Most conventional ad tech platforms rely on payments in non-digital currency. Such payment systems lack transparency and can be manipulated to benefit the ad tech platform owners at the expense of advertisers and publishers.
In contrast, MADnet Books, the first platform component that the MAD Network plans to make available, is an open, decentralized payment rail that enables transparent financial transactions using blockchain assets.
MADnet Books is more than simply a means for advertisers and publishers to exchange payments. It does that, but because payments are recorded on the blockchain, MADnet Books also provides visibility and transparency into the way ad dollars are spent.
That means that advertisers and publishers are aware if third parties become involved in the ad placement process. In this way, MADnet Books sheds light on all of the third parties imposing fees on advertisers or publishers — a problem that contributes to the “disappearing ad dollar” issue on conventional ad tech platforms.
MADnet Books is powered by MADtoken, an ERC20 token based on Ethereum. Payments are enforced automatically via smart contracts, which prevent fraud and penalize untrustworthy behavior.
The token economy is an important tool in the MADNetwork, which is designed to flip the market dynamics for the middle layer of the ad tech industry. Doing so will make it more profitable to be in business and to serve the interests of buyers and sellers, which is not always the case in today’s supply chain. For the buyer, this results in greater reach for the cost, while publishers actually lower the margin compression, which currently plagues the digital advertising ecosystem.
Matching advertisers seeking to place an ad with publishers who are selling ad space suitable for the advertiser is challenging. Traditionally, ad tech platforms have performed this work using closed-source software whose algorithms are known only to the platform owner. Here, again, it is difficult for advertisers and publishers to determine why a particular ad placement decision was made or even to measure its effectiveness.
MADnet Core, the ad server and exchange within the MAD Network, takes a different approach to ad placement. MADnet Core implements a decentralized, blockchain-based process for generating ad pairings. In order for an ad to be placed with a publisher, a sufficient number of nodes on the network must agree that the advertiser-publisher match is valid based on the network’s consensus rules.
This decentralized approach has several benefits. For one, it helps to ensure that ad placement is performed quickly. Because MADnet Core is a distributed, decentralized ad server and exchange, it is not subject to the types of bottlenecks or failures that can impact a centralized ad server.
In addition, by requiring validation of ad pairings by a distributed network, MADnet Core prevents fraudulent and ineffective matches. Attempts to manipulate pairings, or place an ad in a way that violates the rules set by advertisers and publishers, will be overridden by the network.
On conventional ad tech platforms, not all meaningful data about the performance of an ad is shared with advertisers. Instead, the benchmarks that ads are paid out on are typically based on primitive panel-based metrics, such as rote summaries of pageviews for a website hosting an ad. The way the system is set up now, it is quite difficult to measure the true impact of an ad campaign when the currency a campaign is traded on is outdated or biased, such is the case with Facebook, which is consistently called out for “grading their own homework.”
MADnet Data, a data management platform that will be integrated into the MAD Network, is designed to solve this challenge. MADnet Data provides an opportunity for publishers to collect rich, detailed data about ad performance and exchange it with advertisers. In most cases, the data will be anonymized in order to protect the privacy of ad viewers.
MADnet Data provides an additional revenue stream opportunity for publishers, who can sell ad data in addition to ad space. It also increases advertisers’ visibility into the ad ecosystem, and — because of transparent data exchanges that are secured using multi-signature cryptographic keys — it prevents third parties from selling ad data to an advertiser’s competitors without the advertiser’s knowledge.
The MAD Network is more than an ad exchange. It is a complete ad tech platform built using blockchain technology. Using a decentralized architecture, it ensures transparency and restores fair cost margins for advertisers and publishers — all with the goal to disrupt conventional ad tech.
Disclaimer: MadHive is a client of BTC Media, which owns Distributed.com.