What You’re Paying For or How Ads.txt Helps to Fight Adtech Fraud

Considering the amount of advertising online, we’ve all faced a situation when we were misled by ads. Expectation vs reality is fun when you see collections of other people’s pictures experiencing online shopping troubles, like this:

Expectation vs Reality in Online Shopping

However, when you’re the one who is trying to understand where your money is going, the situation might not seem fun. Especially so, when you are buying ads for your business (and the budgets are not small). How to make sure you’re not a victim of advertising technology fraud? IAB Technology Lab offers a simple enough solution: ads.txt implementation.

The Problem

One of the major problems, when one is dealing with programmatic ads, is being tricked by the scam artists and ending up paying for the ad space that you don’t get.

One of the most common scammer tricks is to buy cheap ad space from sites from the low-end of the spectrum, yet advertise it as premium space and charge a much higher price for it. As a result, you might think you’re buying Bloomberg.com ad placement when in reality it’s some WeirdoVillage.biz with an annual audience of 33 users. Not the result you’re looking for.

How often this happens? Google and IAB run secret tests and discovered thousands of fake ads on major exchanges like AppNexus, PubMatic, and even Google’s own AdEx exchange. Whoops.

The Solutions

IAB’s started an initiative to increase transparency regarding programmatic advertising called ads.txt implementation. Basically, it’s a text file that’s published in the site’s root directory with the information on Authorised Digital Sellers (or ADS, which is where the name comes from).

This file creates a public record of sellers and helps buyers to quickly identify who is allowed to handle the ad inventory for which publishers, making it much harder for scammers to sell fake inventory for profit.

For example, here’s a part of Bloomberg’s ads.txt:

google.com, pub-8615378344367221,  DIRECT
google.com, pub-1979187633561026, DIRECT
indexexchange.com, 184795, DIRECT
Appnexus.com, 8355, DIRECT

As a buyer, you can see which sellers you should contact in order to have your ads run on Bloomberg. Also, the ads.txt provides the IDs of the publishers, so you can compare the data you get in your ad reports to the identification numbers of your publishers.

What’s Next?

As of August 2017, out of the top 500 publishers around 7% had already implemented this solution on their platforms. The early adopters include such media giants as The Washington Post, Forbes, The New York Times, Bloomberg, Gizmodo Media Group, and others.

As of November 2017, you can see the stats of ads.txt adoption, pulled from Alexa’s top 10,000 global domains that sell advertising (except Google, Amazon, and Facebook since they don’t sell their inventory to third-parties.)

The rate of ads.txt adoption among Alexa's top 10K publishers

We mentioned above that there are solutions, not just one. Many publishers are waiting for the blockchain technology to change this area in the industry. Indeed, blockchain can help to streamline the data and weed out the fake ads. However, widespread implementation of this technology is still years away and ads.txt is a much simpler and quicker way to protect authenticity.

Also, if you are a publisher, consider implementing this solution on your platform. It doesn’t cost you much (in either time or money) and, in fact, you might actually profit from it since many ad buyers are switching to publishers with ads.txt implemented.

Read also

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How to make a live streaming website

Types of data breaches

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Digital AdTech: The Complete Guide

You might’ve heard the term Ad Tech, but wasn’t sure what it meant. How does it all work, considering the vast data transfers and processes? What are the Ad Tech industry challenges? All about ad campaigns, ad networks, media buying, and more in our article.

In this day and age, the Internet is the ultimate field of opportunities. Just think about it – everything is within a click or two (okay, sometimes, three.) You can do practically anything. Naturally, you can make money on the web – in fact, you can make it out of any user’s move (because duh, why not?)

The whole monetizing frenzy is hitting the fever pitch right now and it important to understand how to “make it” “the right way.” The advertising industry might seem like a logical answer.

Since the digital advertising industry is experiencing a period of bloom due to the increasing amount of time spent by consumers on digital media – it is a logical solution for an issue of monetizing traffic and a sound way of improving interaction with the user on the platforms.


What is Ad Tech?

