The global advertising industry in its current setup is fundamentally flawed.

The current setup of the global ads industry is centralized and only handful of companies determine how the market operates. Google and Facebook have a duopoly of sorts as both companies accounted for a combined 61% of the global ad spend in 2017. In FY 2017, Facebook reported that its total ads revenue was around $39.9B and Google’s ad revenue in the same period was around $95.4B.

The fact that only two companies control the bulk of the digital ads market gives them a duopoly of sorts in which they dictate the terms that other stakeholders must follow.

The duopoly of Google and Facebook has seen ad spend growing rapidly in the last couple of years. Forecasts from Zenith Online shows that social media ad spend will increase by 21% to $58B while video ad spend is expected to jump by 19% to $32B this year. Advertisers simply need to spend more money to get their ads in the face of their target audience.

Increasing ad spend doesn’t guarantee decent ROI

Unfortunately for advertisers, increasing your ad spend doesn’t necessarily mean that the attention of your target audience is guaranteed. For instance, the average click-through rate (CTR) in Google Adwords across all industries is 3.17% and 0.46% on the display network (see infographic below). Facebook advertisers have it worse with an average clickthrough rate of 0.90% across all industries.

Many of today’s ads feel intrusive, hence many people have learnt to ignore ads or stop them completely by installing ad blockers on their browsers.

Thirdly, people who create the content that often serves as the driving force behind the ads rarely get paid enough or at all for their content. Some platform such as Google’s YouTube and Facebook’s Instagram pay content creators signed up on their ad networks.

However, for the most part regular users don’t get paid for the content their produce. This piece examines how blockchain technology could decentralize the digital advertising industry.