Daniil Peshkov/123RF
 

Ultimate Guide To Blockchain In Advertising

  • 3 February 2020
  • Disruptor Daily

In some ways, digital advertising has devolved into the worst of both worlds: the average digital advertisement costs 12 percent more than it did two years ago while the average time per visit fell six percent. Even though advertisers are paying peak prices on digital, they’re seeing fewer impressions and less return on their advertising efforts. It’s clear that bang-for-the-buck in digital advertising is heading in the wrong direction and the industry begs for a solution to reverse the trend.

It’s not necessarily those selling the ad space who are to blame, however. Personalization is the rage in consumer offerings these days, and a 2016 survey found that 55% of people said advertising content was either not tailored to them or uninteresting. Competing in media today can require an unignorable, full-contact mentality, and advertisers who can’t effectively penetrate a consumer’s veil of signal versus noise simply need every advantage they can get these days.

This comes at a time when digital advertising metrics suffer from issues of trustworthiness. Measurements of how far and wide an advertising property might reach can be held secret or obscured by those wanting to charge a premium for access to their platform.

But blockchain technology emerges to present advertisers with a new way to move information and confirm financial transactions between verified members of a network. It stands to cut out middlemen from any processes where they weren’t necessarily adding value, instead letting two parties transact with each other directly.

Blockchain technology has already mainstreamed the world’s idea of the term “financial technology” and been the driving force behind popular cryptocurrency Bitcoin.

But what does it actually do and how does it actually work? The term “blockchain” doesn’t show sign of going away anytime soon, so that calls for some familiarity. As a next-generation database paradigm, blockchain methods have captured wide imagination about how this technology could change business operations for good across a variety of industries.

Chapter 1: Blockchain 101 

Blockchain in Advertising 101

If you ever want to solve questions of trust on the internet, use blockchain to do it.

Human history tells us that the world is full of unknown, unpredictable people. Many of them might be our close friends or family who are fundamentally on our side. But just as many might be malicious tricksters looking for a sucker to con. A number of technological solutions, particularly those that are blockchain-enabled, work to push back against those companies and individuals who’d otherwise be taking advantage of us. (Go ahead, we’ll wait while you send your banking details to an anonymous emailer who says he’ll give you a gold deposit.)

But if trust is the problem, then decentralization is the technologically enabled solution. This idea drives the entire blockchain concept, and in simplest terms, it says that you don’t store all your data in one place. You let other people store fractions of the whole, and before anyone changes anything on their fraction, they all have to agree to it.

Malicious cyberattacks ultimately depend on gaining access to information that the attacker shouldn’t have, but blockchain changes this paradigm forever as a decentralized database technology. Rather than store uses a single computer to store information in a single database, blockchain uses a network of computers scattered around the world that work together to maintain one database. When authorized users change the data stored there, other nodes on the network monitor it to confirm a legitimate update, then broadcast this updated information to the rest of the network.

This mechanism lets blockchain operate in a so-called “trustless” fashion. Whether people trust each other or not (even if they explicitly don’t trust each other), they can still transact in a trustworthy fashion. Preserving a decentralized ledger requires participation from the community of users that depend on it — the two people in the transaction aren’t necessarily involved in confirming it. That check gets outsourced to the community, who supervises the transaction to make sure it’s valid.

For cryptocurrency transactions, this means unknown third parties can confirm your receipt of some amount of Bitcoin and update your wallet balance for you, just as you might do for them. For blockchain applications in the insurance industry, this means validated, verified data can be transmitted as easily and securely as a large insurance premium might be paid on the same network.

Every piece of data represented on a blockchain comes with a figurative “seal of approval.” Insurance agents might see a blockchain-validated death certificate in order to confirm they needed to start paying life insurance. Patients can see an itemized, validated tab of everything they’re paying for when they send money to the insurance company.

Wherever information and financial transactions are involved, blockchain technology will emerge as a difference-maker. Read on to learn the five major benefits this technology stands to bring to the insurance industry.

Benefits of blockchain in the advertising Industry

1. Reduced ad fraud

As it stands, companies who purchase advertisements are often left to take the word of ad brokers when it comes to how much traffic an ad was directly responsible for creating. Metrics are still flawed, and the lack of transparency in identifying the impact of a single ad or campaign on a site’s success bleeds into the negotiating process. More transparent metrics (linked directly to the advertisements themselves) would generate stronger, more reliable data on clicks and impressions — that data would also have a significantly decreased vulnerability to third-party manipulation. 