Adverting Technology (Ad Tech) is an umbrella term that describes systems of analyzing and managing tools for programmatic advertising campaigns. 

It covers the entirety of the ad delivery process from selecting the subject of an ad and its position to choosing its recipient. Ad Tech solutions allow you to see the bigger picture regarding your campaign and lets you make use of it to maximum effect.

Direct benefits of this tight knot of broad array processes are the higher efficiency of operation which means growing brand recognition which leads to increased profits. That indirectly leads to an expansion of interest.

However, there is a catch. Ad Tech is not something you jump on and ride. Digital Advertising is a costly thing and you need to be sure that every dime is doing tick-tick-tick. The whole thing is extremely demanding from technical and logistical points of view. It involves a staggering amount of data and needs enormous computing capacities. Because of that, you need the services of Ad Tech companies who know it inside out and can turn it upside down to get through. In this sense, AdTech companies are some sort of cavalry.

The primary benefit of its use is that it minimizes budget spending and makes the digital marketing strategy much more cost-effective.

In order to make maximum effect from the Ad Technology adjusted campaign, the company needs a system that is specifically designed for its needs. The mechanisms that process and categorize incoming data need to be specified to a tee. It should fit perfectly in order to make the process of managing, delivering, and targeting the adverts as useful as possible. It helps you to make sense of the collected data and put it to use. It finds the links and connects the dots.

Basics of Ad Tech

Ad Tech’s primary field of operation lies in the analysis, managing, and delivering advertisements according to the requirements of the ad. 

The endgame of every campaign is more or less the same – increased effectiveness and growing activity on the used ad space.

In the center of Ad Tech’s operation is the advertising ecosystem that consists of Advertisers, Demand-side platforms, Ad Exchanges, Supply-side platforms, and Publishers. Together they form a loop of ad supply and demand that generates revenue – this is achieved through collecting and processing information on the user activity on a particular platform.

advertising technology in digital advertising campaigns
The importance of user data

Why is user data important for Ad Tech?

It is important to understand that in Ad Tech value of information depends on the way said information is further collected and used. The main source of information in Ad Tech is the consumer. His contribution is technically very simple – it consists of merely hanging around on a certain site. However, it involves a lot of machinery behind the scenes that gather incoming information in one place.

There are two ways of getting data:

  • Third-party – when you buy it from somebody else;
  • First-party – when you gather it on your own;

The endgame is that it refines ad targeting with some fancy data spice – that results in a substantially more inspiring bottom line. Since we still keep getting “Why? Why? Why?” here’s snappy reasoning: actual data taken from actual people (with values, behaviors, attitudes, and attributes) allows delivering product directed to the target audience accordingly and not approximately.

In other words – you don’t snipe with your eyes closed and hands behind your back. But that precious information is not lying around waiting to be picked up. It needs to be collected – and it happens pretty much in the same manner as bees collect nectar.

What kind of user data feeds Ad Tech industry?

What kind of user data feeds the Ad Tech industry?

A thorough study using user tracking (among other things) forms the foundation of an ad campaign. Subsequent reaction of the consumer to the advertising leads to further developments. Not only that but it also helps to calculate the best area for placing ad content.

Among the parameters monitored are:

  • Referring sites – from where the user came from;
  • Overall journey (user experience) on-site – including mouse cursor movement;
  • Events (scrolling, clicks, highlights, media views, other stuff);
  • Search queries;
  • Time of session;
  • Behavior on site:
    • Contextual and thematic preferences to certain topics and pages;
    • Various interactions with the page’s content (downloads, etc);
    • Transitions to another place through links and ads;
  • Demographics (if not blocked or obscured);
  • Consumer’s gear (browser specs, ad-block on or off, etc.);
  • Interaction with ad content;

There can also be direct feedback (comments, etc.), but it is purely optional and usually, it is extremely insufficient.

While gathering these kinds of information can be considered as stretching the limits of user privacy – it also allows to deliver of much more relevant and useful content to the user who makes the case of a more pleasant user experience with a couple of benefits.

