Anyone who’s had to sift through AdTech’s avalanche of acronyms knows that this ecosystem is messy. From SSPs, DSPs, DMPs, to verification providers and more, each step in the transaction between advertiser and publisher adds complication, increases data loss, and raises the potential for fraud.
That’s why blockchain has earned such interest from the industry. By promising to simplify the supply chain and provide more transparency into each transaction, blockchain appears poised to solve the pressing problems that both advertisers and publishers face. While the technology holds plenty of promise, these are the early days.
Still, there are steps we can take to begin laying a foundation for the future.
Establishing an Immutable Identity
One of the major shifts that will come with blockchain technology is the concept of an immutable identity. This will apply to both consumers and to businesses as they become more comfortable with using the concept of a blockchain ‘wallet’ to manage and store transactions.
The ‘wallet’ concept in blockchain is rooted in asymmetric cryptography, which allows for both authentication and encryption of information. A user on any given blockchain has both a private and (mathematically-related) public key. While the private key is held secret, the key has the ability to digitally sign any transaction (just like one would sign a physical document) and authorize a transaction – sending Bitcoin to another user, for example.
Miners in a blockchain network attempt to authenticate transactions using these related public keys, verifying they truly are the authorized user – again, say, sending Bitcoin. Once an identity is confirmed, the transaction is added to the public ledger, and the cryptocurrency changes hands.
Why It Matters to AdTech
By establishing immutable identities with unique private keys and mathematically-related public keys, transactions can be authenticated through real math, not probability. In advertising, this matters because we can finally use this type of technology to bring real security to each media transaction.
For example, if publishers are given a private and public key, we can root-out domain spoofing once and for all. On a larger scale, when all companies in the ecosystem have immutable identities within the same framework or common blockchain, we may also use this technology to solve the accounting and payment discrepancies which, today, take up excessive operational time.
True Supply Path Optimization
While the IAB’s ads.txt initiative attempts to streamline the supply chain by having publishers publicly declare their partners, a text file cannot fully capture the complex programmatic ecosystem. Providing a universal identity, however, will likely also lead to a more efficient supply chain – while still allowing for an open market.
For example, here’s a video of a single page load on a publisher's site — with each node representing an HTTP transaction.
In any given page load, a publisher’s ad server will call many SSPs which call different DSPs which call different SSPs all in an effort to find the most value for a single ad placement. While the ad chains are complex, giving each platform and player a distinct, traceable identity will bring transparency to the complexity – without collapsing an open market. No matter the complexity within each, transactions will be validated and verified through real authentication technology.
This allows publishers to maintain privacy regarding their partners (including maintaining maximum revenue), while simultaneously enabling buyers certainty that they are buying legitimate, authenticated inventory.
The Starting Point
While the industry and the IAB still need to establish standards and currencies around blockchain, we can start by establishing public and private keys for each business entity in the advertising supply chain – advertisers, agencies, publishers and partners alike. This will establish a first step toward security, and will enable distributed ledgers and blockchain wallets to be built around this initial identity concept.
A sender of a certified letter doesn’t care how many post offices it stopped at along the way, as long as it ended up in the hands of the intended recipient; advertising transactions should function in the same way. Blockchain provides our industry the opportunity to do this for the first time, and will bring with it a new technological maturity to media trading.
Manny Puentes is an experienced executive leader in the digital advertising and software industries. Puentes is the founder of Boulder-based startup Rebel AI. Rebel AI secures digital advertising and protects publisher identity and brand spend using machine learning, blockchain, and real-time encryption technologies. With more than 20 years’ experience in digital advertising, Puentes has led engineering and product teams to build enterprise-scaled platforms for digital media trading by leveraging specialties in real-time bidding, data pipeline architecture, natural language processing, and machine learning.
You may have heard the term “blockchain technology” before, in reference to Bitcoin and other cryptocurrencies. For the uninitiated, the term might seem abstract with little real meaning on the surface. However, blockchain technology is a critical element of cryptocurrencies — without it, digital currencies like Bitcoin would not exist.
