Bitcoin hit global headlines in recent weeks when it reached a peak of $5,856 per “coin” and thereby exceeding the price of gold.
All this fuss has been for something that has no physical entity; a currency that pays reverence to no sovereign state. Cryptocurrencies and the blockchain technology have the potential to be the most disruptive phenomenon since the Internet. Whereas many sees the upside of this, some governments are so fearful of the power of digital currencies that they have banned them. They justified this move by cryptocurrencies’ decentralized nature, and thus their ability to fly under the radar of national governments and their central banks.
Seeing they cannot put the Genie back in the bottle, the UK and US’ have sought to regulate digital currencies appropriately. This enabling approach to regulation has led to many startups using the technology in both the UK and US. Indeed, 56% of the world startups adopting this technology are based in either the US or UK.
So, Can Bitcoin save the ad industry?
It is the technology behind cryptocurrencies that offer the industry the most promise. Every bitcoin transaction is recorded in a virtual ledger known the blockchain. The ledger is maintained by a peer-to-peer community who collectively up keeps it. This activity means every transaction is transparent, accounted for, permanent, verified and traceable. It is these qualities that the ad industry aspires to possess. Through a combination of cryptography and blockchain, it is not possible to falsify, modify or delete entries in the ledger. Is plausible question if it was possible to apply the qualities of transparency, verifiably and accountability to the world of advertising. Why? It would go some way to reducing the $29 billion cost of global ad fraud.
When can the industry expect the coming of a blockchain savior?
No time soon, said Jack Smith, chief product officer for GroupM North America. “I don’t see any available solution that’s ready to be scaled with a significant number of transactions by 2019. I just haven’t seen it in the market.”
The problem is this: the speed with which the peer-to-peer community that updates the blockchain is too slow to keep up with programmatic advertising. Nonetheless, there are believers in the blockchain’s promise, and these have started their own marketplaces and side projects. One such example of this started earlier this year when, Los Angeles-based startup MetaX joint ventured with software firm ConsenSys to launch “adChain“. The curated whitelist of publishers and advertisers will use blockchain to vet sources of inventory with a democratized voting system. Marketing effectiveness professionals should watch this growing space.
By Dellistina James, Head of Business Development at MASS Analytics
November 2nd, 2017 (Updated 2020).