GDPR and blockchain: the next stages in programmatic advertising’s evolution?

This year has been one of vast technological development across the ad tech industry. Emerging technologies such as Artificial Intelligence (AI) and Machine Learning have continued to establish themselves as key drivers of intelligent advertising and personalisation across the programmatic ecosystem.

Meanwhile, Blockchain technology has rapidly increased its presence across the sector and is now presenting advertisers with a host of new ways to both diversify and secure their platforms as they look ahead towards the next 12 months.

Progression of programmatic

The new year is also set to herald a new era of evolution for programmatic advertising technology.

Recognised by advertisers for its unprecedented ability to streamline the process of ad buying for advertisers worldwide, programmatic technology is now firmly positioned at the forefront of automated and data-driven decision making for advertisers, so much so that it is now predicted to account for 100% of all advertising trading execution by 2020.

Advertisers are not only embracing programmatic solutions to improve the efficiency of their ad spend; many are now also using the technology to address industry wide challenges, such as fraud, ad blocking and a lack of transparency.

Yet, a new year has begun and new technologies continue innovating, the once aggressive progression of programmatic advertising is beginning to decelerate. While it is still expected to grow at an average of 28% in 2018, hitting US$ 64bn globally, this rate is much slower than what we have seen in the last few years.

This is a likely sign of the technology entering a new stage of increased maturity, as it continues to prove its value within the sector.

GDPR and its impact on programmatic intelligence

The evolution of programmatic advertising technology will not only be impacted by its own loss of momentum. The forthcoming introduction of the European Union’s General Data Protection Regulation (GDPR) in May is set to transform the way programmatic advertisers both collect and process the personal data of consumers. Once enforced, GDPR will require programmatic advertisers to be more transparent by obtaining active consent from customers for the use of their personal information, and will also give consumers the power to remove their accumulated historical data from any database they wish.

Yet, with today’s programmatic advertising technology so inherently reliant on consumer data to provide intelligent and automated ad targeting, these unavoidable regulation changes may well undo much of the progress made in enabling automated and personalised advertising, which has been largely generated by the rise of the AI trend in recent years.

This machine-led technology is currently used by programmatic advertisers to collect smart data on consumers and tailor their messages accordingly and has been an asset to the programmatic ecosystem of late. However, the implications of GDPR could somewhat restrict the extent of the role that AI-driven technology plays across the sector in the future. This will create significant challenges for the innovation of programmatic advertising and could deputise its ability to offer advertisers an effective ad buying process.

With this in mind, I believe that today’s programmatic advertising technology can simply no longer provide brands with the level of both automation and transparency now required for success in the sector.

Coupled with ever growing concerns over fraud and transparency, it is now important that programmatic service providers welcome the potential of other emerging technologies, which possess the capabilities needed to address the aims of GDPR and ensure both secure and efficient advertising, to continue advancing throughout 2018.

Utilising Blockchain to enhance programmatic

One emerging technology that will undoubtedly have a significant impact on programmatic advertising in 2018 is blockchain. The technology itself has garnered many column inches across many industries since its conception a few years ago, and the ad tech sector is no exception. The nature of the technology can undoubtedly provide some obvious benefits for advertisers adopting programmatic strategies.

Its ability to create an immutable record of transactions and provide users with a full audit trail of every transaction makes it an instrumental asset to increasing security. By providing advertisers with an irrevocable receipt of transactions, blockchain can work to reduce or even eradicate the risk of ad fraud. What’s more, it also increases transparency over expenditure, by enabling advertisers to see exactly where their budget is being spent and exactly who they are transacting with.

With blockchain able to drive security and reduce concerns amongst advertisers over issues such as ad fraud and transparency, advertisers themselves will be able to devote more time to increasing the efficiency of their audience targeting and improving the personalisation of their advertising strategies. As more come to realise its benefits, it is likely that we will see a rise in the integration of blockchain within automated ad buying processes in the coming months.

As the digital advertising industry continues to strive for both successful automation and creativity in equal measure, it is vital that programmatic embraces the capabilities of new technologies to continue its innovation over the coming months.

Yet, with GDPR bringing new challenges surrounding the handling of consumer data and with the growing concerns over transparency and fraud still plaguing the industry, programmatic advertising as we know it will have to undergo a huge transformation to both evolve and remain dominant in the year ahead.

– by Zheng Zhang

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