Existing market condition — Need for change in digital advertising
Let’s have a look at the current market conditions in the digital advertising space:
Overview of Existing Online Market
What is the Current Online Market Structure?
The most popular structure of the online marketing involves three parties:
● Ad network
A publisher integrates advertisements into his online content. He gets paid for selling ad space or for showcasing the content of the advertiser on his own website/app along with his own content.
An advertiser is the one who provides the advertisements to be displayed alongside the publisher’s content via an ad network.
An advertising network helps generate and place the ad copy, delivers the ad and tracks the statistics.
However, the involvement of a third party, i.e., an ad network is optional, and the publisher can opt to manage to publish the advertisement, which is to be displayed along with his content himself.
What Is The Reason for Popularity of Ad Networks?
The popularity of ad networks in digital display advertising platforms is because of the following reasons:
● The ad network acts as a middleman and verifies the credibility of the publisher and advertiser for one another.
● It is responsible for the payment collection from the advertiser. Even in case of a default from the advertiser, the publisher is entitled to the payment from the ad network.
● It verifies the content and ensures that a right advertisement is displayed at the right place and to the right person.
● It has a broader reach to the potential customers for a publisher as compared to the reach of the publisher himself. This helps the ad network to fetch a better deal.
What are the Issues With The Existing Market Structure?
● Commission: The advertising network charges a very handsome commission to the publishers for providing these middlemen services. Did you know? The most popular advertising network, Google, charges a commission of 32% for online content marketing, whereas Facebook charges whooping 45% commission. Along with the high commission, the ad networks place some pricing restrictions.
● Direct Communication: Due to the presence of a middleman, there is no direct communication between a publisher and an advertiser, and hence they cannot negotiate with each other for the desired price.
● Choose Advertiser: Some of the ad networks give the option to select the type or category of the advertisement that a publisher wants to be displayed on his website. However, one cannot choose the advertiser he desires. An advertising network is solely responsible for the selection of an appropriate advertiser and advertising for the publisher’s ad space.
● Payment: An advertiser pays the fee to the ad network, which after cutting its commission passes it on to the publisher. Often, there is no payment flexibility to the advertiser. Also, there is a minimum withdrawal limit for the publishers, due to which, he cannot withdraw the funds instantly.
All of the above points can put high-quality creators at a financial disadvantage and favor publishers of cheap media: fake news, propaganda and conspiracy theories, quickly re-written stories with sensationalistic spin, shady offshore content farms, algorithmically generated content, and pirated videos. Hence, we at AdSigma try to address the above issues and remodel the advertising space in favor of the advertisers and publishers through our blockchain-based platform.