How Will Blockchain Evolve Digital Advertising? - Coffee with CIS - Latest News & Articles

How Will Blockchain Evolve Digital Advertising?

Regardless of the fall in 2018 of last year's cryptocurrency bubble, blockchain still remains among the very talked-about new technologies. Many believe blockchain established platforms may fundamentally transform key industries, especially financial services and worldwide trade. But how can blockchain affect digital advertisements? Like machine learning, can it be used to improve current systems? Or will it be a disruptive threat to the present status quo? What type of issues can it potentially resolve? To put this, let's examine three different illustrations of new entrants in the space that are aiming for various degrees of disruption.

A Review Of The Basics

First, let’s review the fundamentals. The blockchain is a distributed database which comprises a continuing ledger. What makes them fresh is that the entries in the ledger are immutable, cryptographically secured, and are supported by collective actions rather than by a central authority. Without relying upon a single trusted third party, all these intricate networks and systems can operate with increased transparency, responsibility, and certainty.

For digital advertising, a $200 billion business that now loses up to 10% of its total earnings to fraud, whatever could increase transparency and trust is a good thing. Especially for programmatic advertising, where information is shared via multiple platforms and networks working as middlemen, better tools to weed out fraud and assess the performance of advertising campaigns could be a massive boon to entrepreneurs as well as their representatives.

A Disruption or Cure-All?

Let’s discuss some original digital advertising problems and their solutions developed with blockchain.

One of the most pervasive issues for today's programmatic players is slow payment, especially for individual SSPs and DSPs who have less leverage with bureaus. Bid reconciliation between supply and demand side platforms adds to the downturn in payment flows. A startup attacking this dilemma is FusionSeven. They're utilizing a blockchain to boost the reconciliation of programmatic supply chains, something which today can be still done manually.

This could fix a real pain stage and is a good instance of how blockchain can possibly aid in improving the existing system instead of disrupting it. FusionSeven is smart to apply blockchain to reconciliation instead of obligations because ad industry participants continue to be somewhat skeptical and resistant to the usage of cryptocurrencies.

Another, more specific strategy of employing blockchain to a significant current problem -- fraud -- is that the one being obtained by MetaX using its AdChain platform. As I have written about earlier, fraud is the single largest problem in the business, and one of the easiest types of fraud is to make a bogus domain and purchase bot traffic to create advertising sales. Marketers and agencies often rely upon whitelists of validated publishers to reduce the probability of serving ads on fraudulent sites. Such whitelists are generated by anti-fraud providers, who are trusted to confirm and upgrade them. But what if you could harness the collective experience of the entire industry to create a master whitelist that players can take part in validating?

That's the notion behind AdChain, That's the first working example of a Token Curated Registry or TCR. A TCR is a concept which illustrates blockchains can be used to construct decentralized networks that incentivize mutually beneficial outcomes amongst participants. AdChain's TCR is organized by using components, units of value which can be staked, won and gained by those who take part in voting and counsel on publishers to be contained at the whitelist.

Any type of participant could weigh in on the validity of this publication, but by requiring them to have"skin in the game" in the kind of tokens, the machine was made to apply honest involvement. The objective is to leverage the"wisdom of the audience" in building a comprehensive collection of those publishers that a big and varied cohort of industry peers expressing valid. It's still too early to know if it will be a success, but AdChain represents a truly innovative method of attacking among the most pervasive types of fraud currently plaguing our business.

In its current incarnation, AdChain appears to be much more beneficial than tumultuous. Much like FusionSeven, it focuses on one specific pain point of the current system and uses a blockchain to come up with an alternative. Another token-based platform with significant traction has a far more ambitious aim: how to revamp the entire system of the advertising is absorbed and monetized on the internet. That is the mission of the high-profile group supporting the Brave browser along with the Simple Attention Token (BAT).

Started by Brendan Eich, creator of JavaScript and co-founder of both Mozilla and Firefox, the BAT digital advertising platform begins by fixing problems of the current users: notably privacy. The Brave browser is a somewhat new type of internet browser which prevents all ads from being served and cubes all trackers. It prevents consumer information from being accessed by third parties, and it does not store user information on its own cloud servers. In addition to improved privacy and protection from malware, users gain from the rate. With no ads, web pages load much faster -- 8 times faster for the mobile web. People today seem to like it--as of last month, so the Brave browser had been downloaded over 10 million times, and now there are more than 4 million monthly active users (MAU). The system also offers 26,000 writer accounts.

That is true traction, but how can it turn into an advertising platform? Brave users may opt-in to find advertisements -- in a separate tab. If the user sees the ad they're rewarded -- with 70% of the earnings going to the user. If the ad has been served on a publisher page the publisher gets 70% of the revenue, with the consumer and the BAT platform dividing the rest. The revenue is paid at BAT tokens. The components are a component of account that measure is the attention a user pays into an ad. If this ad is viewed directly, the consumer is paid for their attention. It's a revolutionary idea that essentially makes the consumer the fundamental intermediary, eliminating the programs which currently automate the procedure by which ads are targeted, served and consumed. Another interesting part of the design is that customers can use the tokens they earn to pay publishers and content creators of those websites they like. Or they could finally redeem their tokens for money since the BAT Assets are publicly traded on exchanges. The really disruptive nature of the BAT system is that it puts the control and agency of the way that advertisements are consumed into the control of the consumer.

The BAT platform subsequently is nothing less than the entirely new means of monetizing the ad-supported net. Whether it will work or not remains to be viewed. I am somewhat skeptical that the system will get traction among premium publishers, especially in the long run once the BAT tokens continue to be subject to great volatility vis a vis fiat money. It appears far more probable the BAT tokens might be a terrific way for users to benefit microsites, influencers, and bloggers with little payments, such as, for instance, a hybrid ad-supported version of Patreon. Either way, BAT represents the most ambitious application of blockchain technology in the marketing arena, and it will be interesting to track its progress. Watch this space!