In the fast moving world of tech, reaching a 25 year anniversary is no small feat. Since its launch a quarter of a century ago, Google has revolutionised the internet – and digital advertising in particular.
With its launch of AdWords in 2000, Google has put itself in the centre of the digital advertising ecosystem. Today, over two-thirds of digital ad buys go through Google. With its focus on ease of access, it is undeniable that Google has made the barrier for entry lower, allowing more brands to effectively reach their consumers.
However, as the tech monolith looks forward to its next 25 years, many are starting to call into question its dominance. The European Union has suggested that Google sells part of its advertising business, while the US Department of Justice is facing down the tech company in a watershed antitrust trial. Both are a reflection of how opaque the digital advertising process has become, with the EU’s investigation specifically finding that Google’s ad server favoured its own ad exchange.
Google, along with the rest of the digital advertising ecosystem, is at a crossroads. Marketers are under more pressure than ever before to increase ROI and make every penny count. At the same time, wastage is rife within programmatic advertising, with around 23% of all advertising spend heading towards unfit locations. Throw into the mix the increased demand for data privacy from both consumers and lawmakers, and it’s clear there is a need for a paradigm shift in advertising.
With this in mind, the break up of Google’s monopoly is a positive for both advertisers and publishers, and allows for a more transparent and privacy-focussed ad exchanges built on decentralisation.
A Fresh New Start
When Google was founded, it built itself – as most tech companies did – in a centralised fashion. Power over its solutions, most notably its ad exchange, sits in the hands of one single authority – Google itself. However, in recent years, as the shift away from Web2 and towards Web 3 has begun, decentralisation has emerged.
This means that all participants in a new tech solution – in this case an ad exchange – are given power thanks to blockchain technology. While an exchange vendor is still present, all users of a decentralised exchange become stakeholders and are rewarded for their participation. This emergent, forward-thinking technology can act as a bridge between Web2 and Web3.
Seeing clearly
Centralised exchanges have long operated as ‘black boxes’. Those using the exchanges see very little of the inner workings, with minimal verification on the accuracy of the data produced, where budgets are spent on the programmatic supply chain, and whether inventory is being valued correctly. On top of this, exchange vendors take between 15 – 35% in fees. All this means advertisers waste spend and publishers’ share of budgets shrink.
By contrast, decentralised exchanges have radical transparency baked-in. With every transaction written onto an immutable public ledger, both buyers and sellers can track the journey of every dollar spent. In a centralised exchange, 15% of advertiser spend is simply unaccounted for – decentralisation eliminates this opacity. Instead marketers can more accurately audit their campaigns, tracing exactly where an ad was served, when it was served, and what interactions were received.
By being able to more effectively measure where their ads are headed, marketers can better optimise their campaigns. Every transaction is written onto the ledger in-real-time – this means that spend can be pivoted towards better performing areas in-flight. It’s a win-win for all in the ecosystem – advertisers better reach audiences, publishers gain high quality advertisers and a great percentage of ad spend, and consumers see more relevant advertising.
The break up of Google’s advertising arm signals the start of a shift to the next age of advertising – and the internet more broadly. Decentralised and blockchain-based technologies are increasingly forming a larger part of online infrastructure. However, marketers don’t need to wait for this shift to have finished to start taking advantage of this paradigm-shifting technology. Decentralised ad exchanges are already revolutionising marketing – advertisers should look to take advantage of their capabilities to help them bridge the gap between Web2 and Web3.
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ABOUT THE AUTHOR
Ben Putley, CEO and Co-Founder, Alkimi
Ben is the Chief Executive Officer and Co-founder at Alkimi Exchange. He has 10 years’ experience in digital advertising, predominantly focused on selling software to global publishers. Ben led the new business function at The Fifth, News Corp’s influencer marketing agency, where he delivered over £2m in influencer marketing campaigns with brands including Disney+, Heineken, LR Suntory, Unilever and Nestle. Prior to the Fifth, Ben led all software sales for Sharethrough’s European Business, selling content management solutions to CNN (International/ Domestic), Forbes, The Telegraph, The Daily Mail and other Comscore top 100 publishers.