talking to have already built sales teams that are talking to ad agencies and marketers. They’re legit. They see a serious problem and they want to fix it.”