On The CMO Agenda — A Technology Of Trust: Overcoming Complexity In Digital Advertising With Blockchain

By Aqilliz  

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On the cmo agenda

Valued at roughly US$350 billion in 2020, the global market for digital advertising and marketing is expected to reach US$786.2 billion by 2026. The meteoric growth of digital advertising has brought even greater complexity to the system. With so many participants involved in the entire process — from getting an ad from the marketer to the publisher to a consumer, then returning the data back to marketers — each point where data flows between each participant in the supply chain can be a potential point of weakness, where fraud or error could cause the flow to fail. This makes it difficult, almost impossible, to accurately measure the impact of an ad.

Furthermore, one or more of the ecosystem participants may not be following best practices when it comes to data governance, potentially leaving sensitive data open to theft or misuse. To address the trust-related issues that currently plague the digital advertising ecosystem, blockchain could introduce automation and decentralisation in the supply chain.

Change and complexity

As the digital world continues to change and evolve, it’s never been more apparent that marketers will need to look for new ways to engage their consumers one-on-one. Targeting and measurement strategies that the industry has grown so familiar with will need to be rebuilt for a privacy-first world. After the obsolescence of cookies and other identifiers used for ad tracking actually happens, we can expect measurement to grow even more disjointed. With attribution models upended, understanding true marketing ROI will become much harder for CMOs.

The central principle for navigating this shifting landscape is for the industry to understand and address the impacts created by the loss of ad-tracking capabilities, and what this would mean for brands going forward. With the rise of data privacy regulations and the ever-evolving programmatic marketplace today, companies without a plan to address these changes are unlikely to meet the needs of their core stakeholders, which includes leadership, investors and consumers. In contrast, organisations that proactively address the challenges of identity resolution and the increased emphasis on consumer data privacy will be much better-positioned to protect their relevance and growth in the long term.

The trust in trustless

As a distributed ledger which can immutably store data and be securely shared across networks and users, blockchain has the ability to record every reconciled transaction that has taken place. Only individual participants who have permission can access these verified, tamper-proof records. Due to its structure, the data contained within these decentralised ledgers cannot be altered without causing significant and immediately apparent changes to the blockchain, making it markedly more difficult for any party to manipulate the information. More importantly, the shared and open-source nature of blockchain means that every stakeholder would have a copy of the record, ensuring greater accountability.

In addition, blockchain can also easily host smart contracts, which orchestrate and automate many common transactions. By employing smart contracts in the process of tracking and reconciling their ad campaigns, CMOs can ensure that only impressions that have been verified according to parameters encoded in the contract are being paid for. Subsequently, payments can then be automatically disbursed to relevant parties based on factors such as when and where an ad was shown, who viewed the ad, and whether it has been interacted with. Transparent where it’s needed and hidden by cryptography where it’s not, the data flows and transactions on blockchain are secure, automated, and highly trustworthy for every party in the programmatic supply chain.

Collaboration is key

In order for blockchain to fully deliver on its potential, it needs to be implemented across the entire digital advertising ecosystem. This means that the industry will have to find a way to work across its divides to settle on the most fitting methods for measuring and verifying digital identities and impressions. However, industry leaders might have different appetites when it comes to collaboration. For instance, some may be eager to collaborate on data privacy and brand safety as these are issues that can impact everyone in the ecosystem, while others may take a more passive approach, reacting to legislation and new industry standards as they happen rather than proactively collaborating to help shape them.

The recent proliferation of new regulation and antitrust investigations has created an uncertain landscape for the digital advertising ecosystem, as regulatory requirements continue to evolve and the power of large platform companies comes under increased scrutiny. Amid heightened distrust and expanding regulatory oversight, collaboration between all stakeholders and parties within the advertising ecosystem is now more crucial than ever. As the industry balances ongoing push and pull of data trust between consumers and brands, CMOs should prioritise partners who can support the adoption of blockchain-based solutions without operating in walled gardens. Beyond trust between brands and the consumer, industry participants must also trust each other enough to join forces and build a privacy-first internet — once this happens, the pain points of complexity and fragmentation may just become a distant memory.

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