Blockchain 101 for Advertisers

January 22, 2018

By Laurie Sullivan

Most marketers by now have heard the word "blockchain," but some still cannot describe the technology or know what it does. So Data & Programmatic Insider caught up with Charles Manning, CEO of Kochava, to walk through the details.

Although Kochava is a mobile measurement company, Manning's latest venture begins with measurement through the blockchain XCHNG.

"Blockchain, much like the internet in the late to mid-1990s, isn't a cure-all for which you can apply pixie dust over a client-server system and have things magically happen," Manning said. "There are a bunch of components and parts."

Someone who doesn't know much about coding can use Wix to build a website. Those wanting to set up smart contract on a blockchain to transfer money can use Ethereum to accept Bitcoin.

Online advertising is digitally rendered, making blockchain a prime candidate to support the industry.

The automated blockchain has four distinct parts. There's the distributed ledger or network with synchronized nodes; the decentralized ad networks or data from which content gets pulled; proof of work that allows the decentralization model to work smoothly; and smart contracts to ensure advertisements are served.

The insertion order for the ad buy becomes the smart contract. And it's open-sourced, so anyone could use it.

"Blockchain is about unifying incentives to align," he said, explaining how cryptocurrency works. "You're creating incentives for people to set up machines to ensure you have decentralization."

Manning likened Fast Track and a vending machine to a smart contract. "There's no intermediator," he said. "I put in money, push a button and product comes out. I'm aware of the contract when I approach the machine and I get what I want out of it. No one is there to ensure it's done."

If there is no central database, if everything is decentralized, there must be systems and codes in place that synchronize the network, provide incentives to alight, and ensure consistency along the ad supply chain.

In Manning's description, remembering that unification is paramount to understanding how a blockchain works. All advertisements must run on one pipeline that allows them to travel on the same track with a way to confirm the ad got placed and served in the correct location.

Source

"Blockchain 101 for Advertisers." MediaPost, 1/22/18.

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