Standing for Advertising Exchange, AdEx (ADX) is a decentralised platform in which online publishers and advertisers can meet and negotiate contracts for advertising online through they’re portal. The AdEx Project allows users to clearly define which adverts they would like to have published on their sites and also manage all their privacy and data, which is very important in these regulated times.
A Decentralised Advertising Portal
AdEx is emerging in an industry which is already quite saturated, there are a number of well-established ad agencies also using blockchain technologies, such as Basic Attention, Bitclave, Token, qChain and adChain. So what’s going to make AdEx stand out from the crowd? AdEx are offering a platform that is fully transparent for both advertisers and publishers, unrestricted access and no fees for using their services.
At the moment AdEx is a relatively unknown project, they successfully completed their ICO token sale, which has given them funding to launch a beta version of their platform.
The State of the Ad Industry
To understand AdEx’s place in the world it is important to understand the current state of the advertising industry.
Over the last few years, online advertising has finally surpassed all over forms of advertising, including TV, Print and Radio, in terms of revenue. Infact, online advertising now accounts for 40% of all advertising spending.
With technologies and internet speeds continuing to advance at an alarming rate, you are now seeing a shift from mainstream television providers, who are also offering their content online, and the trend towards online media is growing evermore.
Meet the Middleman
The advertising industry are rife with agencies, whose job is it to seed your advertising content out to the general public. An online example of this would be Google’s Adwords advertising platform. They use a bidding mechanic, to determine the price of a particular advert, on a cost-per-click basis and they make money, everytime someone clicks on an adverts. So is 100 people click on an ad spot that costs $1 a click, Google makes $100 and the advertiser spends 100 dollar. There are lots of different types of online advertising structures, such as CPM (Cost Per Thousand Impressions), CPA (Cost Per Acquisition), and so on. But the ultimate goal is to make money by connecting advertisers with publishers.
Overall there is little transparency in the advertising industry. Google’s adwords won’t tell you why they charge $10 a click for an advert relating to dogs, but will only charge $5 when it’s related to rabbits. A lot of the time, it’s based on trends, time of year, algorithms, etc, but good luck trying to get agencies to reveal their pricing structure.
Sadly, this makes it quite difficult when it comes to auditing the success of an advertising campaign, It can also mean it can be difficult to measure the quality of traffic and leads coming from publishers. Some publishers have been known to spoof their traffic, in order to gain more money for the adverts being on their site.
Ad blocker and Ad blindness
When a user opens an app or surfs the internet, they are bombarded with advertising from the word go. Frustration has become so apparent, it gave birth to the beginnings of ad blocking extensions on web browsers such as firefox and chrome.
Blindness and disinterest in adverts have also become apparent, where ads are regularly avoided or skipped immediately. For ad agencies and publishers, this becomes a problem. It’s trying to be tackled by social media platforms such as facebook and instagram, by their ability to allow advertiser to target their users through their mountains of data.
How AdEx Solves the Problems
AdEx is looking to implement a solution, which consists of three user stories, the publisher, the advertiser and the user. Each of these stories, addresses the challenges of advertising online from a new perspective. Let’s look at how these three elements are managed.
Often known as bloggers, content creators, youtubers, instagrammers, etc, they are digital media owners that users often visit. These publishers can host advertisements on their media and get paid for those particular ads.
Some publishers are only out to make money, so will defraud the ad agency with spoofed traffic to display the adverts too. When running advertisements with AdEx, each impression and click is verified to make sure it’s authentic. This eliminates the fraudsters from the system and overall protects the authentic publisher. AdEx will audit incoming impressions and false clicks will be punished, driving up the value of authentic impressions and ultimately helping publishers make more money.
Advertisers will have their site displayed on thousands of websites and they have no control over what website displays their ads, this can cause problems for the advertiser, especially when they are paying money for displaying their ads.
Similar to Facebook, and other social media platforms, AdEx promises to provide a high-level of customisable target audiences for advertisers. This will allow the advertiser to be able to further target their chosen demographic, ultimately bringing a better return on investment, this feature is what’s making AdEx truly unique. However, the company has limited data to target users from, but collecting more data and developing user profiles is top priority for them.
When advertisers pay for an ad placement, they will pay in ADX tokens. However to facilitate this, AdEx are implementing a direct exchange with fiat. When the user cashes out their ADX tokens, they will return into circulation.
This is another challenge for AdEx, both from a legal standpoint and a logistical position. Fiat gateways require fluidity and regulatory compliance.
The final element to AdEx’s development plan are the users. The company will look to implement a portal for the average user, this gives them the option to determine what advertisements they will be able to see from publishers hosting their ads. This will also allow AdEx to develop a more unique look at their users data.
As a decentralised app, AdEx is based off the ERC-20 currency. While AdEx was originally based off the Ethereum blockchain model, they are looking to move over to NEO.
The dApp will also look to host a token exchange, which will be used for bidding and advertising space. This will also include messaging channels for direct interaction between advertisers and publishers.
Contract management and negotiations can take place off the blockchain, however all settlements will need to be finished on the dApp.
Since the AdEx (ADX) currency is based off Ethereum’s ERC-20 you will be able to store it on all Ethereum wallets, such as MyEtherWAllet. You are also able to store them on hardware wallets such as Trezor or Ledgers.