To Fix Ad Tech, Fix Ads; Don’t Block Them

Programmatic advertising is broken. Here’s how can we fix it.

The knee-jerk response is to completely eliminate digital ads. That’s the approach that some projects are taking to solve privacy problems, inefficiency and intermediary payment issues within the ad industry.

We think this response is misguided. Digital advertising today is failing everyone — consumers, publishers and advertisers. However, eliminating ads completely is not in anyone’s best interest. It threatens a sustainable business model for publishers and advertisers, leads to lower quality content and still falls short of protecting user privacy.

A better alternative is to address the underlying problems within the ad tech system. That requires hard work. It’s certainly not as easy as the blunt approach of trying to block digital ads. But building an ad tech solution that removes unnecessary middlemen, protects consumer privacy and mitigates fraud is a much better solution to ad tech’s woes.

The Wrong Way to Fix Ad Tech

For a long time the programmatic advertising industry has had problems. As much as 60 percent of what advertisers spend on ads disappears into the pockets of middlemen, which decreases publisher revenue. Even more concerning, advertisers have little means of controlling or tracking how ads are placed due to the proliferation of “walled gardens.” As a result, the ad tech industry compromises consumer privacy on a routine basis.

A simplistic response to these challenges is to kill ads altogether. That goal, in part, is driving the increasing popularity of ad blockers. More sophisticated projects, like the Brave Browser, give consumers the option of blocking most ads but opting in to certain ones.

While it’s good to see the developers behind these projects reacting to the problems in the programmatic advertising industry, their efforts fall short, in several respects, of solving the real issues that afflict the industry:

• Blocking ads doesn’t mean that consumers’ privacy is protected. Ad tech companies can still collect and distribute private data even if consumers block ads on their devices.
• Ad blockers undercut the main revenue model for online publishers. This makes it harder for publishers to create and distribute quality content. A world without ads translates to a world full of low-quality publications.
• Without ads, consumers miss out on opportunities. These opportunities may include discounts on products they plan to buy. Opportunities might also be missed due to poor ad targeting in the current system.

The Right Way to Fix Ad Tech

Rather than killing off ads, a better approach is to fix the underlying problems in the ad tech industry. This means:

• Using artificial intelligence to ensure that the ads that are served to consumers are contextually relevant to them — not just retargeting something they might have already purchased.
• Building a programmatic advertising solution that delivers privacy by design, in order to simplify compliance with regulatory frameworks like the General Data Protection Regulation (GDPR) while also protecting consumers’ rights.
• Giving consumers a way to control which ads they see and how their personal data is collected.
• Providing advertisers with ways to protect their brands and show consumers that they care about privacy. SAP Hybris reported that nearly 80 percent of consumers will abandon a brand if they believe it is not respecting their privacy.
• Preventing advertising fraud by ensuring that ad spending and placement can be automatically tracked. This can be done by using immutable records.

A programmatic advertising solution that offers these features would automatically correct many of the underlying problems within the ad tech industry.

By extension, this solution would remove the need for intermediaries within the ad tech supply chain. The main reason why ad tech has become bloated with so many middlemen is that the middlemen offer solutions for managing tasks like ad placement and the flow of data. By building ad targeting and data management and other key features directly into a programmatic advertising platform, developers eliminate the need for ad tech middlemen.

That’s bad news for ad tech middlemen. For everyone else, however, it’s a major improvement. Consumers gain much more privacy and control over which ads they see. Advertisers enjoy better targeting and more media per dollar. Publishers get a greater share of revenue because they can publish more relevant ads, which fetch higher cost per thousand (CPM) rates.

This is the solution that MAD Network is building. Using blockchain technology and zero-knowledge proof cryptography, MAD is doing the hard work of solving the underlying problems in ad tech in order to deliver a better experience for everyone.