2. More transparent media selling

Public talk about budget and price within advertising is not exactly common. It can be a high-markup business, and this welcomes unsavory players into the fold. One study found that agencies in the United States were routinely reselling ad space to their clients at a 90 percent markup. And this lack of transparency opens the door to avoidable mistakes actually occurring. Facebook admitted in 2016 that its video ad viewing metric only counted videos that were watched for more than three seconds. This meant efficacy reports on the ad platform were estimated to be 60–80% overstated on how effective the platform’s video ads were.

3. Personal data protection

A number of advertisers play a very data-heavy game, segmenting their content narrowly for fewer impressions that are more powerful on the target audience. Advertisers are incentivized to increase their use of harnessing data to build more effective ads, and in some cases this can extend to personal data or other sensitive info. Marketers are well in the habit of collecting information on their customers.

4. Improved data curation

Businesses are in the habit of collecting more data more frequently for advertising purposes, and this has made the data itself very volatile. Corporate data grows at an average rate of around 40 percent per year, but 20 percent of the database is statistically likely to be “dirty” or inaccurate data. The algorithmic nature of blockchain technology can help sort and consider only necessary, valuable metadata, adding a level of automation to curators’ jobs that will help filter the dirty data from the clean.

5. Enabling new advertising channels

Google and Facebook rule the internet ad space, but blockchain technology lets even a small number of like-minded people think and build big. If developers were so inspired to build a YouTube-like service that validated every view on the blockchain, they’d ensure that video ads were distributed more appropriately and better harnessed.

It’s easy to talk big and hypothetical about the future, but it’s something else entirely to say anything about it that ends up proving true. Just because a given industry is stagnant on innovation one day doesn’t mean it can’t be a livewire of progress and development the next day.

That’s why it’s important not to discount the many smaller, steadfast teams working adjacent to the advertising mainstream, striving to make next-generation blockchain technology-friendly and compatible with the ordinary systems at the same time.

Chapter 2: State of blockchain in advertising

State of blockchain in advertising

The state of blockchain in the advertising industry is highly comparable to its state in other industries: it’s immature and underdeveloped. It is the age of experimentation.

This doesn’t mean it’s not worth paying attention to in present day. After all, the only thing better than skating to the puck is skating to where the puck will be.

Blockchain is a generally dense topic, and advertising doesn’t exactly scream “welcome” to would be amateurs. Talk of how these two entities might interact with each other can get complex quickly — blockchain and advertising are both commonly misunderstood — but the real potential is in the process of being explored.

Other industries might face a more immediate need for blockchain’s data-processing capabilities, but advertising doesn’t exactly feel an emergency when it comes to data. That’s why major players are surely aware of the blockchain and its transformative potential. But these organizations might not necessarily be in a hurry to fix processes that aren’t broken.

Here are some of the top blockchain milestones from the advertising industry in recent history: 

✔ Ethereum-based ad network AdEx announced nine million transactions just two months after launch (September 2019).

✔ Blockchain technology won a big shoutout for the fact that it could be a transformative tool in the fight against ad fraud (September 2019).

✔ Stefan Thomas, former CTO of blockchain technology company Ripple, has announced ideas for using the blockchain to pay content creators who embrace an ad-free business model (September 2019).

✔ Amazon is hiring blockchain experts for its advertising division, with the popularity theory being that they will use the technology to store ad data (August 2019).

✔ Miller Lite launched a trivia game called Great Taste Trivia, in which players answer questions about beer and collect cash for correct answers via the blockchain (August 2019).

✔ IBM and Unilever announced strong cost-cutting capabilities as the result of a year-long blockchain pilot designed to improve online advertising efficiency (August 2019).

✔ Research firm Gartner published a report that significantly praised blockchain technology for its advertising industry potential (July 2019).

✔ McDonalds, Nestle, and Virgin Media have teamed up in an experimental blockchain-driven media buying program (July 2019).

Though it’s been the subject of speculation for years, It’s clear that the intersection between blockchain and advertising business is only just beginning to reach any kind of critical temperature within the past several months. Blockchain combines data accessibility with data security in a way so new and compelling that industries are taking their turns to flinch in the wake of this sea-change technology.

Blockchain doesn’t exactly excel at updating or reinventing products, but instead is exceptionally handy at finding new optimizations within the underlying business processes that lead to finished product. The immediate appeal isn’t always clear, especially if it comes with the expense of retooling existing processes that have worked without issue for years. But those wanting to ride the cutting edge only need to spend the money on a solution to see if it makes a difference to the underlying business.