Even though that breakdown makes it seem like a relatively little thing – in reality, it is millions upon millions if various events. And that amount of information needs some serious power to be handled properly.

How does Ad Tech manage user data?

How does Ad Tech manage user data?

One of the primary “weapons” used by Ad Tech is retargeting. It is a way of bringing the users back to the site after they left. This method works with showed intentions of the users that were registered by the system. It shows ads connected to it throughout the user’s subsequent journey through the web.

This information helps to makes ads closely connected to the customer’s interest. Usually, it is one of the two – it is either based on the context of a session and the preferences of the user. As a result of accordingly adapted content the value of the ads to the customer increases and so are the chances of his reaction to it.

However, the collected data on its own is unstructured and needs to be sorted out.

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Collected and unstructured data should be sorted out and for that, it is being transferred from the site to the Data Management Platform (DMP). Its purpose is to go through, analyze and categorize incoming data, which helps to segment the audience and optimize the campaign correctly. DMP also ties activity and incoming results of the campaign together into one relatively easy-to-follow interface where it is.

After data is sorted out – it is sent to Ad Server which operates the ads through the ad spaces and directs specific commercials at specific users. That is where retargeting kicks in. Data on user interaction with ads is also being collected and sent to DMP. That allows adjusting the campaign according to incoming results.

The basic scheme of Ad Tech operation looks like this:

  • User activity and behavior on site is being monitored (find out how to make behavioral targeting GDPR-Friendly);
  • Data from the website is being transferred to the Data Management Platform where it is  being sorted out, categorized, and segmented according to set specifications;
  • After that, the segmented data is sent to Ad Server which delivers appropriate and relevant ad content to the user. It may be:
    • Personalized according to user behavior and traits;
    • Contextual – based upon user activity.
  • User activity on the ads is being monitored;
  • Ad Campaign adapts to incoming information and collects the cream of the crop.

If done right – Ad Tech maximizes the efficiency and profits of the campaign.

How does Ad Tech generate revenue?

How does Ad Tech generate revenue?

 Ad Tech ups the stakes considerably by making the process of interacting with ads the part of money-making. It is achieved by the diverse system of monetizing where every player involved gets his cut for his services.

One of the biggest innovations that brought in Ad Tech is a clarification of the balance of responsibilities in the ad campaign. Basically, there are three major players in Ad Tech:

  • Advertisers – the ones with the adverts. DSP is Advertisers middle-man to the Ad Exchange
  • Publishers – the ones with spaces for adverts i.e. ad inventory. SSP is the Publishers middle-man to the Ad Exchange
  • Ad Exchanges – these serve as the mediator between advertisers and publishers. Ad Exchanges operate through DSP and SSP to both sides of the operation. The main purpose is to provide connections, communication to each of them.

Monetization occurs according to the selected business model. Its general operation includes fees divided between involved parties – advertisers, publishers, platforms. In any case – everyone benefits from everyone.

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The most common and effective models are:

  • Cost per impression (CPI) – more often tied with cost per thousand / cost per mile. Preferred by ad publishers more than advertisers. Usually combined with cost per click ratio;
  • Cost per action (CPA) – when the user more directly interacts with ad content i.e. cause conversion. This can be furthered into cost per install which directly deals with consuming the product;
  • Cost per click (CPC) – splits the risk between the publisher and the advertiser. Best used for contextual-based content. CPC later evolved into click-through rate—revenue based on the number of clicks divided by the total number of impressions served throughout the campaign;
  • Cost per lead (CPL) – when ad content brings contacts with consumers.
Advertising Technology Conclusion

Advertising Technology: in conclusion

One of the significant advantages of using Ad Tech is that it allows integrating the whole toolset into a single system. Numerous automated processes and conjunct workflows enable more precise and expedient audience targeting. Because of that, it is possible to collect more diverse data that will result in highly relevant and accurate inciting ads.

There is no magic behind Ad Tech – it all depends on skills and ability to use them correctly. The scope of operations is leaning on tried and tested solutions and reliable platforms to keep the information safe from leaking and to stay away from fraud.

