Opinion

What Blockchain Could Mean for Marketing

By Anindya Ghose

In recent years, a major pain point for brands and advertisers has been the lack of transparency and accountability in being able to ascertain how their ad dollars have been spent.

Companies are collecting more data than ever before, and are making significant business decisions based on it. Of the 4 Vs of Big Data (Volume, Velocity, Variety, and Veracity), we have now seen ample evidence of the impact and importance of the first three. A higher “Volume” of data has led to more efficient decision-making in numerous instances, such as in programmatic marketing and in banking. Research has shown how leveraging high “Velocity” data — such as data from mobile devices — has unearthed knowledge that has helped firms better understand their customers. The significant potential of high “Variety” data — data that is unstructured in the form of text, images, videos, and so on — to make better predictions has been documented in numerous academic studies. But what about issues related to the accuracy, reliability, and transparency of the data itself, which basically comprises the fourth V, “Veracity”? In the field of data-driven marketing, an answer to addressing this limitation lies in blockchain technology.

In recent years, a major pain point for brands and advertisers has been the lack of transparency and accountability in being able to ascertain how their ad dollars have been spent. Digital advertising is complex, because ensuring that the media that was purchased was actually delivered as it was intended, is non-trival today. Ad fraud is pervasive, and costs marketers and publishers a significant amount of money. Forrester reports that as much as 56% of all display ad dollars were lost to fraudulent inventory in 2016. And the cost of ad fraud globally is expected to increase to $50 billion over the next decade.  A recent study into the state of programmatic advertising revealed that 79% of advertisers surveyed expressed worries about transparency, with over a third regarding the lack of visibility on third parties as one of their key concerns. It’s why we are increasingly hearing that major brands like P&G have cut their ad budgets, because their media agencies failed to give them the transparency they needed.

Read the full article as published by Harvard Business Review

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Anindya Ghose is a Professor of Information, Operations and Management Sciences, Professor of Marketing, and Academic Director of the Masters of Science in Business Analytics program.