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Blockchain for digital advertising – Cure-all or Disruption?

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Despite the collapse of the last year's cryptocurrency bubble in 2018, blockchain remains one of the most controversial new technologies. & Nbsp; Many believe that blockchain-based platforms can fundamentally transform important sectors, particularly financial services and global trade. & Nbsp; But how could blockchain influence digital advertising? & Nbsp; How can machine learning be used to improve existing systems? & Nbsp; Or will it be more of a disruptive threat to the current status quo? & Nbsp; What kind of problems can potentially solve? & Nbsp; To decompress this, let's look at three different examples of new entrants in space that target different levels of interruption.

But first, a review of the basics. & Nbsp; Blockchain is a distributed database that includes a current ledger. & Nbsp; What makes them new is that the entries in the ledger are immutable, protected by cryptography and are validated by collective action rather than by a central authority. & Nbsp; Without relying on a single trusted third party, these complex networks and systems can operate with greater transparency, accountability and certainty.

For digital advertising, a $ 200 billion industry that currently loses up to 10% of total revenue for fraud, anything that can increase transparency and trust is a good thing. & Nbsp; Especially for programmatic advertising, where information is shared across multiple platforms and networks that act as intermediaries, better tools to eliminate fraud and measure the performance of advertising campaigns would be a huge advantage for marketers and their agents.

One of the most common problems for today's programmatic players is slow payment, especially for independent SSPs and DSPs that have less influence with agencies. & Nbsp; The reconciliation of offers between the supply and demand platforms adds to the slowdown in payment flows. A startup that attacks this problem is FusionSeven. & Nbsp; & nbsp; They are using a blockchain to automate the reconciliation of programmatic supply chains, which is often still done manually.

This could solve a real sore point and is an example of how blockchain can potentially help improve the existing system rather than interrupt it. & Nbsp; FusionSeven is smart in applying the blockchain to reconciliation rather than payments, because the advertising industry participants are still rather skeptical and resistant to the use of cryptocurrencies.

Another more unique approach of blockchain application to an important current problem – fraud – is that taken by MetaX with its AdChain platform. & Nbsp; As I wrote before, fraud is the biggest problem in the industry and one of the easiest forms of fraud is to create a fake domain and buy bot traffic to generate ad sales. & Nbsp; Marketers and agencies often rely on whitelists of validated publishers to minimize the risk of running ads on fraudulent sites. & Nbsp; These whitelists are generated by anti-fraud services, which trust to validate and update them. & Nbsp; But if I could take advantage of the collective experience of the whole industry to generate a main whitelist that all players can participate in validation?

This is the idea behind AdChain, which is the first working example of a token or TCR healing registry. & Nbsp; A TCR is a concept that illustrates how blockchains can be used to build decentralized networks that incentivize mutually beneficial results among participants. & Nbsp; AdChain's TCR is organized using tokens, value units that can be staked, earned and lost by those who participate in the nomination and vote on publishers to be included in the whitelist.

Any type of participant can evaluate the validity of the publisher, but requesting that they have "skin in the game" as a token, the system is designed to impose honest participation. & Nbsp; The goal is to exploit the "wisdom of the crowd" in building a complete list of those publishers that a large and diverse cohort of industry peers consider legitimate. & Nbsp; & nbsp; It is still too early to know if it will be a success, but AdChain represents a truly innovative approach to attack one of the most pervasive forms of fraud that currently afflict our industry.

In his current incarnation, AdChain seems to be more useful than disruptive. & Nbsp; Like FusionSeven, it focuses on one specific sore point of the current system and uses a blockchain to develop a solution. & Nbsp; Another token-based platform with significant traction has a much more ambitious goal: to renew the whole system of how advertising is consumed and monetized on the Internet. & Nbsp; This is the mission of the powerful team behind the Brave browser and the Basic Attention Token (BAT).