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What is Data Management Platform (DMP) and How Does It Work

In this day and age, information is, probably, one of the most valuable things in the world. No wonder — it is the stuff dreams are made of, something of a new universal currency. However, one should know how to use it in order to make it work for his own benefit. 

There is no industry where this is more apparent than in the advertising industry and AdTech in particular, where competition is so tough one false move can derail everything. This is where Data Management Platforms (DMP) come in and work some sweet AdTech Magic.

The thing is – modern advertising is extremely complex and multi-faceted operation. Another important thing to note is that the ad industry is massive. Not just very big, but Godzilla-like imposing and intimidating massive. Every little thing counts and makes difference. There are many moving parts involved and all of them are equally important.

Modern DMP’s are required to process millions upon millions of events in a short time span. Just think about that number — it is ridiculous. And it takes a significant computational capacity and very flexible scalability to make it all click.

But first, let’s sort things out.

What is a Data Management Platform (DMP)?

Data Management Platform (DMP for short) is a type of centralized tech platform that gathers data from a set of sources, segments it to predetermined categories, and further transfers in order to attain certain goals of a marketing campaign.

To put it simply, the Data Management Platform is one of the foundations of Ad Tech operation. It is one big dashboard of tools that gives you the big picture of what is going on with your efforts and provides instruments to turn the tide to your benefit.

DMP control panel is basically a war room where you can check the status of the situation and plan your next moves.

DMP and AdTech: How do they work together?

The primary purpose of DMP in Ad Tech operation is to keep a firm grasp on the proceedings of the campaign. The use of information gathered by the Data Management Platform provides additional agility to the Ad Tech operation — it improves the definition of the target audience and subsequent ad distribution.

That gives marketers agility in adjusting the campaign as it goes on according to the target audience’s reactions.

The end result of its DMP process is more efficient and precise targeting to the target audience that generates conversions that in turn enhance ROI from ad spending. This is a very important thing because gestation and hesitation are rather destructive approaches in marketing.

Here’s what Data Management Platform can handle:

  • Manage and adjust ad campaigns;
  • Provide with stats that can help to increase conversion rates, improve user experience, and establish the brand;
  • Make effective use of ad budget with a higher probability of return on investment;
  • Personalize content shown to the users in order to increase the probability of conversion and establish the brand;
  • Study the behavior and preference of the target audience in order to create a credible user profile for more efficient targeting.

What types of data does DMP collect?

Data Management Platform is capable of collecting data from the selected source. All you need to do is to define what kind of information you are interested in.

Basically, a Data Management Platform is attached to the source of information (for example, a website) and gathers information regarding certain user activity.

This information is subsequently merged together into one big picture that can help marketers to understand how to build the campaign and what kinds of approaches will be the most effective with the selected target audience.

All data is divided into first-, second-, third-party. Let’s break it down:

First-party data includes:

  • Web / App data
  • Data coming from the analytics tools (such as Google Analytics)
  • CRM
  • Transaction systems
  • Subscriptions
  • Audience information

Second-party data is exactly the same as first-party except it is given to another company involved in the operation.

Third-party data is collected and segmented independently of the company and later sold to it.

Self-Hosted or Third-Party?

The difference between custom and third-party data management platform is rather peculiar. It all depends on the need of your business operation.

In the case of the third-party solution — you get a full package with a bob and bunny. It is ready-to-use and guaranteed to operate adequately. But there is one very important thing to note. When you implement the third-party solution — you pay for lots of features that might not need at all. That is not exactly cost-effective. In fact, it can actively bleed your marketing budget if the turnaround will be big enough.

A custom solution is a more complicated but more reasonable approach. Sure, you need to do the heavy lifting of developing the foundation. But you develop the platform exactly fitting to the needs of your AdTech operation. Which makes it far more effective and capable of generating rapid ROI. However, in the case of self-hosted DMP you need to find providers of third-party data on your own.

Ways to use DMP for AdTech


Retargeting is a method of delivering relevant advertising content to the users based on a digital footprint and collected user data such as preferences and on-site behavior.

