Advertising will reach approximately $667 billion globally in 2024, including the spike in advertising accompanying a U.S. Presidential election.
According to an ISBA Programmatic Supply Chain Transparency study, 15% of digital advertising spend is “unattributable —that’s about one-third of supply chain costs.” That is, advertisers don’t know where that money has gone.
Tech giant Google is facing scrutiny from the U.S. Federal Government, which is trying to break up parts of the company’s advertising business. The Department of Justice (DOJ) has alleged that Google has manipulated prices for display advertising by acquiring online advertising firms such as DoubleClick, offering services that allow ad buyers to target users, and essentially forcing advertisers to use their services to compete for audience penetration.
Roughly 90% of online publishers use Google to display their advertisements, though Google argues competitors, including Meta and Amazon, give advertisers additional options.
But if Web 2.0 big tech is creating a problem by limiting buyers’ options, how can the Web 3.0 industry leverage the potential of blockchain to provide a better, more transparent, and more efficient solution for ad spending?
Blockchain Building a Better Ad Campaign
Enterprises outside of blockchain are realizing blockchain’s potential to make advertising more transparent and efficient, and individual industries have begun to explore their own solutions.
For example, in Q2 of 2024, luxury brands including Moët Hennessy Louis Vuitton (LVMH), Prada Group, Cartier, Mercedes-Benz, and OTB Group united to create the Aura Blockchain Consortium, a blockchain-agnostic group meant to establish a standard for transparency in blockchain advertising.
However, businesses like Alkimi Exchange, a vertically integrated app built on Ethereum ETH/USD, are making blockchain’s value available across all industries. We interviewed Benjamin Putley, CEO and Co-Founder of Alkimi, which describes itself as the world’s first decentralized ad exchange.
Benzinga: How is Alkimi changing the equation for advertisers?
Putley: “Alkimi operates a unique Ads Explorer that provides real-time visibility into every transaction spent on ads. Advertisers now have real-time insights into their ad spend, ensuring that every dollar is accounted for and spent effectively. We eliminate the guesswork and opacity typically found in traditional programmatic advertising.”
B: What problems are you solving with a blockchain-based marketplace for programmatic advertising?
P: “Traditional advertising methods are frequently inefficient, high cost, and lack transparency. We are addressing this industry gap by eliminating intermediaries and cutting fees from as high as 43% to just 3% to 8%. That is especially crucial for large brands and corporations with a global network of partners, agencies, and contractors. By leveraging Distributed Ledger Technology (DLT), we ensure that every transaction in the advertising process is notarized, ensuring 100% transparency of media spend and allowing businesses to regain trust in the industry.”
B: Is your solution primarily a cross-over Web 3.0 solution for Web 2.0 businesses?
P: “Our primary focus is the Web 2.0 market, as it is in critical need of transparency and auditability. These companies often navigate a complex web of advertising processes, spending huge sums on marketing, and yet it is frequently untraceable. By targeting this space, we aim to provide a solution that not only streamlines processes but also restores trust and ensures that every advertising dollar is traceable and efficiently spent.”
B: Web3 projects have trouble placing traditional ads. Is your platform optimized to help them in any way?
P: Our platform is fully optimized to support both Web3 and Web2 customers. We have built a robust network of advertisers that allows us to bridge the gap between traditional and emerging industries. Web3 businesses are obviously facing regulatory challenges within digital advertising, but it’s a space we’re both excited about and well-positioned to develop. The same advertising principles apply across all sectors, and we expect the demand for our platform to grow as the Web3 industry gains both legitimacy and regulatory clarity.”
B: What is your long-term goal?
P: “We want to reshape and transform this $600+ billion industry into a fairer, more accountable, and sustainable place. Our mission and everything we do is focused on transforming programmatic advertising by restoring trust, faith, and value to advertisers, publishers, and consumers.”
Summary
The mainstreaming of blockchain technology can take many forms, and sometimes, B2B use cases can drive adoption as much as consumer-focused solutions because potential customers have a greater incentive to make the operational and cultural changes necessary to make the leap to Web 3.0.
Whatever the outcome of the DOJ case with Google, few would deny that Google has an outsized influence on any industry it touches. The tech sector is renowned for providing new solutions, so it stands to reason that blockchain should be part of the advertising equation.
New solutions like Alkimi’s ad exchange are a welcome addition to Web 3.0. We may struggle to move users from Fortnite to GameFi, but a corporation will advertise wherever it can get the best deal, and blockchain is unbeatable for providing transparency and efficiency.