The blockchain industry is due for more cohesive advertising news and products designed to work there. For now, the sector is largely engaged in a conservative getting-to-know-you conversation with this technology that presents a potential new way for doing almost everything. As the blockchain trend ramps us, so will more substantive use cases, and that momentum stands to potentially grow to the point that it becomes a new normal point of operation for the larger industry.

The question of blockchain adoption within advertising is far from answered, and we’re only in the earliest stages of seeing ad business form its first responses. This technology is proven (on paper and in other use cases) to be a missing link for unlocking new efficiencies, but advertising is so far taking its time to find its blockchain feet.

The latest events suggest more people are waking up to the opportunity and potential for change where blockchain meets advertising. But things that are new can be perceived as having an increased potential for risk. There are still real challenges that deserve consideration before any use case successfully takes blockchain to the big time within advertising.

Challenges to blockchain adoption in advertising 

1. A lack of proven use cases

There aren’t enough deep-rooted advertising people advocating for blockchain as the industry’s new way forward because there aren’t a lot of strong examples to point to. Advertising industry experience often only grants someone familiarity with its problems, it doesn’t necessarily lend itself to coming up with blockchain-based solutions to those problems. It’s only when there are a surplus of solutions available on the market (winning some acclaim in the process always helps) that people begin to notice blockchain as any kind of industry trend. “I’ve seen a lot of people talking about blockchain in advertising, but to date I have yet to see a real world example where it’s put to use in a way that makes a difference,” said Chris Richmond, CEO and co-founder of Proper Media. 

2. Education

People need to learn about a new paradigm shift in technology before they actually pony up to use it. Blockchain topics get complex quickly for their deeply technical nature, but this only makes education play that much more important of a role. It needs to be okay to ask a question like “what about this blockchain thing?” as a company reevaluates its processes. “There is not a one-size-fits-all methodology to deploy blockchain in advertising, so many companies are taking varied approaches – some focused on the supply chain while others are focused on data used for ad targeting,” said Ternio co-founder Ian Kane.

3. Power-wielding gatekeepers

An industry as established as advertising already has a clear power structure in place, and blockchain threatens that rigidity. “Leveraging blockchain’s famously transparent and immutable ledger, it’s technically possible to validate every interaction between viewer and advertisement,” said Jeff Koyen, founder of Pressland. “While this is technically possible, this clarity and availability might threaten today's gatekeepers. After all, middlemen make money by controlling data. Blockchain needs more time — and more successful deployments — before it can gain widespread acceptance.” Advertising is perhaps more resistant to change than other industries, but as long as it depends on data, the blockchain will be one of the most secure, accessible ways to store that data. 

4. There’s a lot of hype

It’s only within the past couple years that we’ve been hearing people talk with any kind of cohesion about blockchain solutions for businesses unrelated to cryptocurrency, and we’re only seeing the first trickles of activity there. Blockchain technology is almost intrinsically linked to talk of popular cryptocurrency Bitcoin, as well as enabling nearly anonymous transactions on the dark web. Blockchain technology at large is only ten years young, and most of this short lifespan has been dominated by talk of high-profile cryptocurrencies like Bitcoin. “People in ad tech are just starting to differentiate that Bitcoin isn’t Blockchain,” said Ternio co-founder Ian Kane.

5. Interoperability

Blockchain methodology lets data from multiple sources be united on a decentralized ledger in such a way that all that data remains trustworthy. This means different systems can interact with each other in new ways, finding new ways to automate old processes or uncover new efficiencies. The more blockchain can be compatible with up front, the more likely the advertising industry will be to trust it. The end version of this idea is perhaps a full-stack advertising technology suite, making it possible to track exactly how often your ad is viewed and the circumstances that led to it happening, and then paying for that impression in a unified platform.

A lot of these issues can be chalked up to a single truth — blockchain technology not only remains rather newfangled for advertising purposes, but is still largely a novelty in the mainstream world as well. It hasn’t established sufficient street cred to be taken especially seriously by advertising stakeholders yet, and in fact seems to be working its way through other industries first. And some stakeholders may not necessarily be interested in changing the status quo of their industry, especially if it grants them power.

That’s why adoption will only proliferate in niche circles at the outset, mostly by convention-flouting developers looking for something to experiment with. These smaller, committed crews do the unenviable work of building a blockchain product on spec within the advertising space.

But a sufficient compelling products built on spec is what it takes to for blockchain to catch on within an industry like advertising..

Trends shaping blockchain in advertising in 2020 

1. Fraud prevention

The ad industry deals with fraud at a level that industry outsiders probably wouldn’t understand. Bad actors are incentivized to operate non-human software bots drive traffic that generate ad revenue, while simultaneously obscuring the signal from the noise in any statistical analysis of who visits a site and where they are. Blockchain validation methodologies present new avenues for confirming that an ad was truly viewed by a human being.