Retargeted ad content is based on the actual interests of the users calculated out of their behavior on the source site. This makes ad content significantly more relevant to the users. That peculiar detail ups the chances of getting those sweet conversions i.e. purchases or downloads.

You can read about it in detail here.

Data Analytics

You can’t build an ad campaign without having a clue of how your target audience perceives your brand, behaves on your websites, and consumes your ad content. That is what Data Analysis is for.

DMP is useful for Data Analytics because of its scope. You get the big picture and thus you can act accordingly. With a steady stream of data going through DMP you can easily spot every little change in behavior, all while discovering trends and preferences, points of drop-offs, and so on.

That gives you a critical advantage as you can adjust on the fly without bouncing off.

Audience Research

Audience Research is such a significant element of Data Analytics that it deserves a separate spot.

The thing is — targeting requires very clearly defines customer identity in order to click. Since users are not bound to use the only type of devices — they are often visiting one place over multiple devices. All those visits can be processed as a separate ones which is not very helpful.

However, with a little help of DMP, you can construct a unified cross-device user profile (AKA single customer view) and target a particular or all platforms he is using. How? DMP matches cookies coming from the user and assigns them to a single profile.

SEO Optimization

Another huge area where the Data Management Platform is extremely useful is SEO optimization. How? The whole audience research thing can be used not only for more efficient delivery of ad content for your internal needs too.

Basically, DMP helps on three SEO fronts:

  1. Content — a better understanding of what your target audience is interested in;
  2. Keyword Research — profiles can help to find more fitting keywords for content;
  3. Link Building — profiles can help to find better spots for guest posts;

Data Monetization

There is also another method of effective use of DMP. You can just gather information and sell it to other companies — i.e. you can be a third-party data provider.

In that case, you don’t need to worry about anything and just maintain a steady flow of data.

How does DMP work?

Data Collection

The initial stage of DMP operation is to collect data from the selected sources (i.e. first-party) and implement data from second and third-parties.

In the case of first-party data, the operation is performed in a variety of methods. Let’s count them down:

  • Tags — with a little help of Tag Manager (Google’s is a fine one) you can insert snippets of code into a website’s pages that will be tracked according to determined function;
  • Cookies via Cookie Syncing — mapping and unifying user’s ID over the multiple platforms
  • Pixel Tracking
  • Integration with second-, third-party data suppliers;

Data segmentation

The next Stage of DMP Operation is Data Segmentation. Once information is gathered — DMP organizes it according to the present taxonomy. It includes a variety of parameters. Some of them involve the user’s personal data, others include data regarding their interaction with monitored entities.

Segmentation taxonomy is wholly dependent on the selected marketing model and includes only those elements that are vital to efficient targeting.

Data Analysis

Once data is segmented, it is processed to construct a clearly defined customer profile for targeting.

Usually, this operation involves an analysis of users’ past activity on-site, their events and impressions (clicks, etc), preferences, and response to ads.

Data transfer

Once information is gathered, segmented, and analyzed — it can be transferred to ad exchanges, Supply-Side Platform (SSP), and Demand-Side Platform (DSP) which in turn will deliver the goods to the advertisers.

This information will help to perform more accurate ad buys during real-time bidding (RTB) operations.

Possible Challenges with DMP


Before the whole data management starts — you need to set up the connection between sources. Your ultimate goal is to maintain a steady transmission of data from multiple sources without missing a beat and stumbling into a mess.

In order to make that happen — you need to be sure that all the sources meet system requirements and are compatible with others.

Dealing with Scalability

DMP is as good as its scaling capacity. That is one element essential to its successful operation. The thing is — standard Ad Tech operations consist of millions upon millions of various events happening on sites. And every single bit of this information must be collected.

And if the system can’t handle such a workload — troubles ensue.

One of the most effective solutions for DMP scalability is to use a cloud platform. The majority of services provide automatic scaling features that will seriously ease up the challenge.

