Digital Advertising is Broken
Digital advertising has grown rapidly over the past decade. With large networks like Facebook, Youtube, and Twitter providing targeted audiences for advertisers, brands have invested billions into this marketing method. Unfortunately, when an industry grows this rapidly, there are opportunities to manipulate the system.
Advertising technology has seen several innovations that are allowing brands to target their customers at previously unheard of levels of detail — yet, these innovations lack in the ability to identify real views or clicks from fraudulent ones.
At Plentix, we believe digital advertising as an industry is ripe for disruption. Not because there has been a lack of innovation, but because the innovations have focused on creating a better experience for brands and advertisers — while excluding consumers from the benefits. Additionally, the innovations in the space don’t account for the amount of technologies that have arisen in response to digital advertising innovations. These responsive technologies like ad-blockers often counter the benefits that have recently been created for brands. The lack of alignment between brands, advertising platforms, and consumers is exactly why we believe that blockchain technology can drastically improve this space. By creating an incentivized ecosystem where everyone involved benefits, a win-win solution is created where consumers are happy to consume ads, or even evangelize.
Brands need a way to engage with consumers and incentivize them to become engaged. A brand’s goal is to convert a user. Ad-blockers render media buys ineffective in driving online and offline conversions, and traditional digital advertising provides no benefit to the consumer. According to the Association of National Advertisers, $740 billion will be spent on brand activation marketing by 2020 (US Only). Despite the rise in marketing, brands don’t have a reliable mechanism to assess the return on investment of their campaigns. Digital advertising allows an abundance of metrics, but a lack of transparency — allowing fraud to run rampant in the form of fake views, inappropriate placements, and getting placed on “ghost sites”. Even influencer marketing has suffered. Influencers are forced to create content that brands will want to advertise on, that is, if they want to be successful. Their creativity is limited by their need for financial stability. By using Plentix, influencers can leverage their audience like never before — using the power of their network to exponentially grow the amount of people spreading a brands message.
On the other side of the equation, we have consumers. Consumers are often overlooked, considered only when determining the best way to target them. Evangelists are much more valuable than customers, to truly master digital advertising in todays landscape a system needs to exist that incentivizes consumers to interact with and promote brands.
To thrive in a world that lives on the internet, brands need to change the way they view digital advertising. Shoving a brand message down the throats of consumers in the form of annoying retargeting ads sometimes performs the opposite of the intended effect, it makes customers less likely to convert. The current ecosystem doesn’t allow the one metric that counts, Return on Investment, to be tracked accurately. Accurate tracking, and a true win-win situation, can only be realized via a trust-less, decentralized, and transparent blockchain platform. Blockchain technology keeps everyone honest, because trust is built-in.
Advertising Fraud
Fraud often manifests in the form of malicious software and human actions. However, much of it is executed by automated bots: powered by AI (Artificial Intelligence) and ML (Machine Learning). These bots are one of the lesser known intermediaries in the space, silently taking ransoms from brands.
Another manifestation of advertising fraud is content farms. When brands are offered access to large networks of websites at “too-good-to-be-true” prices, they typically are. Many modern ad networks are merely content farms; websites that publish low-quality articles at a high frequency — solely to work their way up search engine rankings. The large quantity of content drives traffic to the sites, giving the illusion of a focused audience — one of value to advertisers. Beyond simply pushing out content reminiscent of spam, fraudsters also use bots to illegitimately boost their traffic. Raising the value of their websites to brands.
To further understand the level of fraud in advertising, consider the following statistics:
• $7.2 billion: An estimated cost of ad fraud (ANA)
• More than 50% of all the online ads are never seen by the target consumers (Google)
• A paltry 8% of impressions have the opportunity to be seen by a real consumer (Mediapost)
• 20% of all domains were found to be “cash-out” sites or fraudulent (ANA and White Ops).
Intermediaries who largely control the flow of advertising dollars have little-to-no incentive to combat ad fraud. Digital marketers make the same revenue from fraudulent views as real views. If anything, they’re incentivized to ignore it. The more views, real or otherwise, translate to income when calculating cost per impression.
Widespread fraudulent activities deceive brands into believing their campaigns are effective because they have no legitimate tools to differentiate the real from the manipulated, and intermediaries aren’t incentivized to make them think any differently. Users on these platforms do not benefit in any way, and view the advertising as a nuisance; driving approximately 600 million internet users to install some form of ad-blocker.
Digital advertising has become a textbook example of a broken sector. Abundant with scams, dissatisfied customers, and commercialized creators.
Consider the role of newspapers and magazines in the early 1990s. When paper publications were the most common form of “content distributors” , they abused it.
• Content creators (writers) were beholden to the owners of the media houses and instructed on content rather than relevancy, often times being compensated a small commission not commensurate with their output.
• Advertisers were often charged high rates based on the fraudulent computation of figures.
• Consumers were fed biased stories driven by the revenue demands of newspaper owners shareholders.
It would seem that we’ve never used an advertising model that truly benefitted everyone involved. TV, Radio, Print: they all focused on providing more benefit to the brand, not because they’re evil, but because that’s how they make their living. This misalignment between brands, consumers, and content creators/publications that are used to spread a brands message- creates an opportunity.
An opportunity to remove the opacity currently existent in digital advertising, and replace it with a referral community where brands can directly track ROI, consumers are rewarded for their engagement, and creators can leverage their networks without compromising their creativity.
An opportunity that we don’t plan to miss.
Stay connected, friends.
Yashar Toopchi, CEO