2. Evolving media formats

The digital world changed everything, and it gave advertisers new channels to gain access to viewers’ mindspace. But as new media formats find steady footing, companies will need new ways to measure their performance. They’ll furthermore want a high degree of confidence in those measurements. Decentralized blockchain ledgers are handily capable of storing that data to make it computable and trustworthy at the same time.

3. Blockchain as a new foundation

There are still miles to go before the advertising industry goes parading its new favorite blockchain companies, but the conversation that this technology has applications far beyond cryptocurrency is alive and well. Just as it’s easy to imagine how banking institutions might harness this technology (you only need to look at the news to see that they already have), it’s easy to find other industries calling for a step change in how they do business. Instead of making people wonder what the blockchain is and how it works with a given product, customers will only need to ask themselves whether they like the product or not.

The state of blockchain in advertising is one highly dependent on the future. Will industry sentiment one day tip toward this nascent technology? There are some hardcore blockchain fans within the ad business who see great technical promise, but these deployments are highly technical for now.

There is a neutral-tending-optimistic sentiment for blockchain in advertising today. There are limited use cases now, and there’s a “let’s wait and see” moment happening.

Chapter 3: How Advertising Can Benefit From Blockchain

How Advertising Can Benefit From Blockchain

It’s not just about a new way of doing business. It’s about permanently gaining new efficiencies.

When experts talk about blockchain benefits to advertising organizations, their reasons tend to fall within three big categories: blockchain technology is a killer app for pushing back against ad fraud, a new blockchain use case makes shared industry data highly trustable at the same time, or the base-level technology serves as a strong reminder that stagnant industries might have cause to react to new technologies. Some innovations don’t require them to be involved.

Even though some digital advertising mediums may be considered quite new, the advertising industry at large tends to rely heavily on data and some potentially outdated business practices. This is exactly the kind of scenario that spells opportunity for blockchain implementations.

Here’s more on the blockchain’s three main benefits to the advertising industry.

1. Blockchain technology can make shared advertising data highly trustable at the same time

Across all sectors of advertising, from print to digital and everything in between, the ad business is rather obsessed with gathering data in pursuit of high-quality outcomes. Even when the substance of work might be highly creative, like designing a website or writing a web series, the business arm of every organization inherently wants to collect numbers for sake of understanding inputs and outcomes.

That quantitative analysis of qualitative work can lead to new ideas for gaining wider reach and getting more impressions. As a new and foundational data technology, blockchain at large asks different industries (advertising included) questions like “What if everything about managing your data was easy?”

Initial use cases are so far slower to emerge than this promise suggests, but we can only stay tuned. Advertising businesses across the board stand to make significant gains by more easily sharing varied data across different operations in order to find new ways forward in business. Blockchain is exactly the technology they may or may not have been waiting for to pose the question of how to optimize their business.

2. Blockchain technology presents itself as a new killer app for ad fraud

Every advertiser wants their client’s message to be well-heard, and a lot of money changes hands to make sure that the number of ads displayed actually translates into ads seen by prospective customers, or at least some human being online.

But like many other businesses, the advertising industry has to deal with the reality of fraud. Scammers run bots to generate more ad impressions, for example, collecting fraudulent payouts from advertising networks. Ad fraud of this nature is a major issue within the industry, and sector stakeholders are seeking a difference-making change to implement in order to push back.

Blockchain not only excels at storing data, but at verifying and validating it as well. A validated ad impression, for example, might be accompanied by the completion of a CAPTCHA and that confirmation recorded on the blockchain. That way a skeptical consumer could transparently audit the system for this individualized verification that every ad impression they paid for involved a human being on the receiving end.

Fraud is a certain inevitability in industries that present opportunities for it, but blockchain implementations operate in a way that means potential bad guys would have to literally be inventing new technologies in order to pry them open successfully. While the data in a given blockchain may be freely browsable and available, attempts to manipulate or alter this data are effectively impossible, even when you own the entire network.

Blockchain is especially concerned with provenance, so it’s a completely new way to fight ad fraud.

3. It compels sector’s workforce to ask strong forward-looking questions about the way things are versus the way things could be

When blockchain is thought of as a foundational technology that doesn’t especially matter to the end user — just a new way of completing old tasks — then this thinking will effectively always present the question of “What if we modernized our data practices?”

