We talk about the potential of the blockchain all the time. Sometimes it feels like the only thing we talk about.
In order to move beyond a discussion of what could be, we have to identify the conditions that will determine success or failure. There has to be some level of consensus among advertisers before widespread blockchain adoption happens. The largest players must want to bring blockchain-enabled transparency to their businesses. And many of them don’t want to.
The current lack of clarity in advertising allows higher costs without justifying them. Blurriness is a major benefit for those operating in the shadows, who charge what they please for ad space with little or no accountability. Blockchain represents the chance to bring everything into the light. It could power a more transparent ad sales and tracking environment.
This opposition to transparency is a big hurdle to blockchain adoption.
There are also questions about the scalability of this technology for advertising purposes. If growth of individual blockchains comes at the cost of transaction speed, users will reject the idea outright.
Then there’s the largely unanswered question of how to deal with the two strongest forces in digital advertising: Facebook and Google.
Each of these factors will determine whether blockchain will thrive or fizzle out as the future of advertising takes shape.
Here are the challenges experts see slowing blockchain adoption.
1. Chris Richmond, CEO and Co-founder of Proper Media
“I can see quite a few challenges for it to gain real adoption. Probably the biggest in my opinion is that to get a real solution we’ll need everyone to participate and the industry has so many players involved to deliver ads from an advertiser to a website it’s hard to see an easy path to get there. Other challenges that I’m curious to see how they are solved is being able to handle the large amount of requests per second, storing the large amount of data and having it summarized quickly. We are just one small adtech player and our platform generates thousands of requests per second and that’s only for storing the winning bid of an impression. If we open up to storing all bids we’d see tens of thousands of requests per second.”
2. Jon Gillham, CEO of AdBank
“Disrupting the big players. There are lots of startups building blockchain based advertising networks and technology. It will be interesting to see how it plays out: advertisers are opening their eyes and seeing how much money they're wasting on bot traffic and they want a solution to ad fraud more than anyone. The thing is, advertisers have the power if they choose with their ad budgets. Will they go with a new startup that disrupts the entire industry, or will they force the big names to adopt blockchain and disrupt themselves?”
3. Ian Kane, COO and Co-founder of Ternio
“Education. Many marketing professionals get hung up on sensationalized headlines about cryptocurrency and don’t understand the difference between a currency and blockchain technology. In addition, blockchain philosophically institutes a different approach from the centralized systems used in digital advertising today. Marketing professionals are typically open to testing blockchain and understanding how it can improve their business process. The proof always comes in demonstrating the technology.”
4. Ari Paparo, CEO of Beeswax
“Two things: scale and participation. The scale of digital advertising is enormous. But also, since Google and Facebook are such a large part of the ecosystem, if they choose to not participate in a given blockchain-related technology it will never become a standard.”
5. Jeff Koyen, Founder of Pressland
“Blockchain has yet to connect its technological promises to real-world benefits. For example, yes, distributed and decentralized ledgers are immutable and hack-proof, but how does this translate into practical metrics the industry needs? Yes, it’s technically possible to eliminate click fraud and other abuses, but are blockchain networks fast enough to perform on mobile devices?”
6. Ted Sahlstrom, CMO and Co-founder of Match2One.com
“The main challenge in bringing blockchain adoption into the advertising system, is to get all the major players (namely the ad exchanges) to agree on a standard. This is a huge challenge mainly because those players are very big companies who have a lot to gain on the lack of transparency, by being able to add margins without advertisers and publishers knowing.”
7. Amy Fox, Product Director at Blis
“Since the decentralized ledger that forms the foundation of a blockchain keeps getting bigger with every block added to the chain, blockchain has an innate scalability problem. Mass adoption can’t occur if the ledger can’t scale because people will not accept slower applications than they’re used to just for the sake of a the ledger. As Blockchain picks up popularity in other industries, this problem will grow exponentially.”
8. Brandon Gains, VP of Marketing at Monetize More
“The industry is skeptical of most new technologies/standards as we’re constantly inundated with new acronyms and buzzwords every month. So as with all new innovation it needs to be much better than the current way we’re transacting media or it won’t make a stir.”
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