Launched by Brendan Eich, creator of JavaScript and co-founder of Mozilla and Firefox, the BAT digital advertising platform begins by addressing the problems of today's users: privacy in particular. & Nbsp; & nbsp; The Brave browser is a new type of web browser that prevents all ads from showing and blocks all trackers. & Nbsp; It prevents third party access to user data and does not store user data on its cloud servers. & Nbsp; In addition to improving privacy and malware protection, users benefit from speed. & Nbsp; Without ads, web pages are loaded much faster, 8 times faster for mobile web. & Nbsp; It seems like people like it: since last month, the Brave browser has been downloaded over 10 million times, and now there are more than 4 million monthly active users (MAUs). & Nbsp; The platform also has 26,000 publisher accounts.

This is a real pull, but how does it become an advertising platform? & Nbsp; Brave users can choose to view ads in a separate tab. & Nbsp; If the user views the ad, he is rewarded with 70% of user revenue. & Nbsp; If the ad is published on a publisher page, the publisher gets 70% of the revenue, with the user and the BAT platform that subdivides the rest. & Nbsp; Revenue is paid in BAT token. & Nbsp; Tokens are a unit of account that measures the attention that a user pays to an ad. & Nbsp; If this ad is displayed directly, the user is paid for his attention. & Nbsp; It is a revolutionary idea that essentially makes the user the central intermediary, eliminating the platforms that now automate the process by which ads are targeted, served and consumed. & Nbsp; Another interesting aspect of the model is that consumers can use the tokens they earn to pay publishers and content creators of the sites they prefer. & Nbsp; Or they can redeem their tokens in cash, as BAT tokens are traded openly on the stock exchange. & Nbsp; The truly disruptive nature of the BAT platform is that it places control and the agency on how ads are consumed in the hands of the user.

The BAT platform, therefore, is nothing more than a completely new way of monetizing the internet supported by advertising. & Nbsp; It remains to be seen whether it will work or not. & Nbsp; First, I am rather skeptical that the system will gain ground among premium publishers, especially in the short term, when BAT tokens are still subject to great volatility compared to an official currency. & Nbsp; It seems much more likely that BAT tokens can be a great way for users to reward microsites, influencers and bloggers with small payments, like a hybrid version of advertising-supported Patreon. & Nbsp; In any case, BAT is the most ambitious application of blockchain technology in the advertising arena, and it will be fascinating to follow its progress. & Nbsp; Look at this space!

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Despite the collapse of the last year's cryptocurrency bubble in 2018, blockchain remains one of the most controversial new technologies. Many believe that blockchain-based platforms can fundamentally transform important sectors, particularly financial services and global trade. But how could blockchain influence digital advertising? How can machine learning be used to improve existing systems? Or will it be more of a disruptive threat to the current status quo? What kind of problems can potentially solve? To decompress this, let's look at three different examples of new entrants in space that target different levels of interruption.

But first, a review of the basics. Blockchain is a distributed database that includes a current ledger. What makes them new is that the entries in the ledger are immutable, protected by cryptography and are validated by collective action rather than by a central authority. Without relying on a single trusted third party, these complex networks and systems can operate with greater transparency, accountability and certainty.

For digital advertising, a $ 200 billion industry that currently loses up to 10% of its total revenue for fraud, anything that can increase transparency and trust is a good thing. Especially for programmatic advertising, where information is shared across multiple platforms and networks that act as intermediaries, better tools to eliminate fraud and measure the performance of advertising campaigns would be a huge advantage for marketers and their agents.

One of the most common problems for today's programmatic players is slow payment, especially for independent SSPs and DSPs that have less influence with agencies. The reconciliation of offers between the supply and demand platforms adds to the slowdown in payment flows. A startup that attacks this problem is FusionSeven. They are using a blockchain to automate the reconciliation of programmatic supply chains, which is often still done manually.

