The excitement around blockchain for advertising is only beginning, but it is already among the four trends that leading research firm Gartner believes have the power to transform marketing technology.
Blockchain is the newest of the 28 technologies on the 2019 Gartner Hype Cycle for Digital Marketing and Advertising, with innovation just beginning to trigger expectations. But it is already among the most promising, the company said, putting it alongside AI for marketing, customer data platforms, and real-time marketing.
While “significant challenges with scalability, performance and adoption must be overcome before blockchain can alter the status quo,” Gartner said in an August 29 release, “Blockchain for advertising holds tremendous promise for marketers.”
Gartner pointed out that advertisers will lose $5.8 billion to fraud this year, according to an estimate by the Association of National Advertisers and cybersecurity firm White Ops.
“Blockchain-based ads could eliminate fraud and substantially streamline the ad industry,” said Kasey Panetta, a Gartner brand content manager, in an August 29 post about the Hype Cycle report. “But marketers beware—some blockchain solutions might expose new vulnerabilities to large-scale exploits.”
Warning that the existing blockchain solutions are “mostly speculative,” Panetta cited privacy and lack of transparency as areas of opportunity for marketers to investigate. Registering of consumer consent for the use of their personal data—vital under the E.U.’s harsh new GDPR rules—is one application with great potential, she added.
Independently verifying ad impressions and conversions are other uses, said Panetta. So is verification of content and the goods advertised, “reducing the threat of association with fake news, counterfeit products and ads promoting them,” she said.
“Maintain a healthy skepticism about claims for blockchain’s applicability for large-scale, low-latency implementations,” Panetta advised. “[B]ut don’t let it blind you to the technology’s potential for securing and decentralizing ad markets.”
Another possible use of the technology is breaking down “barriers to open competition within the advertising supply chain,” said Panetta. “A decentralized ad option would level the playing field for marketers and enable smaller organizations to compete with digital giants.”
Which isn’t to say that the giants aren’t looking seriously at uses of blockchain in advertising.
Gartner said none of the blockchain platforms for advertising has “been able to demonstrate ongoing viability” as of yet, in its release. But, the firm added, “the technology is gaining momentum through support from organizations such as the Interactive Advertising Bureau (IAB) and emerging innovations from technology companies such as IBM, Comcast, and Amazon, which are working with industry leaders on the buy and sell side of media.”
The research firm remarked, “[d]isruptive challengers from outside the industry are also adding urgency.”
On July 16, Nestlé, McDonalds, and Virgin Media became the first three participants in a pilot project looking at ways blockchain and distributed ledger technology (DLT) can address “the trust, transparency, and inefficiency problems the digital advertising industry is facing,” in tracking its advertising spending, according to Jicwebs, a U.K. industry organization.
“This technology offers us the opportunity to see a truly transparent picture of our investment across the digital supply chain,” said Kat Howcroft, Senior Media and Budget Manager, McDonald’s UK&I, in that release. “We are also eager to understand the potential impact that this may have on our ROI and efficiency.”
And Amazon in early August posted a job listing for a blockchain engineer to work with its advertising FinTech team “on a Blockchain ledger, billing and reconciliation systems to provide data transparency on transnational financial data,” according to media reports.
The full Hype Cycle for Digital Marketing and Advertising 2019 report requires a Gartner account. On July 11, Gartner produced a Hype Cycle research report focused exclusively blockchain.