Introducing AdEx | Next generation ad protocol running on the Ethereum blockchain!

Introduction

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Digital advertisement rules the internet, the biggest internet companies earn the majority of their revenue thanks to their ads system, and the amount of money that is invested in this industry can be mind-blowing.

In the same way, as digital commerce is increasing on a yearly basis, the same has been happening with digital ads, and as internet users continue to grow mainly in developing countries, it can be expected that digital ads will eventually flood those markets as well.

However, every product or service is never perfect, improvements can always be designed and released, especially when using new technologies to develop solutions that weren’t possible before, and the digital advertising industry is, by all means, no exception.

Blockchain technology and decentralization can provide tools to developers to figure out better ways to handle everything regarding digital ads, and thanks to the explosion in popularity of these technologies in recent years there are now several projects that are planning to create new ad platforms capable of offering better features that the ones currently available, with AdEx certainly being one of the most promising of these projects.

What is AdEx?

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AdEx is a decentralized ad protocol that runs on the Ethereum blockchain and through its own implementation of “traditional peer-to-peer technology, cryptography and blockchain” ^Source this project is planning on tackling some major problems that are affecting today’s digital ads sector, resulting in a versatile solution capable of disrupting this extremely competitive industry. Some of the problems that can be solved are the following ones:

Abuses of users privacy: it is a very well known fact that major internet companies such as Google & Facebook don’t respect their users privacy, in fact, just last year there was a major scandal with Facebook after it was exposed that the company allowed “Microsoft's search engine Bing access to see all of a user's friends without the user's consent, letting Netflix and Spotify read a user's private messages and allowing Amazon to gather names and contact information” ^Source. On the other hand, Google also had some legal problems for not properly protecting the private information of some of its users.

These problems are of course nothing new, and they are very likely to continue until a groundbreaking disruption takes place, therefore, it is fair to say that greater transparency is needed for the sake of people’s online privacy.

^Source

Nonoptimal reports for people running ad campaigns: in order to successfully run an ad campaign in the most productive possible way, the advertiser will need all sort of metrics capable of providing him with proper insight that can be used to make any necessary adjustments in the way the ads are being rolled out. The problem, in this case, is that different ad platforms give different types of reports to their users, which can complicate things when comparing campaigns from different networks because this “prevents advertisers from being able to cross-check data and results.” ^Source

Billions lost due to ad fraud: click farms are a phenomenon that has been highly reported in several websites, they basically consist in having people clicking or tapping on ads the entire day, to drive traffic and charge the advertiser for it. This traffic is obviously worthless because the people are only doing it to get paid, and not because they are interested in the product or service that is being advertised. Another popular method of ad fraud consists in putting ads one on top of another one, resulting in several impressions despite only 1 ad being visible to the user.

The following report indicates that ad fraud has cost the industry 14 billion USD in lost revenue, and this is only in the year 2017. These numbers will probably increase in the coming years mainly because the ad industry itself will also get bigger.

Benefits that AdEx can bring to the digital advertisement industry

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One of the features that explain blockchain technology attractiveness, is that it facilitates the creation of platforms that can guarantee that users privacy will not be violated, this technology is inherently transparent and developments are open source, so it is extremely unlikely that privacy violations, such as the one from Facebook mentioned a few paragraphs ago, can occur under these circumstances.

When it comes to analyzing the results of several ad campaigns, blockchains, in general, show every information that goes through the network, this way, advertisers will be able to have all the information there is to know about their marketing strategies and the corresponding results, besides AdEx will also be capable of providing real-time reporting to its advertisers, which can certainly be of big help if there is a change that needs to be applied in order to achieve a better performance.

Using an immutable ledger is one of the best solutions to stop all sorts of frauds, so when we realize that blockchains are naturally auditable and combine this with the fact that AdEx will provide specialized help when it comes to these issues, it would be fair to say campaigns that are run through this protocol won’t be as impacted by ad frauds as campaigns using traditional ads platforms.

^Source

With the simplicity that AdEx makes possible, publishers, advertisers, and web users can enjoy the following benefits.

Publishers: they can monetize their content & websites by signing up with AdEx, their revenue will depend on the traffic they can allocate to the ads placed through AdEx’s protocol.

It will be possible for publishers to select which ads they want to include by searching the different available bids from advertisers in the AdEx market, this allows both publishers and advertisers to interact directly between each other, with no middlemen, meaning that AdEx doesn’t take any commissions nor fees. The expected result is a more efficient workflow with reduced costs and better results for everyone involved.

Advertisers: the first thing needed in order to place ads through the AdEx protocol is to purchase ADX tokens. Once they have enough ADX tokens, AdEx will allow them to establish and modify the necessary settings in their ad campaigns, with the goal of placing the ads in front of the eyes of people that are likely to be interested in their products or services. As mentioned before, AdEx can also leverage several strategies so that advertisers only pay for authentic impressions of their ads, this will reduce problems related to ad fraud as well as reducing the amount of money stolen using these dishonest methods.

