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Blockchain in Advertising Mends the Weakest Link: Secure Data Sharing

September 14th, 2017   ||    by Monta Monaco Hernon   ||    No Comments

Technology has made possible the collection of consumer data on a scale that was unimaginable in the not-so-distant past. Meanwhile, other advances have opened the path for targeted advertising, leaving buyers giddy over the idea they can reach the consumers most interested in buying a specific product. But it’s a third concept that could provide the link between the two—and bridge the gap to advertising nirvana: blockchain in advertising.

From Whence the Need?

Why is this connection needed? Whether or not the capability to send ads directly to a specific group of customers—and even sometimes, to an individual household—is truly useful depends on the thoroughness of the available information. For targeting to be as precise as possible, datasets from different sources need to be combined. But this brings with it proprietary concerns and consumer privacy issues.

More specifically, data sharing has been inhibited somewhat by companies on both the buy and sell side not wanting to give away resources they could monetize or utilize themselves, possibly to a competitive advantage. And from a privacy standpoint, by giving away or selling data, a company loses control over security and could face repercussions from disgruntled consumers. This means the power of data remains in the hands of the few, rather than benefiting the advertising ecosystem as a whole.

Blockchain Blocks the Middlemen

Enter blockchain technology. Essentially, queries are made of a distributed network of computers without a central controlling authority. The answers to the queries come in the form of algorithms, which are used to make necessary computations. One of the first applications of blockchain in advertising was devised by BitTeaser—a digital currency like Bitcoin is used to place ads, eliminating the need for a middleman. While programmatic technology takes away insertion orders and haggling, blockchain in advertising further increases efficiency by getting rid of invoices and speeding up the transfer of funds.

From a data perspective, blockchain does not require a giant central storage system. Each participant in the chain maintains control of data in its own system. The encryption and rights management components of blockchain are part of what allows users to ask marketing questions of the system and receive actionable results without having to control all the required data, as Comcast explains. This protects consumer privacy.

In other words, a company that sells breakfast cereal can request information about where to target its advertising. The most precise answer would come by pooling information from different sources. Blockchain in advertising allows the company to do this without having to take ownership of the data itself. A reporting mechanism then allows users to share information about how effective the ad placement was. These results, in turn, are added to the datasets.

Run With the Big Dogs

Comcast, which is developing its Blockchain Insights Platform with Cox Communications, NBCUniversal, AlticeUSA, Channel 4, Mediaset Italia, and TF1 Group, says the technology holds the potential to improve the planning, targeting, execution, and measurement of advertising across screens.

The fact that so many big companies are involved and that they’re looking for more to participate bodes well for blockchain in advertising. The secure transmission of nonpersonal audience insights would serve to further the industry along the path to addressable advertising and augment the benefits programmatic already provides.

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