Questions like these ought to be aimed for all the time. They are high-quality future-minded questions in search of a considered, honest answer. These questions gather data that informs the future, whether it takes an industry toward change or stasis. The most effective businesses are uniquely focused on anticipating the future, and blockchain so far remains enough of a question mark that the outcome is unknown for now. Advertising isn’t necessarily incentivized to change — it has its own best practices going back generations.

Maybe things are already as lovely and perfect as they can be. Maybe blockchain-inspired thinking can tease out new efficiencies in old business. You don’t know until you ask good questions.

In the aggregate, blockchain seems to confront the advertising industry and force it to know itself and its present-day status quo. Only after this abstract point has been reached will the blockchain-driven advertising use cases start to explode. Despite any dependence on physical paper and approvals, advertising solutions on the blockchain may help turn its complex business processes into something that can be accomplished with the ease of sending email on your phone.

The advertising business is as old as the first marketed product, and the industry has some established standards that haven’t had cause to change or move for some time. It’s easy for that time to pass in these sequestered businesses that have the benefit of moving at their own pace. But external business processes can without their processes modernizing at the same time.

Blockchain is a strong reminder that there’s a difference between a direct competitor and an entirely new way to conduct business interactions. There aren’t necessarily lots of advertising businesses with a blockchain bent, but they are the first to be exploring a new way of conducting the same business. As this “new way” grows toward normalcy, larger, sleepier market players may find themselves suddenly facing a number of more effective direct competitors. That’s why it pays for them to be keeping an eye on the problems blockchain can solve in advertising.

That’s why our next section is all about!

Chapter 4: Problems Blockchain Can Solve in Advertising (And Who Is Solving Them)

Problems Blockchain Can Solve in Advertising (And Who Is Solving Them)

Advertising innovators like David Ogilvy or Bill Bernbach may have changed the industry forever, causing onlookers to move the goal lines on what they thought advertising could achieve. But the status quo can virtually always be broken and reformed stronger.

The status quo for advertising is already strong, but blockchain enthusiasts active in the space are lately trying to see to see ahead of the curve, finding the right way to place a bet that blockchain benefits are so unignorable that they become the new norm.

Advertising suffers from a need to straddle the realms of business reality and creative potential. Successful ad operations depend on coming up with ideas that move the needle for their clients in real, measurable ways. This requires a holistic set of skills — advertisers are neither tech geeks nor pure artists, but end up straddling lines between numbers and making things. This business isn’t completely quantitative or completely qualitative, but a healthy blend of the two.

So it’s a tall order for a new trend of piece of technology to sufficiently work its way into business as usual within advertising. If blockchain has a hidden card up its sleeve to drive adoption within the advertising industry specifically, it’s that the technology is equipped to handle all their usual data in a way that makes it highly accessible and highly secure at the same time. 

But advertisers tend to rely on what worked most recently. In the long term that means they end up depending on processes for good, without really considering the underlying mechanics with a critical eye. That means a lot of blockchain development within advertising is about trying to solve problems that might not necessarily be perceived as problems.

But there are a number of businesses making moves here anyway. These organizations clearly see new blockchain solutions to old advertising problems, working slowly toward making blockchain infrastructure a new normal across industries.

Problem 1: Fraud detection

Advertisers depend on successfully counting the number of times people see a client’s advertisement in order to figure out the value of the service they’re providing, as well as to confirm that the work is being seen. There are a number of existing solutions that solve this problem, but blockchain is perhaps the most exciting.

One of the most common ways to prevent fraud and make ads trackable is to embed a one-pixel image in an ad (that’s completely invisible to the human viewer) tell software to watch for that pixel to load and record the circumstances when that happens.

Knowing those circumstances is the same thing as knowing the circumstances that cause an ad to appear, and how many times, so that data is central to a number of ad operations. That’s why it’s extremely important to validate that information. Otherwise cybercriminals can use automated bots to load paid ads and record paid interactions with them, without any human beings involved.

(Yes, ad fraud is a big problem within the industry.)

There’s no silver bullet for this pervasive problem yet beyond maintaining certain best practices, but those best practices are not always accessible to laypeople. Cybercriminals continue to be motivated to find new ways into other people’s systems, but this technology can present a brand new obstacle that’s almost impossible for the bad guys to overcome.

How blockchain could solve fraud detection

Blockchain presents the necessary structure to turn advertising into a transparent, auditable process. If purportedly factual information doesn’t exactly line up with what’s presented in an immutable blockchain ledger, then this technology can catch that mismatch and inform people that there’s foul play afoot. This is the essence of what solving fraud looks like.

