- International Conference on Marketing in the Connected Age (MICA-2018), October 6 th , 2018 Danang City, Vietnam.
- Blockchain Technology and Potential Applications in Online Advertising.
- Online advertising is also one of the areas affected by this technology.
- To broaden our understanding of blockchain technology based services and platforms, this article gives the potential applies of blockchain in online advertising.
- This article focuses on introducing and clarifying the theory of blockchain technology.
- In addition, this article gives the problems that online advertising is fcing now and how blockchain changes it by exploring the potential application of blockchain in online advertising..
- blockchain technology.
- blockchain and online advertising.
- Online advertising is an important part of any business organization on the internet.
- Nowadays, any business wants to advertise their products and services to targeted customers fastly, online advertising is the best way..
- Online advertising has grown tremendously in recent years thanks to its superior features such as targeted advertising, accurate measurement, high efficiency and competitive cost.
- With the benefits of online advertising:.
- You can see, the roles of online advertising are huge.
- However, there are a number of issues that still exist in online advertising.
- Blockchain is not a miracle technology that can change any problem in online advertising, but it is a potential technology that is highly influential and can improve some the remaining problems..
- This article will begin with an explanation of what the blockchain technology.
- And then, it gives issues which still exist in online advertising.
- The purpose of the study is to provide a general theory of blockchain, to clarify the issues that exist in online advertising, and to offer potential applications that blockchain can solve.
- (2) presented the remaining issues of online advertising activities in the present.
- (3) given potential benefits of blockchain in online advertising.
- E-mail address:
[email protected].
- Desk research is the study of the analysis of existing data from different sources.
- So far blockchain is considered as one of the most potential and influential technologies in many fields from economics to politics and society.
- The research method at the desk will be a suitable method for new technology such as blockchain while in the research stage, exploration..
- 3.1 Blockchain technology Concept of blockchain.
- In a pure sense of the term "blockchain", blockchain is a chain of transaction blocks that are connected to each other.
- Bit gold was never implemented, but has been called "a direct precursor to the Bitcoin architecture [8].
- The first blockchain was then conceptualized by Satoshi Nakamoto in 2008 and implemented the following year as a core component of the digital currency bitcoin, where it serves as the public ledger for all transactions..
- The invention of the blockchain for bitcoin made it the first digital currency to solve the double spending problem.
- Each block of information contains information about initialization time and is linked to the previous block, so this database is called block chain.
- Blockchain owes its name to the way it stores transaction data — in blocks that are linked together to form a chain.
- As the number of transactions grows, so does the blockchain.
- Each block contains a hash (a digital fingerprint or unique identifier), timestamped batches of recent valid transactions, and the hash of the previous block.
- In this way, each subsequent block strengthens the verification of the previous block and hence the entire blockchain.
- The method renders the blockchain tamper-evident, lending to the key attribute of immutability..
- The blockchain contains verified proof of transactions..
- Blockchain – How it works.
- In this case, nodes—the computers or servers in the network—determine if the transactions are valid based on a set of rules the network has agreed to..
- A block contains a header, a reference to the previous block’s hash, and a group of transactions.
- Step 4: Validation - Blocks must first be validated to be added to the blockchain.
- The most accepted form of validation for open-source blockchains is proof of work—the solution to a mathematical puzzle derived from the block’s header..
- Step 5: Blockchain mining - Miners try to “solve” the block by making incremental changes to one variable until the solution satisfies a network-wide target.
- Each node adds the block to the majority chain, the network’s immutable and auditable blockchain..
- Step 7: Built-in defense - If a malicious miner tries to submit an altered block to the chain, the hash function of that block, and all following blocks, would change.
- Characteristics of blockchain.
- Secure, private, and indelible: Permissions and cryptography prevent unauthorized access to the network and ensure that participants are who they claim to be.
- After conditions are agreed to, participants can’t tamper with a record of the transaction.
- Transparent and auditable: Because participants in a transaction have access to the same records, they can validate transactions and verify identities or ownership without the need for third-party intermediaries..
- 3.2 Many issues in online advertising.
- Technology is growing fast, especially the world is in The Fourth Industrial Revolution, so the method of online advertising must bring efficiency to the participants.
- The fig 2.1 below shows that the simple model in online advertising and relationship between them.
- The publisher advertises the actual product or service and drives the user to the advertiser page to make a purchase or read more details about the product.
- The flow of online advertising [18] Fig.
- Intermediate in online advertising [9].
- In the advertising industry, there are a lot of middlemen that lead to cost for business to pay more because of these middlemen.
- The problem with display online advertising is that it has become an inefficient and costly process, both for advertisers and publishers.
- Many people think that this is a worrying issue and even if the company recently announced it had stopped functioning, most experts say that this move is due to the adequacy of data collection, not due to privacy concerns, but this is also a concern for viewers [15,16]..
- Usually, online advertising uses automated technology, and it can be unclear where precisely the ads are placed, leading to vast amounts of money being wasted because they cannot be properly monitored [17]..
- This is a fraudulent campaign by creating fake domains for advertisers to buy ads, and then the phishers invest a bot to click on the ad that boosts revenue thanks to the paid system money per click that they exploit.