Data Storage

Managing data is one thing. But you also need to store it somewhere and that is a challenge. You have an infinite stream of incoming information. It is constantly collected, processed, segmented, and transferred. You have data in active use and data that was already used. All these things have to be stored safely.

One solution is by having your own server network. It is not exactly cost-effective but it can be.

The much more feasible solution is by maintaining the data in cloud storage. Since you have to pay only for used space — it is more or less cost-effective. It also covers the necessity of maintaining backup storage as the cloud is basically an ultimate backup.

In order to make sense of storage spending, you need to apply a multi-faceted approach. In essence, it is further segmenting of the data according to its current value and relevance. In that case, that challenge lies in a correct definition of time windows for data transfer.

Refining Automation

DMP deals with large quantities of data coming from various sources — that creates a necessity of creating a set of automated scenarios that will handle the operation with its own settings. We’re talking about millions of events per second — there is no chance a human being will be able to deal with it manually.

On the other hand, automation is far more reliable in comparison with the error-prone manual approach.

The challenge comes in determining where automation is necessary and where it might be abundant or ineffective.

Woes of Data Analysis

The thing with Data Analysis is that you have to know what are studying data for in the first place in order to make use of it. If you don’t really know what kind of data you need — you will end shooting in the dark which is not exactly the most effective use of time and money.

In order to understand the most effective and feasible approach to analyzing incoming data, you need to understand the nature of the sources of the data and its credibility. Next, go to audience research which gives you an understanding of target audience attitude, and then comes specification of data segmenting according to audience research.

Each step of the way must be thorough and through and through. The price of insufficient or downright faux data can be utterly devastating to the company.

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Personal Data, Privacy & GDPR

The full adoption of GDPR is a game-changing moment for the Ad-Tech industry.

On one hand, GDPR’s expansion of the definition of the user’s personal data is forcing drastic changes of approaches to deliver ad content. On the other, it is a chance to bring transparency and trust to a rather murky realm of Ad Tech.

In the long run, GDPR will turn Ad Tech’s use of DMP on its head. The thing is — GDPR compliance is not a joke.

Technically, that means you need to ask yourself the following questions:

  1. What kind of data are you going to collect and from what sources?
  2. Where is collected data going to be stored? How long is it going to be stored?
  3. Who will have access to it?
  4. Are third-parties involved in the operation privacy-compliant?

Another important thing is to have a system that will store information about the use of information. That is a critical factor in building a fully transparent and trustworthy operation.


At the moment, Data Management Platforms are one of the most effective ways of delivering quality advertising content to the target audience.

However, DMP is an entity that requires to be handled with care.

If done right, DMP is smooth and precise and greatly helps in keeping the pulse on the proceedings of the marketing campaigns.

We hope this article explained what’s, how’s, and why’s regarding this technology.

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How Does Blockchain Amplify AdTech Industry

Using blockchain, the advertising industry can potentially become more sophisticated. What can we expect from the “ad chain” idea?

Ad Tech is one of those industries that is always in an active search for the next big technological breakthrough. The reasoning behind that is simple: new technologies open up newer and better opportunities for doing more sufficient advertising business.

Considering how problematic are issues of privacy and transparency in advertising, blockchain seems to be a reasonable technological solution with the most potential to make a positive impact.

You know an old saying “When the future comes – embrace it!”

At the moment, there is no technology more enigmatic and perspective than blockchain. Everyone has their own opinion on it and its business prospects. There are numerous predictions, an innumerable number of various pitches, and a mind-boggling level of enthusiasm surrounding this technology.

What’s the deal?

According to the hype, blockchain is nothing short of being the lord and savior of every industry imaginable (and a couple of theoretical too). If you go through the think-pieces and overviews, blockchain can seemingly be applied to everything. And yet there is nothing specific about it. More on the reasons why later.  

Sure, blockchain reimagines the way banking is performed over the Internet via cryptocurrencies. It also reshapes the entire medical and insurance management and decreases the influence of the third parties in the majority of operations. But it is too soon to say anything definite about its long-term prospects.

