Congratulations! You’ve finally cracked and decided to figure out what blockchain is and, more importantly, why you should care about it as an advertiser. You’ve been putting this moment off for months and now the reckoning is finally upon you.

A Diversified Database

Let’s figure out what blockchain is by first understanding what it is not. Transactions of any kind that took place online prior to blockchain technology occured and were tracked from a centralized point.

For example, to send money online to a relative you have to make the transaction via the bank, a centralized point. The transaction is tracked and processed by the bank, not by you, or your relative, or anyone else. This transaction system is relatively opaque and vulnerable to corruption. The bank, for example, may add fees to the transaction that you have no knowledge of and that is limited in accessibility. Banks, am I right?

Transactions often transpire over a network of these opaque centralized points. In digital advertising, there are usually numerous points of transaction before an an ad goes from brand to publisher. These points include demand-side platforms (DSPs), supply-side platforms (SSPs), data-management platforms (DMPs), real-time bidding (RTB) and so many more. Each of these transaction points is limited in transparency. This opaqueness in part allows for piracy to flourish in the digital ad supply chain.

Transparency, Durability, and Autonomy

Blockchain is the opposite of this type of transaction. It is best described as a ledger that records all transactions and interactions in a transparent and chronological way. These transactions are the blocks of blockchain and these blocks cannot be manipulated by an individual party after their occurrence.

The incorruptible nature of blockchain is made possible by the decentralization of the ledger. It is not owned by any one individual, and a transaction in blockchain no longer takes place at a centralized point but at many points that are visible to all members involved in the blockchain. In this sense, the blockchain is public. Anyone can participate in the blockchain simply by downloading the code and starting a local node — the program that validates blocks and transactions — on their system.

There is no longer an issue of trust between two parties, nor is there a need for a third party observer because all transactions are visible and unchangeable after the exchange.

The previous example of the bank looks very different when blockchain is added to the equation. Not only is the transaction of sending money entirely visible to all parties, but the bank would no longer be a necessary part of this equation. Individuals themselves could possess online currency separate from a bank that can be exchanged without an intermediary. And that is how blockchain and Bitcoin are intertwined. Blockchain technology makes cryptocurrency such as Bitcoin possible.

The Impact on Ad Tech

Now — back to the world of advertising, where we were left with a fairly opaque mess of transaction points between a brand and their digital ad placement. Blockchain technology would theoretically make all these transactions transparent and traceable. This could have a tremendous impact on ad fraud as a whole.

“…Everyone will know the source of the fraud. We can solve a lot of fraud issues just with identity. Fraud can’t hide in the opaqueness of the supply chain anymore, because everyone is known.”
Ken Brooks, CEO, MetaX

Where an advertiser may currently be vulnerable to ending up a victim of domain spoofing, blockchain could make this practice obsolete. The advertiser and publisher both agree to the transaction and can see it transpire, which would prevent a fake domain from sneaking in.

“… You can clearly see that the impression did not come from CNN, and you’ll also be able to see the actual information of the domain, like the originating impression event and the referring URL.”
Ken Brooks, CEO, MetaX

This is not to imply that there aren’t current measures being taken to prevent domain spoofing. Ads.txt code helps distinguish a real publisher from a fake one. Additionally, executing high-quality programmatic buys through whitelisted-only websites, as Contobox currently does, does a good job of making ad placements safer.

If you are worried about your ad campaigns becoming public for competitors to come and take a peek, worry no further. Blockchain can allow privacy for the nodes making transactions. The important thing is that all the parties involved in the transactions have visible access to the events of their transaction.

Back to the Future

Sounds pretty dreamy, doesn’t it? Unfortunately, like most dreamy dreams, they don’t quite match the cold and brutal nature of reality.

As it stands now, blockchain technology can only handle a limited amount of ad impressions. Every node on a blockchain needs a complete copy of all transactions and this process demands great processing power. This massive demand means only a fraction of the ad impressions can be served per second as compared to ads served without blockchain technology.

Is it worth investing in anyway? Over half of the tech, media, and telecom industry believe so.

Many of us scoffed at Bitcoin when it first hit mainstream awareness, and look at it now. Or don’t — it may have just crashed.

The challenges presented by blockchain in every industry — not just advertising — are in the early stages still. And like most technology advancements, you either embrace them, or risk getting left behind.

Plans are underway to improve the speed of blockchain, but it will take some dramatic technological shifts and leaping over many hurdles hurdles leaped over to make blockchain live up to its potential — which has the power to be revolutionary.

Steve Patrick Adams is a writer, illustrator, and animator with a glowing love of all things Ad Tech. He's been a digital media producer since 2010 when he got his start working for Bite (Blue Ant Media) and has since worked for a variety of publishers including CBC Comedy, Mashable, and IAB Canada.