Is Blockchain Technology the Key to the Future of Programmatic?

Bitcoin has been in the news again recently as the digital currency’s bubble seems to finally be bursting. Created as a response to a global dissatisfaction with the mainstream banking industry, Bitcoin has made some savvy investors a lot of money in a very short time. However, all good things usually come to an end.


While Bitcoin’s days may be numbered, it’s the technology which underpins the currency which is beginning to make waves in various industries.

Blockchain works by creating a sequence of data blocks which provide a public ledger of every step of a transaction. While we use the word “transaction” in blockchain discussions, the term is used to describe any data exchange, not just financial ones. Each block in the chain contains an alphanumeric string hash key which contains information about the preceding blocks, and any attempt to manipulate the chain results in dramatic changes to this string which will be immediately apparent to anyone who wants to look.

It’s this transparency which provides blockchain with its much-valued security.

Blockchain for Programmatic

One of the most promising uses for blockchain technology in the programmatic advertising space is as a way of combatting the rise of bots. The bots in question are designed to commit ad fraud. Through the manipulation of data, these bots can imitate identities, and artificially boost clicks and ad views.

The fight against bots is becoming ever more difficult as the technology behind them becomes increasingly sophisticated, making them almost indistinguishable from real humans. Unscrupulous ad vendors can deploy this tech to give the impression their ad platform has a much wider reach than it really does, and thus ask a higher premium for their wares. Of course, these bots are empty engagement, offering no tangible benefit to advertisers beyond superficially impressive looking numbers.

The fact the data contained in blockchain ledgers cannot be altered without causing significant and immediately apparent changes to the hash key, means that the technology has the potential to make it markedly more difficult for fraudulent bots to manipulate information.

Once bot activity has been identified, artificial intelligence and machine learning software can capture signals of user behaviour and interactions, and thereby empower the administrators of affected advertising sites with the ability to prevent the bots from recording false impressions and conversions.

GDPR Compliance

The EU’s new GDPR regulations are changing the way data is handled by companies. Before its inception, the gathering, storage, and use of people’s data was opaque and obfuscated. This situation came to a head with recent scandals such as the Cambridge Analytica story.

“Blockchain also has a role to play in GDPR compliance,” writes Ben Feldman for AdWeek. “By providing a reliable method for reviewing past actions as well as determining current opt-in status, an immutable blockchain ledger allows advertisers to manage a supply chain of vendors and sub-vendors. With such a ledger in place, advertisers can be certain about where GDPR compliance might break down, so they can address those issues as soon as they arise.”

However, the potential uses for blockchain extend beyond compliance and could also help prevent the kinds of data breaches which made the GDPR necessary in the first place. The ledger provided by blockchain provides an immutable history of data ownership, allowing its use to be effectively tracked though its entire lifecycle. When a request is received to dispose of data, it can be quickly and confidently established whether the request comes from a source which is authorised to make such a request.

Final Thoughts

While blockchain can offer new transparency and security to programmatic advertising vendors and purchasers, there are barriers to its implementation.

The most significant of these must be cost. Like any sales-focused industry, price and value is everything, and blockchain implementation costs would have to be passed on to the customer, reducing perceived value from the perspective of buyers. The other issue with blockchain is that to be truly effective, it must be implemented across the whole industry, which is obviously a mammoth undertaking that may take years to achieve.

Blockchain has yet to have any real success stories outside of financial exchanges. This may mean a pioneer is required to make the first leap and prove the technology’s potential outside of that field, or it could mean the technology is stuck in a pre-paradigm state with further development required to make it truly viable.

Blockchain technology is set to be a hot topic at Programmatic Pioneers 2019, taking place in May at the Twickenham Stadium, London. Download the agenda today for more information and insights.

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