Blockchain technology in advertising

By Jennifer Noble | Aug 07, 2017

Blockchain technology ushers in a revolution of how people perform activities in most industries. The finance sector has been hit hard by this upheaval in the advent of Bitcoin currency. A study shows that 15% of banks and 14% of other financial institutions intend to incorporate the currency wholly into their operations. As such, clients should brace themselves for commercial-based blockchain services with the adoption rates expected to hit a 65% rate in three years. Bitcoin accounts for only one application of this technology; marketers, brands, and agencies are now incorporating blockchain in advertising. Its distributed nature, security features, and smart contract functionality make blockchain the long-awaited solution to the transparency problems in the advertising industry.


What is Blockchain?


It is a global database that anyone with internet connection can access. Unlike conventional databases where big companies retain proprietary rights, blockchain does not belong to anyone. As such, significant amounts of data can be transmitted and added without compromising on its security. The quantities of information that are also known as blocks can't be altered, making blockchain an accurate source of truth. It has a network of people monitoring, making it impossible to cheat the system using fake documents, information, or other malicious transactions. This feature allows full acceptance of the technology in the finance, healthcare, and now in the advertising industry.


How it Works


To participate in the Blockchain network, users have to operate a software client that connects them to that particular blockchain. The software client allows users to record information and provides computing power to the network to add new blocks of files. Participants can only create the new blocks of records after solving complex mathematical problems known as Cryptography. The network of other users collectively maintains accurate and transparent ledgers of secure online records, eliminating the need for a trusted middleman or third party.

Blockchain Applications in Advertising


Critics argue that blockchain technology in advertising is in its early stages and remain skeptical about adopting it. Early adopters, however, will tell you how they have saved a fortune that was often siphoned by middlemen. Blockchain technology solves critical problems that advertisers face.



With the technology, it is possible to trace the originators of a digital asset. For advertising, blockchain can be deployed to perform real-time audits of ad delivery and monitor ad placements. It is more like conducting a property search since Blockchain records each transaction involving every digital asset.



Secondly, advertisers can engage customers in new and fascinating ways. The most widely-reported use of blockchain in marketing involved a fashion label that allowed customers to validate a rare collection of handbags and identify who modeled, owned, and originated it.


Protection of Consumer Data

Advertisers also enjoy the benefit of maintaining consumer data in a decentralized manner, which offers security and anonymity not available to agencies.


Blockchain Technology in Programmatic Advertising


While blockchain systems are still on the stages of growth and development, there are a handful of programmatic companies that had already successfully applied this innovative technology at scale. MetaX, Los Angeles-based adtech company, had announced an implementation of the Blockchain technology to secure the digital ad supply chain and solve the problem of the advertising fraud at the protocol level. Alternatively, MadHive is using the blockchain solutions for the first-party data encryption and creating secure gates for the performance data.

Recently another programmatic platform SmartyAds had deployed blockchain-based services into its advertising stack as a part of a comprehensive solution to eliminate third-party intermediaries from the transaction process. The use of digital currency and distributed ledgers allow digital media owners and buyers to reduce transaction fees and trade freely in a more transparent, reliable environment. SmartyAds representatives confirmed that the blockchain technology helps to avoid financial discrepancies due to smart contracts that are self-executed and replicated on the system. The company is already adopting the technology at all levels: brands, agencies, DSPs, ad exchange and publisher’s SSPs.

Additionally, automation and decentralization of these traditional payment processes lead to significant savings of up to 67 million in digital ad spending in the industry. Agencies also get to eliminate the enormous costs associated with back-end operations like settling trades, addressing reconciliations, and maintaining records.


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