Solving for fraud is closely related to solving for trust, and blockchain operates in so-called “trustless fashion” by design. Blockchain is basically a tool that lets a collection of people share access to the same data, and be confident that everyone has an identical copy. Even in cases where these people explicitly don’t trust each other, blockchain technology ensures that they are all connected to a single, unifying network.

Blockchain technology grants more certainty in business transactions involving money or computer data — that those assets will reach the intended recipient in their intended form.The ability to seamlessly confirm that allegedly valid data is actually valid data means that fraudsters would have to go back to the drawing board in order to find a new way exploit an improved ad system. 

List of companies using blockchain to tackle this problem

Company 1: Lucidity

Lucidity techCEO: Sam Kim

Location: Marina Del Rey, California, United States

What they do: Lucidity brings more trust and transparency to marketing analytics so that companies in this space have a strong measure of the work they accomplish. Their software aims to automate a lot of advertising operations on a trustless, automated basis.

How they use blockchain: Blockchain technology forms the foundation of their core features, which run from verified impression tracking, end-to-end payment tracking, and other tools that ultimately use the blockchain to reduce fraud.

Company 2: AdBank 

adbankCEO: Jon Gillham

Location: Collingwood, Ontario, Canada

What they do: Operating from Canada, Adbank brings new transparency to payments between advertisers and publishers. The platform aims to share more profit with publishers, reduce expenses for advertisers, and limit ad fraud all at once.

How they use blockchain: The company’s ad platform relies on smart contracts to run completely auditable payments between parties on a blockchain. This implementation also meets certain standards of fulfillment that reduce ad fraud. This platform’s functionality is fully available to qualified developers seeking to integrate with the network.

Company 3: Basic Attention Token

Basic Attention Token LogoFounder: Brendan Eich

Location: Zagreb, Grad Zagreb, Croatia

What they do: Taking its name from the cryptocurrency that drives the overall system, Basic Attention Token has created a platform in which advertisers get more trustworthy metrics. At the same time, the ad consumer sees more relevant ads and publishers get a cut of the action in a fraud-free environment.

How they use blockchain: Basic Attention Token (BAT) is technically an ERC20 token running on the Ethereum blockchain that can be exchanged between publishers, advertisers, and users to make it easier to settle ad payments. Advertisers spend BAT with publishers based on the blockchain-validated measurement for user attention, and ad viewers can receive BAT in exchange for their participation.

Company 4: Sether

SetherFounder: Ovidiu Oancea

Location: Bucharest, Bucuresti, Romania

What they do: Rather obsessed with truth, Sether endeavors to make advertising operations more transparent. From who’s working with who to how much ads cost, Sether wants to make advertising auditable in order to find out what previously worked (or didn’t work) for sake of better predicting the future now.

How they use blockchain: Sether’s data is secured using blockchain protocols, and the technology also automates KPI tracking to keep costs low and processes efficient.

Problem 2: It’s not always easy to share data (especially securely)

Effective advertising operations take in data constantly in order to build a map of where they stand within the business environment and where they’re going. Those with the best access to the best data can move more quickly, and therefore gain an edge over companies with reduced access to lesser data.

That’s why the ability to easily share data with other people within an organization is closely related to that organization’s holistic business health. Easy access to a unified collection of trusted, high-precision data about a company’s performance might lead to an idea from any curious employees brave enough to navigate there and take a look.

Data-backed decisions drive business success, so successful companies depend on departments having a high degree of fluency with each other. 

How blockchain could solve data sharing

A blockchain is exactly the kind of unified database that allows for high security and ease of shareability. Businesses can populate a decentralized database with whatever information is most interesting to them, and retain it with proof that it came from a reliable source.

By storing potentially disparate info on one database and making it computable, businesses set the stage for curious, number-minded employees to find missing connections between inputs and outputs that might otherwise go lost or unnoticed.

Blockchain networks allow for the formation of a kind of “business brain” that can confidently retain potentially unimportant data for the sake of identifying its value later. You might think of a blockchain as a new and improved database that goes way beyond Excel.

List of companies using blockchain to tackle this problem

Company 1: SmartyAds

SmartyadsCEO: Ivan Guzenko

Location: New York, New York, United States

What they do: SmartyAds is a programmatic advertising platform that brings more transparency and better tracking into advertising campaigns. The company’s potential endgame involves bringing every media buyer and seller, ad network, and data management platform into a single transparent digital advertising ecosystem.

How they use blockchain: Recording all this data in a blockchain system makes it more trustworthy and searchable than other platforms can allow for.

Company 2: Wolk 

WolkCEO: Sourabh Niyogi

Location: San Mateo, California, United States

What they do: Operating from San Mateo, California, Wolk is an advertising data exchange bringing more transparency to the ad business. Its software makes the sale of advertising data more auditable.