For now, blockchain is in the fad stage, and only after it will pass we will see the real worth of blockchain as a technological solution. Before that will happen, understanding blockchain is what we need, along with the knowledge of what it can bring to the table.

Let’s sort things out.

Blockchain as a buzzword for the Internet


What is blockchain technology?

The blockchain is a network of distributed data blocks linked and secured with a little help of the fine art of cryptography. It was introduced in 2008 by none other than Satoshi Nakamoto (aka nondescript bitcoin dude). Originally designed as a cryptocurrency transaction framework, it slowly moved beyond to the other areas and is now used in such fields as medical care and insurance systems.

In a way, a blockchain is a new form of a database. Just like a regular database, blockchain allows storing, validate, authorize, and transmit data over the internet.

The difference from a regular database is that it is not situated on a server located somewhere – blockchain is a distributed network of data without a centralized authority. It is installed on specific computers by involved parties in order to enact operation. There is no “ground control” per se, it is all Side A and Side B, and so on.

Once implemented, blockchain is set in stone and can’t be modified in any way. In such networks, block transactions contain data on all prior blocks i.e. blockchain. Blocks cannot be deleted just added and every change is easy to spot in the records. Since you are aware of all involved parties and every action is recorded – it is easy to see who does what, when, and how.

This creates an incredible level of transparency of the operation that raises the trustworthiness of the operation on a new dimension. And that is what blockchain very attractive to the AdTech Industry.

How blockchain is changing advertising

Ad Tech is a kind of industry that embraces many nascent technologies and makes them work for its benefit thus evolving them and the business to new heights. Sure, this attitude is spurned out of necessity, but it does not negate the fact that the ad industry is rather open-minded in terms of adopting and developing new technologies. The blockchain is no different in that regard.

In order to understand how blockchain can be applied to the AdTech industry, we need to understand the problems the industry is facing at the moment.

Basically, there are two of them and both can be greatly eased by the implementation of the blockchain. One is transparency, the other is privacy. There are other issues but these are the two biggest.

Blockchain advertising’s supreme transparency and relative security of privacy is something of a glimmer of hope for an Ad Industry battered by Ad Blocking and compromised by Privacy issues (among other challenges).

What blockchain brings to the AdTech’s table

Brings transparency

As you know – lack of transparency equals lack of trust. The fact of the matter is – there are a lot of things happening in the dark during ad tech operations.

With help of blockchain – a certain level of clarity can be achieved. The thing is – every involved party works with the same information. That and the fact that every action is visible creates a precocious constraint.

In addition, none of the blocks can be modified – the only thing one can do inside a blockchain is to add new blocks. Everyone sees everything. This makes any activity relatively easy to track and analyze.

Even more-so – every change must be verified by all involved which drastically limits the chances of getting away with malicious intent

Promotes supreme accountability

Trust issues are running rampant in the ad tech industry. The fact that one basically needs to rely on the kindness of strangers is not particularly reasonable but it is the reality of the business. And as such, it needs to be resolved.

Hopefully, the transparency of blockchain can seriously increase the trustworthiness of operations between all involved parties. That is especially important in dealing with third parties, such as DMP, SSP, and Ad Exchanges.

What is the problem with third-party providers? Publishers and advertisers can’t see the specifics of how their money is used. This issue is complicated by often sketchy legal contracts and the general unwillingness of third-party companies to disclose their fees in full scope.

But what implementation of blockchain to financial transactions can give is clarity. Everyone involved will see exactly what goes where and why and in which quantity. And that is a huge step forward in terms of building trustworthy relationships.  

Helps to foolproof operations via smart contracts

The concept of smart contracts is brilliant. Plain and simple – it is a foolproof mechanism. If something is not right – it will not proceed.

In essence, the smart contract is a piece of blockchain code stored within a system that defines agreed conditions of operations. The smart contract contains a certain pattern of actions that can be executed if all conditions are met. Any changes should be verified by all involved. Otherwise, nothing will happen.

