Blockchain, AI, and Advertising: What’s Coming

Blockchain finally hit the advertising industry in 2017 when companies like Microsoft and IBM bet big on the transformative technology. As this technology revitalizes new markets for established players like Walmart and Oracle, other advertisers are taking notice.

In 2017, blockchain moved from the technology sphere to advertising as companies developed ways to verify and distribute ad data to media-buying parties. By the end of this year, blockchain and other distributed ledger technologies will need machine learning and artificial intelligence to integrate with the advertising industry.

Using these advanced technologies in the advertising industry will provide transparency when buying ads, improving trust within the ad supply chain and cutting out the “middleman.” Several companies built distributed ledger technology for the advertising industry in 2017, such as BitClave, Presearch.org, and Blockchain Programmatic Corp. (BPC). For content creators, NKOR created blockchain technology protecting against copyright infringement.

Speed is the biggest issue facing companies as they develop new uses for blockchain in the advertising industry. Initially, blockchain could read and record about 10,000 transactions per second, but companies are now creating technology that lies on top of blockchain to speed up transactions. For real-time bidding on blockchain to work more efficiently, it must be able to record at least 1 million transactions per second. BPC co-founder and CEO Pavel Cherkashin said in an earlier interview with MediaPost that the latest technology had reached that number.

As a result, expect more companies in 2018 to invest in distributed ledger technology. Beginning in 2012, little investment funding went to blockchain and bitcoin startups. In the past two years, according to MediaPost, investors pumped more than $500 million into blockchain and crypto markets. Companies focusing on media and advertising have secured digital records of copyrights and trademarks and token-based advertising models. One such company that focuses on changing how advertisers, consumers, and publishers interact online recently raised $36 million.

“How-To” videos are always one of the top searched videos on YouTube, and “How to buy bitcoins” ranked high in 2017 and is expected to grow in popularity. This increase shows how with an interest in this evolving technology, blockchain may well become the biggest game-changer since the advent of the Internet.

Digital advertising, as a whole, is a $223 billion global industry according to Forbes. If your digital advertising spend is significant enough, however, you could waste considerable sums on ads that do not involve real people. Forbes estimated that advertisers will waste $51 million per day in ad spend by 2018. Fraudulent advertising schemes are growing like weeds across mobile, social, and apps. Ad-bot scams and hacks to create fake traffic and clicks plague today’s industry.

Blockchain, on the other hand, works to decentralize the processing of data, verifying it, and permanently storing it. Once records and information are stored on a distributed ledger network, they cannot be erased or reversed. The virtual, verifiable, and decentralized system captures transactions or entries in their original format to preserve data authenticity. Think of it as taking the data’s picture that no one can ever alter or counterfeit. Thus, distributed ledger technology will, theoretically, eliminate the risk of fraud.

New technology is focusing on increasingly complex algorithms that can track and combat bots and click farms committing fraud in digital advertising. Do not let blockchain’s seemingly simple technology confuse you because the permanent and immutable storage of data stops hackers and fraudsters in their tracks. The time is ripe to disrupt the digital advertising space with positive change and innovation that will restructure the way businesses use advertising.

Is your marketing department ready to handle artificial intelligence, machine learning, and blockchain technologies? Contact us to learn more.