How they use blockchain: Suppliers earn tokens for uploading data to the exchange. Users spend tokens to gain access to the data. The associated smart contracts add liquidity, as the tokens can be exchanged for Ethereum (and later cashed out to USD) at any time.

Company 3: Thrive Labs 

Thrive Labs

Founders: Cataldo Franzone, Giuseppe Scordino, Viviana Carcione

Location: Mosta, NA – Malta, Malta

What they do: Operating out of Malta, Thrive Labs runs a decentralized ad marketplace offering low fees, paid data sharing, and thoroughly vetted affiliate sites worth placing advertisements with. Advertisements are placed on their own merit, based on high quality reviews of professional experiences with those sites.

How they use blockchain: The associated marketplace is decentralized and blockchain-driven. The data that forms the fulcrum for the entire system lives on the blockchain.

Problem 3: There can be a lot of middlemen in advertising

It can take a lot of people to execute a successful advertising campaign across print or digital mediums, and each one of these people adds fundamental complexity to getting the publicity work done. Agents might act as go-betweens for actors and ad studios, taking extra time on your dime and earning their share of it all at once.

As with any mature industry, there are some vested powers throughout advertising. Certain firms known for their longevity or their unconventional, recognizable designs will want to protect their position within the industry, as well as any cachet that comes with it. This means occasionally working with experts on a per-engagement to help realize a great idea on a per-engagement basis, instead of taking them on as full-time staff. 

In any case, middlemen to good and bad ends alike proliferate throughout advertising.

How blockchain could solve the middleman problem

Blockchain is a database technology that makes it perfectly calm and ordinary to transact data and value with someone directly, whether you trust them or not, and send or receive that data as expected.

A blockchain’s actual “database” is decentralized, which means different parts of it are stored in different places, and the strangers involved in keeping the ledger in order need to convene and agree to validate every update to that ledger.

In other words, it’s no problem for advertising entities to interact with each other securely as long as those interactions take place on the same trusted blockchain. Whether they’re transmitting data or cryptocurrency as payment for some service rendered, blockchains shorten the advertising industry’s average distance between data and the person seeking it.

And gains of that nature are a real edge against competing solutions.

List of companies using blockchain to tackle this problem 

Company 1: Ternio

TernioFounders: Daniel Gouldman, Ian Kane

Location: New York, New York, United States

What they do: Ternio enables payments between those who transact in the digital advertising space. Their solution can handle over one million transactions per second, and while it’s specifically tailored for the advertising industry, it’s just as deployable for handling transactions across other industries.

How they use blockchain: The company uses blockchain methodology to verify individual ad impressions and metrics of interest associated with that ad. The built-in payment infrastructure means parties can transact with each other directly, there’s no longer a need to bring a new party along in order to enable payment.

Company 2: MetaX

metaXCEO: Ken Brook

Location: Santa Monica, California, United States

What they do: Running out of Santa Monica, California, MetaX serves to create and release a number of dApps and protocols. Running a user-curated database of sites called adChain Registry, the company’s users appraise both ad content and the places to display it for their legitimacy.

How they use blockchain: Token-curated registries grant access to users wishing to access or alter a decentralized list, whatever that content might be. The underpinning blockchain both manages the digital tokens as well as maintains the secure shared ledgers that track them.

Company 3: MAD Network

MAD NetworkCEO: Adam Helfgott

Location: New York, New York, United States

What they do: Operating out of New York, this company’s protocol unites consumers, advertisers, and publishers without any industry gateholders involved. Where advertising processes might be opaque at times, there’s little in the advertising world that can’t be achieved when these stakeholders participate with each other on one platform.

How they use blockchain: It forms the foundation for everything the company does. AI delivers relevant ads to users without sharing the user’s data with external parties. That user data is cryptographically stored on the blockchain in an immutable fashion that makes it highly resistant to tampering and abuse.

There’s an active cast of characters at the intersection of blockchain and advertising, and the question of when there will be more can only be answered by how many people see blockchain potential for a pain point within the industry.

That’s why the future of blockchain in advertising is broadly characterized as “making everything a little (or a lot) easier.” Let’s get into it in the next section.

Chapter 5: What’s the future of blockchain in advertising?

What’s the future of blockchain in advertising?

Blockchain has an advertising problem, and this is especially clear within the advertising industry. There’s not enough ground awareness across enough leaders in the sector for it to have caught any kind of critical mass. There are mostly small and experimental stabs taking place to handle advertising processes with blockchain methods, the larger and established industry players aren’t really making any moves yet.

