In a highly competitive and rapidly digitizing business ecosystem, advertising plays a major role in a brand’s success. So much so, that according to MarketingDive, global ad spending was expected to grow at 5%, reaching $600 billion by the end of 2019, nearly half of which was to come from digital ads.
Apart from the direct use of technology, the boom in social media has significantly contributed to this growth. After all, advertisement is all about getting a brand in front of people: the more targeted, the better. With an expected 3.43 billion global user base by 2023, social media platforms are some of the best resources to do so.
But despite rapid growth and rising importance, there are dark sides to traditional models of advertising.
The Pitfalls of Traditional Advertising
According to Juniper Research, by 2020 marketers around the world could be losing around $44 billion to ad frauds — by far, the biggest problem with traditional advertising. This is largely due to the fact that the industry is highly centralized and opaque.
Advertising agencies often act as intermediaries between advertisers and their audiences. Often, advertisers have to pay a hefty initial fee and a monthly subscription for running their advertisements. The advertiser has very little to no control over where their ads are placed or who clicks on them. Consequently, they bear the cost of the agency’s ineffective placement, while the overall advertising cost also ends up being significantly high.
While social media is a major space for running ad campaigns, traditional methods do not encourage the platforms’ users to participate. The end-users of social media are seen merely as consumers and not contributors. To a great extent, this limits the scope of ad campaigns on platforms that mostly run on user-generated content.
The Promise of Decentralized Advertising
Most of the shortcomings of traditional advertising are due to the industry’s centralized nature. In this context, Distributed Ledger Technology, especially blockchain, enables a more user-centric approach to advertising.
In blockchain advertising, advertisers can directly interact with end-users who, in turn, can contribute and monetize content and efforts towards an ad campaign. Before trying to understand this better with an example, let’s briefly outline the main benefits of using blockchain for advertising.
First, the elimination of intermediaries results in reduced costs. Usually, a major share of ad spending pays for the fee and other charges of the intermediaries. By using blockchain, advertisers don’t need to rank high on Google, alleviating the vicious cycle of having to consistently invest time and money into ranking high on Google search. In turn, this also significantly widens the scope as advertisers are no more dependent solely on certain agencies or oligarchies.
Second, with blockchain’s inherent transparency and security features (such as smart contracts), it’s possible to reinstate the consumer’s trust in advertising. Most importantly, this makes ad fraud virtually impossible, while making the industry more accountable as a whole.
Third, in blockchain advertising, consumers have complete control over the data that they share with advertisers. Further, blockchain technology ensures that advertisers cannot use this data in any other way than what has been previously agreed upon.
A Perfect Blockchain Advertising Case Study: The SaTT Platform
The SaTT solution was developed by Atayen, Inc and is an Ethereum-based platform that uses smart contracts and an ERC20 token to facilitate advertisements transactions. Apart from safe, instant, and automated transactions, the decentralized platform employs robust applications to transparently quantify campaign results.
Using this incentivized platform, advertisers can launch campaigns in which other users can participate by sharing related content on their social networks. In return, they are rewarded with pre-determined SaTT tokens, which are based on several KPIs such as views, likes, and shares.
All users on the application are eligible to apply to promote a product or service they like and get rewarded in SaTT tokens and play the role of an influencer.
As companies are very attentive to their most engaged followers on social networks, SaTT is positioning itself as a revolutionary solution to reward them and considerably increase a company’s exposure on social networks, without depending on a centralized entity.
Centralization, opacity, and high costs are some of the major problems with traditional advertising. Also, there’s a serious lack of user participation. Using blockchain technology, innovative startups are coming up with innovative solutions to these problems, ultimately helping revolutionize advertising.
As any user with a substantial social network following can create and monetize content for ad campaigns, these blockchain-based platforms also enable a paradigm shift in influencer marketing.
Disclaimer: Please consult your financial advisor before investing in any cryptocurrencies as they are volatile and pose risks for the average investor. This post is informational in nature and does not constitute financial advice. The writer of this article does not hold and has never held any position in SaTT.
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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