Web users: people will have their privacy properly protected and they can even make sure to only receive ads filtered according to their likes and interests. This way, people will be more likely to interact with the ads, and the potential discomfort from seeing too many ads will end up reduced.

Exploring AdEx

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When a person begins using AdEx, the first thing that the dapp will request is the type of user, I first explored the interface as an advertiser and then I did the same as a publisher.

As an advertiser, the first thing we will see is the Dashboard, with general stats regarding the bids, and the account token balances. On the left side of the image we can see other options that will be explored in the following images, and in the top right corner, we can see the metamask logo, which is a requirement in order to interact with the blockchain.

When clicking any of the top 3 balances that can be seen on the right side of the previous picture, we are taken to the bids section, in which the advertiser we will able to manage everything regarding the active bids, there are also proper filters to make everything easier in those cases where the advertiser is very active and has lots of bids.

The next section is the one where the advertiser can see everything about the ad campaigns, whether they are active or are already finished.

I created a test campaign just to show the information that's required, it was a very easy 3 step process that can be seen below:

Ad Units were the next section that was explored, we can see here the beginning of the process in order to create an ad unit:

Here we can see the final information of the little test I did. It was all very straightforward and with no complications.

Once the advertiser has become active, the information about every transaction can be accessed in the corresponding section. As usual, there are all the necessary filters that could be needed when searching the transaction history.

Finally, in the account section that can be found in the lower left corner, we will see the available balances in the wallet, exchange or in AdEx bids.

As a publisher, the interface is actually the same, with only 2 sections being different. The first one is the channels (different websites or apps) section. Just as with some of the Advertiser sections, there are enough filters to make it easier to find a particular channel, this is especially useful for those publishers that are very active and own several sites.

Creating a new channel is extremely easy with just 1 step to input the info, and a second step to review and confirm everything is correct.

The second section that is only for Publishers is the Ad Slot section with the always present filters:

In the next image we can see all of the information required to create an ad slot, as well as the info I used to test this feature:

AdEx incoming developments

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This protocol is in active development and 2019 is going to be a very important year with some big announcements, such as allowing any user to use the dapp without having a crypto wallet (May 2019), the presentation of the validator stack version 2.0 (August 2019), which will "significant technological improvements, most notably a DB abstraction for improved performance" ^Source and lastly in September 2019 the development team will release the AdEx Registry testnet.

AdEx’s most important positive aspects

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• AdEx has a very intuitive and easy to use interface, which can make it easier for users to adopt this protocol.
• AdEx is capable of creating any important metric that advertisers need in order to manage their ad campaigns in the most effective possible way.
• Ad fraud is going to be greatly reduced, which means less money wasted for advertisers
• Users will be in total control of their privacy, and can even select the type of ads they are open to see.
• Thanks to the absence of extra fees, the money will flow more efficiently than before.

AdEx’s most important negative aspects

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• There seems to be no strategy to bring awareness to the market that could encourage advertisers to adopt blockchain based ad protocols instead of continuing with the traditional ad networks.
• A presence in the mobile market with an app for iOS & Android would be great, this way advertisers could manage their campaigns on the go without the need of a computer.
• When using the dapp it indicated it was still a beta, there isn’t a finished product yet.

Conclusion

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The team at AdEx is creating an amazing protocol that can bring a lot of benefits to the digital advertisement industry, improving the experience of every type of user involved, and making it harder for fraudulent parties to get away with their scams.

The interface is very easy to use for both publishers and advertisers, but more importantly, the entire experience when using metamask was very smooth. Nevertheless, there is still a lot of work to be done to call AdEx a finished product, but the project certainly has a lot of potential, and everything that has been developed so far is great.

However, given the fact the advertisement industry is a multi-billion dollar industry, it is clear that competition will be fierce and simply offering a more advanced protocol might not be enough to gain a proper recognition from the market, especially when there are multinationals that are ruling the space. This is why in addition to continue with the development, AdEx should also focus some efforts on marketizing their product that can help people understand why AdEx is a superior option. In the whitepaper v.8 it is indicated that 20% of the budget is going to be destined to marketing, which is a very good thing to know because it means the team is aware on the importance of such strategies.

Due to all of these reasons I give this project a 4 stars rating:

^Source

More information about this project can be found in its website and in its State of the Dapps page.

AdEx on social media

Repository

https://github.com/AdExNetwork/adex-protocol-eth

Resources

AdEx protocol
AdEx Whitepaper v.8
AdEx and Ad Fraud
AdEx roadmap
State of the Dapps - AdEx

DISCLAIMER

This is not a financial advice. Please do your own research before investing in cryptocurrencies or any digital asset. This blog post is done for entertainment and knowledge purpose only.