This thing helps in multiple directions. First of all, it seriously limits the capabilities of ad fraud to get into your system. On the other hand, the smart contract can give users a say in the targeting operation.

Limits ad fraud activities

One of the biggest virtues of Blockchain is that everything is visible and thus you have an idea of what others do inside the system. This alone can seriously limit numerous fraudulent activities, such as bot traffic, domain spoof, and pixel stuffing.

All you need to do is to check the numbers of impressions, assess their nature, and verify their validity. Basically, blockchain is able to provide an additional checkpoint before the financial transaction that will partially limit ad fraud losses.

But it is important to understand that blockchain on its own can’t save you from ad fraud. It can help but you also need other tools.

Enhances privacy

Privacy is probably the biggest issue in the industry right now. While industry players pretended that it is not an issue for quite a while – now privacy concerns and direct actions to protect it actively choke the industry via Ad Block and other tools.

While Blockchain is an open protocol by default, it can be used for the benefit of user privacy. There are two ways it can pull it off.

The first is due to transparency and we already covered this earlier. The second way is a little bit more sophisticated.

Here’s how it works. Instead of gathering data to one store – it is possible via blockchain to store data on user devices. Then, when it comes to targeting, verification mechanisms kick in and either confirm or deny further proceedings. It can be overbearing for the user, but it will surely give him more control over his personal data.

What issues are there with blockchain and AdTech?

Insufficient Scalability

The biggest challenge that holds back any significant development of blockchain technology is lacking scalability. The fact of the matter is – at this point blockchain is simply unable to handle such an amount of operations. It is too slow. For example, Bitcoin is currently capable of processing around 2-3 transactions per second. In the case of ad tech real-time bidding operation, you need to process 2-3 million events and more. That’s a bit of an operational gap, right?

Here’s why – blockchain is decentralized. It is stored directly on the devices of involved parties. Another important thing is that it is constantly growing. For example, once upon a time, the bitcoin blockchain was sized 25 MB. Now it is 160 GB. That’s a lot. And that what slows things down over time.

However, this slowness is justified. The thing is – you need to verify every operation. And that keeps in line every single action inside the system.

One of the possible solutions to the problem is through the diverse use of smart contracts. This will allow to automate operations to a certain extent and make things faster.

Standards are in development

Another big challenge for full-scale adoption of blockchain in ad tech is the lack of standardization. Why it matters? One word – compatibility. Standards are like a universal language. Their existence guarantees compatibility and rapid development of the technology. Standards enable the combination of various solutions into one superior.

At the moment, IAB is actively working on the guidelines, but it is a long way to go. Sure, there are custom solutions here and there, but lack of standardization means none of them are compatible with each other. This also means that a joint effort in evolving the technology and exploring its further possibilities of use is virtually impossible.

Sure, there are custom protocols, cases when the inventory doesn’t meet the specifications, as well as companies still working on OpenRTB 2.3 – released in 2014. This might become a severe issue with the blockchain, as its ecosystem relies heavily on the standardization rules and agreements.

Lack of expertise

While blockchain is certainly a trendy buzzword, it doesn’t mean that there are many experts active in the fields. There are people who can write about blockchain concepts, possibilities, and opportunities. But talk is cheap (unless it is a Keith Richards album), it is the action that matters.

And the reality is – there are not many of those who can do a thing or two with blockchain and not break into tears. In fact, demand vastly exceeds supply. And those who actually have expertise on the subject are most likely already employed.

This is a natural problem for any nascent technology. Basically, blockchain is still in the stage of early adoption when the industries are yet to be convinced in embracing the technologies and their possibilities.


At the moment, blockchain is still an emerging technology with nothing particularly definite in its fold. While it is surely established itself as a viable technology that is able to solve certain biting problems here and there, there are still not many practically feasible and economically justified solutions for full implementation. However, that is more of a question of time than an actual problem.

In the context of the Ad Tech industry – blockchain is something of a dream in the process of a very slow realization. It will take a lot of time before it takes off. The concepts are there but the solutions are not there yet. Because of that, the only thing we can all do is wait for more things to come.

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