- AFK13 then invested heavily in a bot farm, taking up space in data centers so they could fire faked traffic from more than 570,000 bots at those ads, thereby driving revenue thanks to the pay per click system they exploited.
- 3.3 Potential applications of blockchain in online advertising.
- In the case of online advertising too, this middleman is an agency like Google or Facebook, ensuring the reliability of the money through the advertising campaign.
- Applying blockchain, advertiser can directly contact the owner of the website when they want to publish their advertisements, blockchain can help them connect via the app to the owner.
- Through the application, it can be easily proven that the viewer of the ad and the click is real through the display data, ensuring that the website owner and the business do not need a middleman to mediate the transaction and authenticate the deal.
- No need for middlemen and no fraud, blockchain provides accurate information to the parties: who, when, how often to see the ad on the page and how many users actually click on it [19]..
- Through the use of blockchain technology, buyers and sellers outline their terms in a smart contract.
- Unlike the paper-based version of the contract to buy and sell digital ads, the smart contract IO codifies all the elements of a well-formed IO into a fully traceable and immutable electronic Ricardian contract, binding the following key elements:.
- (2) Identification and pre-verification of the Buyer and Seller of the media with unique keys.
- (5) Identification of the optionally associated ecosystem partner to be used as the Ratings Provider.
- Advertisers will then have a better set of loyalty and quality in the long run..
- It works on the blockchain and smart-contract – instruments that guarantee a fair distribution of revenues from data sales among the contributors..
- This is considered in calculation of the reward paid to a contributor after the data is sold..
- Customers set the criteria for the search of the needed leads.
- While buying leads they will be able to check the origin of the contacts, see how many times this data was bought and understand whether these leads were useful for another business or not.
- Such transparency is enabled by Snovio’s blockchain.
- Blockstack customers can access the content they want, without having to worry about getting unwanted targeted ads - the power back to the consumer [11]..
- (3) Comparable Performance: The end-to-end performance of the new architecture (including name/resource lookups, storage access, etc.) should be comparable to the traditional internet with centralized services Ensuring the reliability of statistical data.
- In online advertising, it is almost impossible to know whether the statistics are accurate or not, the business itself does not know whether the clicker is a real person or a robot or a software that used to simulate data to be.
- Each chain in the system is transparent and encrypted, and companies may be able to determine whether their ad is a member of the system.
- For example: Platform of Adchain (Adchain.com).
- Its stated goal is to allow for building of decentralized applications, specifically for use in the digital advertising ecosystem.
- Adchain is an open protocol that uses blockchain technology to solve digital advertising’s persistent issues of brand-safety, fraudulent traffic, and lack of financial transparency.
- That is the advantage of the blockchain: an open and transparent ledger, that is irreversible and practically impossible to compromise [10]..
- One of the main reasons is the functionality, the interface of the blockchain applications are quite poor, not friendly and still in development.
- With this article, author hopes to contribute a part of the blockchain theory and to present some potential applications of blockchain in the field of online advertising that will be applicable in the future.
- Author is confident that this article can serve as an inspirational starting point for other future studies of blockchain..
- Hanson (2018), Blockchains Unchained: Blockchain Technology and its Use in the Public Sector, OECD Working Papers on Public Governance, No.
- 28, OECD Publishing, Paris [4] Bill Briggs, Janet Foutty, Craig Hodgetts (2016), Tech Trends 2016: Innovating in the digital era, Deloitte University press, USA.
- [9] https://www.adclarity.com/tag/media-buying/.
- [10] https://adtoken.com/uploads/white-paper.pdf [11] https://blockstack.org/whitepaper.pdf.
- [12]https://www.blockchaintechnology-news.com five-ways-blockchain-can-enhance-your-ad- campaigns/.
- [13] https://www.clearcode.cc/blog/digital-advertising-relationships/.
- [14] https://www.drbresearch.org/en/desk-research/.
- [15] https://www.economist.com/briefing the-great-chain-of-being-sure-about-things.
- [16] https://www.forbes.com/sites/thomasbrewster methbot-biggest-ad-fraud-busted/#6ca1dee94899 [17]https://www.forbes.com/sites/steveolenski why-digital-advertising-needs-a-blockchain-.
- [18] https://help.everflow.io/support/solutions/articles traffic-vs-revenue-flow [19] https://www.ideas2it.com/blog/blockchains-disruption-marketing.
- [20] https://www.marketingweek.com blockchain-disrupting-loyalty/.
- [21] https://smallbusiness.chron.com/disadvantages-online-advertising-options-10212.html [22] https://www.socio-tech.org/google-and-facebook-make-billions-from-ads-so-do-criminals/.
- [25] https://www.xchng.io/wp-content/uploads/2018/05/XCHNGWhitePaper.V10-1.pdf [26] https://www.statista.com/chart/372/quarterly-growth-of-us-online-advertising/.
- [27]https://www.researchgate.net/publication/258341850_The_Review_of_Different_Aspects_of_Online_Adver tising_Advantages_and_Disadvantages