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How Blockchain will change Digital Advertising

How Blockchain will change Digital Advertising

Before we dive into how the Blockchain will change the Video Advertising let me first explain few basic concepts of Blockchain Technology:

What is Blockchain?

Blockchain is a ledger, or a database, that is stored in a distributed peer-to-peer network without any central point of control. While special permissions are required to write entries to the blockchain, in most cases, the ledger itself is publicly visible. Once an entry is made to the blockchain, it is pushed out to the network and is immutable, meaning that it can never be changed.

It is important to recognize that blockchain is a generic term. Many blockchains exist, and many more are in development. The first, most famous, and most widely used is the Bitcoin blockchain which keeps an accounting of all transactions that utilize bitcoin. The blockchain protocol underlying bitcoin is in essence a giant spreadsheet whose purpose is to store and exchange value in the form of the bitcoin cryptocurrency

How Does Blockchain Work?

When new, complex technologies like blockchain begin to enter the vernacular, it’s tempting to try and compare them with something more familiar (“shared database”, “distributed spreadsheet”). While these analogies hold true to some extent, they don’t truly capture the essence of the innovation. Blockchain provides a method for two parties to exchange value securely on a peer-to-peer network. Blockchain creates a record of the transaction on the network that is indelible and transparent to all parties. What’s truly unique about blockchain is that the transaction and the value exchange happen directly between the parties without intervention from any intermediaries such as a bank or credit card company.

IF you are looking to understand how the Blockchain works —-> Refer to the video tutorial on how blockchain works here.

Blockchain in Advertising

Like the Internet three decades ago, and social media in the last decade- blockchain is a foundational technology that can disrupt the marketing landscape. It is based on distributed ledger technology, which has massive potential to touch different points of the marketing value chain. Smart contracts between agencies and brands and micro-payments that incentivize customer interactions have the potential to revolutionize marketing. There are about 219 companies that allow leveraging blockchain in marketing campaigns. Everyone involved in startups or innovative businesses need advertising. Sometimes, the feedback doesn’t match the expectations or, in some cases, result in a scam. So can blockchain make a difference? Let’s find out!

How Blockchain Affects Marketing?

In 2020, blockchain is a panacea for all of the advertising worries. The ideas that were mere theory are being replaced with valid and tried solutions solving transparency, efficiency, and tackling fraud. Identity-solving applications are becoming more real. Here we list down what all blockchain has to offer to the industry:

1. A Way to Share Rewards

The distributed ledger technology automates payments at any scale, making it possible for brands to send micro-amounts to the consumers. This has massive implications as it is used to transfer money directly into bank accounts, replacing gift cards and online credit with limited redemption possibilities. This lets customers have a monetary incentive, no matter how small the interaction is.

2. Optimized Advertising Value Chain

One of the focus areas for blockchain in marketing is Adtech. Managing digital ads is a prime candidate for moving to a secure, transparent, and accountable distributed ledger.

3. Verifies Data For Customer Intelligence

Blockchain can gather, check, store, and automatically update databases with a little human intervention. This is believed to transform the customer insights’ approach. Blockchain is the perfect underlying platform to generate ideas because it prioritizes data-driven marketing.

4. Targeted Content Delivery

Data can be linked to a hyper-personalized segment of insight generation rather than using automated insight generation for effective targeting.

5. Serverless Architecture

Serverless architecture is a better option than traditional cloud hosting to deal with thousands of transactions as it allows stores to scale as per customer demand. Blockchain directly enables brands to gain from zero performance gaps and indirectly by going serverless as it will enable them to host on-demand campaigns.

6. Transparency and Trust

Blockchain helps advertisers select the right publishers, quantify the results of an advertising campaign, helps build trust, and prevent fraud. This reduces cost and speeds up transactions. Consumers are aware of the entire process before the distribution of goods is visible.

Blockchain Use Cases in Advertising

Fueled by a large influx of venture capital during the past two years, many companies have been actively
coding and building applications for the use of blockchain in digital advertising. Many of these applications are at or near their alpha or beta release.

