What is Blockchain and how can be applied in programmatic advertising

What is blockchain?

It is a decentralized record book of all operations or transactions that are carried out between members of a network, computers connected to each other as on the Internet. This means that it is not only in one place, at the same time it is found in many different places.

Some computers act as miners to group transactions into data sets called blocks that link together to form nodes or chains. The work of the miners is to provide security and solve problems that arise, keeping everything safe and functional. To solve it, they use codes and programming to make the processes mathematically proven, therefore, legitimate.

In short, it is a decentralized processing, registration and verification system that keeps the original data and records the changes that are made; once the information is recorded, it can no longer be modified.

Its innovation lies in that it is a shared system that is not managed by an entity or company alone.

Blockchain applications to prevent advertising fraud

Although the best known are the Bitcoins or crypto-currencies, their use can be extended to the programmatic purchase to provide transparency and reliability that the market requires, combating bot traffic and protecting brands from unwanted content.

Industry organizations such as the Interactive Advertisng Bureau and the Data & Marketing Association are exploring the possibilities of blockchain for advertisers.

Other companies have developed adChain, a carefully selected whitelist of content publishers and advertisers that will use blockchain to analyze inventory sources with a democratized voting system.

AdEx has been created as an exchange platform for ads on blockchain as well as Brave that deals with advertising and micro-payments, while MadHive is looking for a space in Over The Top (television and movies over the Internet that do not require subscription to a provider of traditional television).

The possibilities are enormous but there are still challenges to solve before the technology becomes common use as the speed to use it in real-time auctions, which are still very fast for the blockchain technology to update them in time.

Decentralized validation

Since the data stored in the blockchain always maintains its original state, it can not be altered in any way and by being decentralized it prevents hackers or independent entities from manipulating the records.

These features make it useful for preventing ad fraud when waves of bots imitate identities, alter data and inflate clicks or ad views.

Although the fight against bots is an arms race as fraudsters are increasingly improving their bots so that they are able to imitate human behavior so that impressions, clicks and interactions do not raise suspicions.

One way to protect yourself is for advertisers to identify and reward IT experts with tokens (a kind of vouchers that can be exchanged for products or services for carriers) to focus on caring for systems and detecting bots.

Prevent false impressions

The platform can use machine learning and device information such as the IP address to perform an analysis based on a complex procedure to capture signals of user behavior and interactions; to indicate and interpret them so that the administrators of the advertising sites can prevent the bots from recording false impressions and conversions.

Data management

Being the data the fuel within the ecosystem of programmatic advertising, from the measurements to the segmentation and addressing of the announcements, who has quality and reliable data, will take the lead to the competition.

Comcast is already preparing a blockchain-based analysis and discovery platform that seeks to improve the performance of premium video inventory ads, which will result in better planning, addressing, execution and measurement on multiple screens (multiple devices).

With such a solution, advertisers and programmers will be able to find datasets more effectively and tailored to build and execute media plans on audience segments that allow them to direct advertising accurately and efficiently through all TV users. pay and demand; and benefit from better reports, metrics and attribution results.

However, the privacy of the data is an issue that must be taken care of and therefore, with the blockchain platforms, the data can not be compromised or misused, it may be feasible to ask questions and derive analyzes without having direct access to the data or take possession of them.

Ad selection and interest generation

A permanent objective of programmatic advertising and digital marketing in general is to be able to have methods and data that allow them to deliver the right message to the right user at the right time and that results in an action.

An example of a solution is what BitClave proposes with its activity tokens for consumers, which are acquired by them when they add their data to the blockchain. If you search through the BitClave decentralized engine, businesses that want to reach them will have to compensate.

According to the founders of BitClave, “Internet giants provide value today by offering free services, made possible by advertising, they should not be the only ones that benefit financially from the data that their users give away.” Its decentralized search engine helps you find what you’re looking for and at the same time rewards you for your data, making third-party ad networks unnecessary.

Although it is still about projects in testing phase, but they are laying the foundations for what could be done with blockchain in this way.

Fraud prevention

To avoid embezzlement due to inadequate registration of participants or inventory that does not correspond to what they offer (display ads instead of video, which is more expensive), the use of blockchain offers an alternative.

Similar to the IAB proposal for the registration of participants using ads.txt, which is a simple text file listing the entities authorized to sell inventory but using the blockchain capabilities.

With ads.txt plus, that uses a robust verification and registration system that maintains and updates the records of publishers and intermediaries that are accredited as fraud-free is being considered.

Buy & sell of media

Seeking that the purchase-sale of media is carried out with fewer intermediaries, the use of blockchain can allow publishers and advertisers to do so, even directly.

The idea is to use smart contracts in blockchain, in which the terms and conditions are established. You can even add other layers of verification or compliance by third parties within the network as providers of measurements, classifications or to provide payments.

The payment administrator would be responsible for releasing them according to the terms of the contracts. Extra incentives could be added to publishers such as accelerated payment for complying with contracts, which would motivate publishers to deliver what was requested more quickly.

The challenge

The main obstacle with blockchain will be its adoption as a standard, for it to work it will have to be used by most of the participants of the industry, otherwise it will remain as a good attempt only.

The main detractors to use it will be to a large extent the intermediaries, agencies and technology providers that would see their business models threatened by the use of blockchain.

The other great barrier to blockchain is that it is still a technology that is being explored, it has great prospects of functioning but its potential and results are yet to be seen.