Just three months into 2018 blockchain has emerged as one of the most over-used buzzwords in the digital industry and beyond. Terminology around the tech has reached saturation point and with SXSW, Advertising Week Europe and Cannes Lions on the horizon the hype isn’t going anywhere – here The Drum finds out how to separate the buzz from the BS.
Blockchain has been positioned as the ultimate solution to the many faces of fraud in MarTech and AdTech. Within the industry, a bright promise of a decentralized future has led to a spurt of blockchain initiatives.
For many years marketers have been left to deal with the pressing issues of bot-traffic mixed with spoofed domains… This has resulted in a huge headache for everyone involved.
- Marketers lost $7.2 billion to digital ad fraud in 2016 – WhiteOps
- Click fraud is currently growing at 50% per year – The Australian
Bot- vs. Human-Traffic Fraud:
The two major groups of fraud in the industry.
- Bot-Traffic Fraud: Includes all non-human traffic types, designed to create fake impressions and fake leads.
- Human-Traffic Fraud: More complicated issue dealing with real users who generate fraudulent impressions.
This is where blockchain can step in, as it’s intended to deal with both types of fraudulent activity. The main principle behind this decentralized system and blockchain is to minimize and eliminate the core problem. Through an open access ledger, there are no intermediaries, i.e., no leeway for fraudsters. The ledger is intended to track the journey of an ad impression. Blockchain implies complete transparency, providing a way to share data.
So, is the fraud dilemma is solved?
In short, not quite. The buzz around blockchain has created a completely new issue – educational gap fraud.
Educational Gap Fraud?
The hype around blockchain, along with a general lack of knowledge, has raised education gap fraud. PR teams tend to use the term “blockchain” without a second thought; as result this has led to industry-wide confusion. Marketers are interested in blockchain, yet they don’t see the scope of possible applications, or the potential return. The overarching conclusion is that the industry doesn’t know how blockchain works.
The IAB Tech Lab presents an Ethereum blockchain-powered initiative in the form of an ads.txt utility – a major step forward. There’s no doubt that blockchain will play a role in bringing AdTech to a new level of transparency. Yet, questions persist:
- Why does the industry need to make the ecosystem even more sophisticated with blockchain?
- Who is going to pay for these new transactions? There are already approaches where no one needs to pay for transactions.
While blockchain is positioned to solve for bot-traffic and human-traffic fraud, educational gap fraud will be conquered only with increased education in the industry.
There are already solutions being implemented to combat these issues. There have been a rise in ICO startups and companies offering ready to use blockchain solutions. Companies should strive to grow business with experiments that should be inexpensive — no struggle with endless code lines.
The IAB has already created a Working Group: Blockchain for Advertising to develop educational guidelines for the potential uses of blockchain. Currently, the group is working on setting priorities, establishing best practices and core standards.
The Bottom Line
Question everything “blockchain.” SmartyAds starts by asking our clients who believe they need a blockchain solution: Why do they think they need blockchain? In the end, it’s less about the tech and more about a problem that needs to be solved. Although decentralization is a great idea, there are few cases when it’s truly needed where it can be applied correctly and for the good of the task — not for the good of early dream-sellers’ successes.
When it comes to dealing with fraud — blockchain is the best tech. However, unless there is industry-wide education in which all parties get involved within a working blockchain system, the full benefits of the tech will not be achieved. Nevertheless, the perks of implementing blockchain in a diverse digital advertising age are visible and beneficial.
Ivan Guzenko is the CEO and founder of SmartyAds, which joined the AdTech revolution 12 years ago. Being half-tech and half-business minded — Guzenko is passionate about looking for the next big thing in the industry. Guzenko is a strong believer in AI, cognitive learning, and 360 automation approach that will connect the dots between the buyer and the seller — with no middlemen. Guzenko entered the blockchain industry at 2013 and is an active member in the blockchain community. Guzenko introduced and launched the first blockchain-based future trending exchange prototype, 2 years ago at AdTech Israel and beta-launched the product in 2017 for the APAC.
Disclaimer: Guest blogs express the thoughts and opinions of authors from across the MadTech Industry; content does not necessarily reflect the opinions or viewpoints of Industry Index, our officers, or employees.