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The Environmental Benefits of Distributed Ledger Technology in Digital Advertising

Digital advertising agencies are adopting innovative solutions to boost operational efficiency and increase the value of their clients’ digital ad spend. As it so happens, the same technologies which reduce wasteful ad delivery and simplify operations are also good for the planet.

As part of their commitment towards achieving environmental sustainability, some of the world’s leading media planning agencies are implementing distributed ledger technologies (DLT). The key is to incentivize the ad-tech supply chain towards environmentally-friendly outcomes, even if that means paying more for a quality ad and nothing for a bad ad. By eliminating the economic incentives for duplicative data reporting and non-viewable advertising, we will be able to save precious energy resources. 

Advertisers are evaluating the verifiable sustainability of their media vendors and service providers. It is by our summed efforts that the digital advertising industry as a whole will be carbon-neutral.

What is distributed ledger technology (DLT)?

Properties of a distributed ledger technology. Distributed, programmable, secure, immutable, unanimous, time-stamped, and anonymous.
Source: KPMG

Distributed ledger technology (DLT) is a system of verifying records that supports business applications such as smart contracts. This technology enables multiple stakeholders to refer to a single source of truth and not duplicate, or potentially conflicting, information.

DLT-powered reconciliation platforms for better campaigns

Implementing a reconciliation platform that uses DLT is key for bringing operational efficiency to direct digital advertising. But, it is necessary that agencies implement reconciliation platforms that consider how frequently the DLT needs to be used, the environmental impact of the DLT that is used, and the impact on economic incentives for the supply chain. 

At AdNode, a verification record is published for every hourly combination for every placement instead of only one for every ad impression. While there is evidence of the smart contract calculation for every ad impression, it is stored in a log-file associated with the hourly data for the particular placement with the specific publisher. This practice carefully balances the need to enable agencies to bring automation to digital ad campaigns, provides an audit-trail that can be tied to every ad impression, and reduces the energy usage of the DLT. 

Automated reconciliation tied to billing for viewable advertising eliminates the economic incentives for publishers to serve non-viewable or non-human ads.

Overall server energy consumption decreases with fewer low-quality ads loading on users’ screens. 

Access to a single source of truth for media billing allows publishers and agencies to eliminate the need to load multiple or duplicative ad measurement tags. This prevents at least double the processing for every ad impression, not to mention slower ad load times for users.

DLT benefits digital advertising stakeholders and the environment

Digital advertising stakeholders benefit from DLT. By employing the use of smart contracts, advertisers, publishers, and agencies share a single source of truth on their media spend and campaign performance, while significantly reducing overhead costs and streamlining operations.

By agreeing upon a single source of truth, stakeholders can achieve sustainability goals without sacrificing profits. Supporting your agency’s operations through distributed ledger tech can aid organizations in eliminating the unnecessary waste of natural resources.

Distributed ledger technology is audit-friendly because all parties refer to one record only. It promotes trusting finance departments and eliminates invoices and checks by mail. And it also enables paperless reporting because there is no need to have printed data.
A Single Source of Truth

Effortless data audits

Keeping incorrect data across multiple systems, processing data, and using manual hours to sort out discrepancies is not an energy-efficient and effective use of resources. Having an audited record for media spend that is not subject to discrepancies, eliminates the need for paper in digital advertising. 

Relying on billing certainty 

Audited records are the baseline for eliminating invoicing and checks by mail. If you are paid Net90, you’ll continue to be paid Net90. Your float will likely still remain as it is because it is part of the agency business model. 

Finance departments will now feel comfortable eliminating paper in billing by eliminating the need to manage uncertainty with an audited distributed ledger.

Consistent reporting 

One of the reasons advertising professionals print out data is to dive into it because they do not trust or understand it. Duplicate printed documents are a recipe for disaster, and it is not only time-consuming but highly wasteful. 

Thanks to the visibility DLT provides, agencies can now forget about discrepancy reports and refer to the same reports as the other parties involved.

Building strategic partnerships in favor of our environment

A single source of truth solves multiple digital advertising stakeholders’ concerns. Creating alliances with partners with aligned values has become crucial for agencies to reach their goals while maintaining a low carbon footprint.

Environmentally-friendly digital advertising decreases energy consumption by eliminating time spent on redundant tasks and data processing. It eliminates paper use thanks to reliable auditing, billing, and reporting. And it also reduces carbon emissions when optimizing stakeholders’ operations.
Automation in data management reduces overall energy consumption.

Quality advertising must take into consideration people, planet, and profits. Automated solutions like distributed ledger technologies can help the media & advertising sector to evolve into a cleaner and more energy-efficient industry.

Achieving energy efficiency in digital advertising supply chains 

It is becoming ever so important to scan and choose technology partners that care about their operations’ impact on the environment. As not all distributed ledger technologies require the same energy consumption, it is important to partner with companies that are energy conscious. The difference in energy consumption between similar distributed ledger technologies can be huge. 

Proof-of-stake (PoS) distributed ledger technologies are considered more cost-efficient and eco-friendly than proof-of-work (PoW) due to their consensus-based model, requiring computers to consume much less power because of fewer data processing requirements.

Scale illustrating the differences between blockchain-powered technologies, proof-of-stake versus proof-of-work.
Not all distributed ledger technologies consume energy alike.

For example, research suggests that mining bitcoin takes even more energy than mining gold. In contrast, the proof-of-stake blockchain EOS is 66K times more energy-efficient than Bitcoin and 17K times more energy-efficient than Ethereum. 

Hedera, another proof-of-stake blockchain, uses so little energy that it is actually carbon-neutral. Since its carbon footprint is so low, Hedera purchases carbon credits to offset its minimal environmental impact. 

Agencies and publishers seeking to achieve carbon-neutrality can best achieve it by choosing to implement distributed ledger technologies that run on efficient and clean energy.

Automation: the key to achieving net-zero carbon goals

Proof-of-stake blockchains are either carbon-neutral or nearly there, depending on which you select. A single source of truth eliminates the need for paper invoicing, excessive re-processing of supply chain billing calculations, and discrepancy resolution. Every stakeholder will benefit by collecting and referring to data from only one source.

Working with automated reconciliation platforms reduces the industry’s economic incentives for wasteful and inefficient advertising. It also reduces incentives for excessive tagging for every ad impression by multiple measurement vendors. Automation enables better, cleaner and more efficient digital advertising.