Blockchain has the potential to disrupt the digital advertising industry by addressing several challenges. It could 1) remove intermediary fees by allowing direct transactions between advertisers and publishers, 2) provide a shared ledger to accurately track impressions and resolve discrepancies, and 3) establish standardized taxonomies and definitions to improve communication. Blockchain's transparency, immutability, and consensus-based approach could also help prevent ad fraud and correctly match consumer identities and data across the industry.

1. Blockchain offers a way to rationalise multiple
aspects of the new advertising experience and
responds to the specific challenges faced by the
media industry, while also contributing to a fairer
and more accountable environment.
6 problematic challenges in the media
advertising industry that Blockchain
could end.
1. No more intermediary fees
About 47%1
of publishers’ revenue is currently
being lost to multiple intermediaries when processing
the ad through the programmatic value chain.
A Blockchain peer-to-peer model would allow
advertisers to directly and simultaneously deliver a
single request to all publishers, thus removing any
How Blockchain Could
Disrupt the Advertising
Industry
Damien Berger
Head of Strategy & Innovation
Axionable
With the advent of programmatic, the media industry has experienced
dramatic changes in terms of ad volume, player numbers and
technologies. Blockchain, while still at a developmental stage, is one of
these innovative technologies which could definitely trigger a genuine
paradigm shift in the advertising business.
need for intermediaries. This would result in higher
profitability for both publishers and advertisers
thanks to lower delivery costs.
2. Accurate accounting between
intermediaries
When publishers and ad serving platforms, ad
measurement or ad verification tools try to consolidate
their impressions, it often leads to discrepancies and
unsatisfying compromises.
With Blockchain, every impression is recorded in
a shared ledger, solving the problem of tedious
reconciliations.
3. Standardized taxonomies
At least two forms of taxonomy could be positively
affected by Blockchain. Firstly, brand designation: at
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2. “Ad fraud will represent an
estimated $19 billion loss in
20182
for advertisers, of which
63% is driven by video ad fraud3
and around 20% is attributed
to OTT.4
the moment a brand can be recorded under different
names when dealing with a partner, which is not
able to efficiently reconcile information, for example,
from “CocaCola” and “CocaColaCo”. Secondly, the
audience taxonomy for vendors, sellers and partners
rarely matches: the same information might be
called “HEADCOUNT” in one place, and “Household
Head Count” in another. Blockchain enables a
consensus-based taxonomy, resulting in much more
fluent and efficient communication between
ad-tech players.
4. Ad fraud prevention
Ad fraud will represent an estimated $19 billion loss in
20182
for advertisers, of which 63% is driven by video
ad fraud3
and around 20% is attributed to OTT.4
→
SHARED LEDGER
One single truth deployed,
decentralized and easily
auditable
SECURED
Security of identity
and ownership
guaranteed
SMART CONTRACTS
Transactions
automatically triggered
by chosen events
CONSENSUS
Immutability guaranteed
by a consensual method
of approval
4 PRINCIPLES OF BLOCKCHAIN WHICH
COULD CONSIDERABLY BENEFIT AN ADVERTISING INDUSTRY IN DESPERATE
NEED OF DISINTERMEDIATION, CONTROL, TRANSPARENCY AND SECURITY
TVKEYFACTS2018161

3. aggregating multiple individual channels would
be laborious, too costly and too challenging
for smaller advertisers.
A Blockchain-based advertising marketplace
completely disrupts this paradigm by moving the
current advertising channels out of a silo: in a
Blockchain open market all publishers and
advertisers are just one single request away from
each other. Favouring one channel over another
is meaningless because they are all accessible
at once. Blockchain thus offers brands a straight­
forward and competitive alternative to the duopoly’s
as-yet unrivalled reach.
Promising use cases focus on video
advertising rather than display
While display and video advertising work very
similarly, the latter presents some structural features
which make it an even better fit for Blockchain
technology.
Through its transparency, immutability and its
consensual ledger, a Blockchain-based environment
is fraudless by design.
5. Consumers’ identity and data
connection
Correctly reconciling data with a specific user ID is a
complex process, given that IDs vary across the
different providers of the programmatic value chain.
By relying on a unique and anonymous ID,
Blockchain offers a 100%-identity match, allowing
for the perfect reconciliation of users’ disseminated
data, while also granting secure and open access.
6. Balance Google and Facebook’s
domination over digital advertising
Google and Facebook’s cumulative digital advertis-
ing market share hit a staggering 58.5%5
in 2017.
The main reason is that they offer marketers the
ability to reach vast audiences through their
pro­prietary channels. Achieving similar reaches by
“Numerous
recent projects
have been
launched that
offer the full
value of
Blockchain
technology
to both
publishers and
ad-tech players.
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4. 2. Shared taxonomies, definitions and standards are
a prerequisite to agree on in order to enable “smart
contracts”.
3. The implementation’s success might require adop-
tion and participation from many players in the OTT
ecosystem.
Nevertheless, pros outweigh cons here, and the
video domain seems quite promising. As a result,
numerous recent projects have been launched
that offer the full value of Blockchain technology
to both publishers and ad-tech players: from
intermediaries (Freewheel’s BlockGraphTM), and
innovative browsers or video players (Brave and
Verasity), to completely disruptive marketplaces
(XCHNG or NYIAX).
Sources: 1
Programmatic: Seeing Through the Financial Fog, ANA, 2017; 2
Forrester.
com. (2018). Forrester : Marketing : Poor-Quality Ads Cost Marketers $7.4 Billion
Last Year; 3
WIRE, B. (2017). Juniper Research: Ad Fraud to Cost Advertisers
$19 billion in 2018, Representing 9% of Total Digital Advertising Spend; 4
Loech-
ner, T. (2018). Programmatic video ad fraud: Over 20% of OTT impressions are
invalid. [online] Blog.pixalate.com; 5
eMarketer. (2018).
Data Suggests Surprising Shift: Duopoly Not All-Powerful - eMarketer.
Advantages of implementing Blockchain for
digital video / OTT inventory over display
advertising include:
1. A lower volume of transactions per second which is
more in line with current Blockchain treatment
capacity.
2. Standards and transactional processes are
better established in a market with fewer and better
identified suppliers, leading to easier implementation
and potentially faster deployment. Plus, the content
delivery networks involved in the advertising supply
chain are already shaping a peer-to-peer network.
3. Players’ interest in innovating is fostered by the
youth of the market and the higher profit margins of
video inventories.
However, a few challenges need to be raised and
addressed:
1. Because of these higher margins, convincing
publishers of the benefits of cutting out intermediaries
is not as straightforward as with display advertising.
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