This is to be expected. In a number of ways, advertising can have backwards, outdated processes as it is a category of industry that gets to move at its own pace. But those processes have worked without any serious issue for generations, and there’s not always going to be a lot of energy around the idea of fixing what isn’t broken.

A critical mass seems bound to accumulate. Eventually there will be enough blockchain-driven applications recognized throughout the industry for them to become establishment-grade tools. But this will happen slowly over time (or at least as soon as blockchain’s anti-fraud mechanisms become more widely known and reputed).

Blockchain use cases seem bound to offer enough advantage over other advertising tools down the road. But it’s difficult to say exactly when this will happen. Here’s what seems more appropriate to say exactly about the near future of blockchain in advertising.

1. Advertising’s blockchain needle doesn’t seem poised to move just yet, but the industry will percolate as one that’s friendly to experimentation

Chris RichmondAs an industry free from a certain amount of regulation, there’s nothing especially controversial about an ad company using a blockchain to carry information throughout its organization in a new, novel way. Blockchain implementations in advertising are not as questionable as those involved in transmitting medical or credit card, two categories of information that come with heavy regulatory baggage about how it can and cannot be shared. But critical mass is only going to accumulate over time. “[Blockchain-driven advertising use cases are] ‘in development,’” said Chris Richmond, CEO and co-founder of Proper Media. “I’ve seen a lot of people talking about blockchain in advertising, but to date I have yet to see a real world example where it’s put to use in a way that makes a difference.”

2. Increased transparency

Andrew KolodyukThe immutable, auditable nature of blockchain data means it’s easier for interested (and authorized) parties to examine exactly the course that some process took. Widespread transparency plants the seeds for deep self-reflection as an industry, and blockchain’s provocative cards-on-the-table paradigm may be inspiration to redesign a number of business processes from the ground up. “In the current landscape, advertisers are demanding transparency from partners in order to ensure they are receiving value for their dollars,” said Andrew Kolodyuk, founder and chairman of DIVAN.TV 2.0.

3. Compelling fraud solutions

Jeff KoyenBlockchain databases are especially concerned preserving trust and accuracy with the data they convey. Cybercriminals are capable of skimming big chunks of money from the industry’s margins. But blockchain will end up working as a test of truth for certain pieces of ad information (for example, that an ad was viewed by a real human being). Hackers may be incentivized to alter data on a database to suit their needs, but blockchains are highly secure to the point of being virtually impenetrable. “Take click fraud, for example,” said Jeff Koyen, founder of Pressland. “Leveraging blockchain’s famously transparent and immutable ledger, it’s technically possible to validate every interaction between viewer and advertisement. Data stored on a blockchain can eliminate the gray areas when auditing a campaign’s reach, engagement, and conversion.”

4. More advertising systems will be able to share data with each other by virtue of talking to the same blockchain

Disparate advertising systems will gain lots of interoperability with others, and they stand to see their data united among other data sources to be stored and represented in a blockchain. Advertisers depend fundamentally on data to establish how far they a customer’s message reaches and to understand the relationship between their effort and the output. As blockchain systems can easily receive validated information from external data sources, that unified data will slowly reveal compelling use cases.

Blockchain’s relationship to advertising right now is like a long-distance relationship through time. Either blockchain is too far ahead of the curve, advertisers are too far behind it, or a little bit of each. But this industry has some highly coordinated business processes that may be more ritualistic than they are productive.

It’s a time of narrow experimentation for companies with a budget to operate at a loss until the market moves to more favorable conditions. It’s a time for pioneers — advertising might be the kind of industry that will lean into the blockchain only after a layer or two of more flexible industries start seeing good results from making some kind of switch to a blockchain product.

Advertising is a bit more conservative and resistant to change than other sectors because there is significant money moving through the space. Tweaks or changes to business as usual play on advertisers’ anxieties about finding themselves one day cut off from their client list. They are skeptical of change because things are already going pretty well.

As it was so directly connected with financial transacting, blockchain technology was cause for the banking and financial sectors to flinch and react to first. Whether they love it or hate it, the heads of different banks have all sounded off about the perceived promise or threat that blockchain presents to their industry. 

While there are real and cohesive conversations about blockchain applications that go beyond cryptocurrency and into how they might grant niche industries new optimizations, advertising makes a strong showing but does not lead this conversation yet. Other industries seem more developed or primed for blockchain development right now, and advertising implementations still have a highly experimental vibe about them.

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Disruptor Daily's Podcast dedicated to interviewing the world's top thought leaders on practical use cases for blockchain technology.

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