This could solve a real sore point and is an example of how blockchain can potentially help improve the existing system rather than interrupt it. FusionSeven is smart in applying the blockchain to reconciliation rather than payments, because the advertising industry participants are still rather skeptical and resistant to the use of cryptocurrencies.

Another more unique approach of blockchain application to a major current problem – fraud – is what is being taken by MetaX with its AdChain platform. As I wrote before, fraud is the biggest problem in the industry, and one of the easiest forms of fraud is to create a fake domain and buy bot traffic to generate ad sales. Marketers and agencies often rely on whitelists of validated publishers to minimize the risk of running ads on fraudulent sites. These whitelists are generated by anti-fraud services, which trust to validate and update them. But if I could take advantage of the collective experience of the whole industry to generate a main whitelist that all players can participate in validation?

This is the idea behind AdChain, which is the first working example of a token or TCR registry. A TCR is a concept that illustrates how blockchains can be used to build decentralized networks that incentivize mutually beneficial results among participants. AdChain's TCR is organized using tokens, value units that can be staked, earned and lost by those who participate in the nomination and vote on publishers to be included in the whitelist.

Any type of participant can evaluate the validity of the publisher, but requesting that they have "skin in the game" as a token, the system is designed to impose honest participation. The goal is to exploit the "wisdom of the crowd" in building a complete list of those publishers that a large and varied cohort of industry colleagues consider legitimate. It is still too early to know if it will be a success, but AdChain represents a truly innovative approach to attack one of the most pervasive forms of fraud that currently afflict our industry.

In his current incarnation, AdChain seems to be more useful than disruptive. Like FusionSeven, it focuses on one specific sore point of the current system and uses a blockchain to develop a solution. Another token-based platform with significant traction has a much more ambitious goal: to renew the whole system of how advertising is consumed and monetized on the Internet. This is the mission of the powerful team behind the Brave browser and the Basic Attention Token (BAT).

Launched by Brendan Eich, creator of JavaScript and co-founder of Mozilla and Firefox, the BAT digital advertising platform begins by addressing the problems of today's users: in particular privacy. The Brave browser is a new type of web browser that prevents all ads from showing and blocks all trackers. It prevents third party access to user data and does not store user data on its cloud servers. In addition to greater privacy and malware protection, users benefit from speed. Without ads, web pages are loaded much faster, 8 times faster for mobile web. It seems like people like it: since last month, the Brave browser has been downloaded over 10 million times, and now there are more than 4 million monthly active users (MAUs). The platform also has 26,000 publisher accounts.

This is a real pull, but how does it become an advertising platform? Brave users can choose to view ads in a separate tab. If the user views the ad, it is rewarded with 70% of the user's revenue. If the ad is published on a publisher page, the publisher receives 70% of the revenue, with the user and the BAT platform that divides the rest. Revenue is paid in BAT token. Tokens are a unit of account that measures the attention that a user pays to an ad. If this ad is displayed directly, the user is paid for his attention. It is a revolutionary idea that essentially makes the user the central intermediary, eliminating the platforms that now automate the process by which ads are targeted, served and consumed. Another interesting aspect of the model is that consumers can use the tokens they earn to pay publishers and content creators of the sites they prefer. Or they can redeem their cash tokens, as BAT tokens are traded openly on the stock exchange. The truly disruptive nature of the BAT platform is that it places control and the agency on how ads are consumed in the hands of the user.

The BAT platform, therefore, is nothing more than a completely new way of monetizing the internet supported by advertising. It remains to be seen whether it will work or not. As far as I'm concerned, I'm a little skeptical that the system will gain ground among premium publishers, especially in the short term, when BAT tokens are still subject to strong volatility compared to an official currency. It seems much more likely that BAT tokens can be a great way for users to reward microsites, influencers and bloggers with small payments, like a hybrid version of Patreon supported by advertisements. In any case, BAT is the most ambitious application of blockchain technology in the advertising arena, and it will be fascinating to monitor its progress. Look at this space!

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