Below we describe several projects underway that use blockchain as a means to enhance and improve the digital advertising supply chain. We selected these projects based on input interviews that the IAB conducted with member companies that are actively exploring and experimenting with blockchain. They are by no means a comprehensive compendium of all the work being done by companies in this space though they do serve to illustrate how sweeping and disruptive blockchain may become to the way we conduct our business in the future.

Ads.txt Plus

MetaX, a blockchain company based in Los Angeles, aims to address issues of fraud and lack of transparency that impact digital advertising using blockchain technology. The company has spent the past two years working on this and now has several applications ready for public beta testing this year. One of these applications is called Ads.txt Plus. It offers a compelling example of how the widely praised Ads.txt program initiated by the IAB can become even more effective, efficient, and secure using blockchain.

How does Ads.txt Plus work?

We implemented Ads.txt Plus on the Ethereum blockchain and in tandem, built a front end UI to manage publisher ads.txt files and buyer lists. Publisher ads.txt files can be downloaded in aggregate from one place for buyers. Publishers themselves can maintain their file versions and either keep it on the blockchain endpoint and/or export to their web server.

What does a publisher do in order to transact in this process?

A publisher has to input their ads.txt file into In order to implement, you need a digital wallet. Using a browser extension called MetaMask (in Chrome), you can implement a digital wallet right in the user’s browser. In this case, the user would be the publisher. They have a public address and they have a private key to this wallet. They take their public wallet address and they add it to their DNS records. In the text field, they add their wallet address. For example, today if you go to, you can see all of the names of authorized sellers. In the future, if you augment that with your digital wallet and then go to, you will see just the wallet address. The publisher can obfuscate all the authorized sellers so that it’s not readable but it’s still verifiable.

XCHNG, brought to you by Kochava

Kochava is a measurement and verification company based in Sandpoint, Idaho. They have created a research and development subsidiary, Kochava Labs SEZC, to architect a new blockchain framework that is uniquely suited to high-speed transactions such as those that occur in digital advertising. They intend to open-source the code for this chain in the coming year.

The instance of this blockchain for use in digital advertising is called XCHNG. The core value prop of XCHNG is that the insertion order, which governs all media transactions, can become a smart, self enacting contract. Charles Manning, Chief Executive Officer Kochava, explains:

“If you standardized blockchain and the smart contract in the blockchain around the insertion order, you are now at the kernel of the workflow for how buyers and sellers engage, how things are confirmed, how they are measured, how they are rated, and how they are paid. We need to think of this is as the future IAB 4.0 Ts & Cs5 and terms of the IO. It’s the blockchain implementation of IAB terms and our standard smart contract template that would become the standard that we collaborate on from a taxonomy standpoint. That is really meaningful and powerful…

On XCHNG, the elements of a digital media buy are abstracted and simplified into five basic components or parties: Buyer, Seller, Measurement, Ratings, and Payment. The premise is that inventory can be locked down on a confirmable ledger and then traded, sold, measured, and managed. Manning’s call to action for buyers and sellers: “Use this as your system for guaranteed programmatic buys because it’s traceable, trackable, and there is not any intermediary – you can work directly with your counterparty


NYIAX has been co-developed in partnership with Nasdaq. Nasdaq powers many of the exchanges worldwide and is an expert at providing a system to transfer value directly between counterparties, and across various asset classes. As a platform built on top of Nasdaq’s Financial Framework, NYIAX provides an extension into a new asset class – digital advertising. By facilitating the assignment of value to advertising inventory (context, audience, unit size, etc.) and enabling it to be transferred in a direct way between buyers and sellers on the exchange using a smart-contract at its core, NYIAX enables direct trade between buyers and sellers, and for the first time, enables the possibility of re-trading inventory in a blockchain-enabled futures market.

The NYIAX approach improves upon the current programmatic auction method by adding the critical missing component of transparency so that buyer and seller agree on what they are trading prior to the transaction, including the fees they will pay to intermediaries. It also holds the promise of collapsing clearing and reconciliation into a single step, ensuring that buyers and sellers keep more of the value themselves. Finally, in keeping with the stock market analogy at the core of NYIAX, one can imagine a futures market and even a derivatives market built on the digital advertising asset class. According to Bush, secondary markets are indeed a possibility.