Solving Ad Tech’s Data Leakage Problem
The ad tech industry is broken in many ways. The most obvious is the “disappearing ad tech dollar” phenomenon, which results from the many intermediaries who separate advertisers from publishers.
Yet there is another deep flaw in ad tech: Data leakage. Data within the ad tech supply chain “leaks” in ways that benefit middlemen and harm advertisers and publishers.
This is the problem that MADnet Data, a decentralized data management platform within the MAD Network, is designed to solve.
Data and the Ad Tech Supply Chain
Data is central to ad tech. Advertisers use data to plan ad campaigns and determine which types of users to market to. Ad tech platforms rely on data to match ads with websites and other outlets. Publishers collect data that can help assess the effectiveness of ads and prove to advertisers that their adspend has paid off.
Yet the problem with data within the ad tech supply chain is that it is not always used to serve the interests of advertisers and publishers. These are the groups that most need data in order to operate efficiently and fairly, but their access to reliable data is curtailed by ad tech middlemen, who exploit data leakage in ways that harm advertisers and publishers.
There are many sources of data leakage, and the technical mechanisms that enable ad tech intermediaries to benefit from leaked data are not always clear, because most existing ad tech platforms are proprietary and, therefore, impossible for outsiders to monitor.
However, in all cases of data leakage, advertisers and publishers suffer because the value in the data that they acquire when leaked is sold to competitors, consequently diluting its value.
Data Leakage Example: Advertising Glasses
As an example, consider what would happen if a web user visits a LensCrafters website. An ad tech platform knows about the visit because it tracks the online activity of the user. The platform uses the visit to deduce that the user is interested in purchasing new glasses.
Given this information, the ad tech platform might go on to display ads for Warby Parker glasses to the user the next time he logs into Facebook.
In effect, data that originated from the LensCrafters website was leaked to an ad tech platform, which used the data to serve ads for a LensCrafters competitor.
The only real beneficiary in this scenario is the ad tech company that serves ads. It is able to use leaked data to serve more ads. Warby Parker also benefits in the short term from the advertisements, but because the same type of data leakage could be used against it, there is no durable benefit for either eyeglass company.
Breaking the Data Leakage Cycle with MADnet Data
MADnet Data is designed with this sort of scenario in mind.
MADnet Data is a decentralized data management platform that is being built as part of the MAD Network. MADnet Data’s core functionality will consist of capturing data from the MAD Network and allowing peers on the network to exchange it.
What makes MADnet Data different from traditional ad tech data collection practices is that, on MADnet Data, data is exchanged in a secure and transparent way.
Because all of the data on the MAD Network is recorded on the blockchain in read-only fashion, it is virtually impossible for members of the network to hide the existence of data or manipulate it.
In addition, by encrypting the data, MADnet Data ensures that if information is leaked from a data source, it cannot be used by a third party without that party’s consent, because the data would not be viewable without the right encryption keys.
Thus, in the example above, if LensCrafters adopted MAD Network as its ad tech solution, data about its web traffic could not be used to deliver ads for a competitor’s products, unless LensCrafters had agreed to allow its data to be used in such a way.
In short, MADnet Data prevents data leakage by enabling advertisers to retain ownership of their data and maintain visibility into how their data is used within advertising campaigns.
MADnet Data and Publishers
MADnet Data also provides a distinct advantage to content publishers. It allows them to generate additional revenue by collecting data about ad’s performance — such as the number of times a digital ad was viewed or where viewers were located — and sell that data to advertisers in a direct, transparent and secure way.
Traditionally, this has not been possible. In most cases today, ad tech middlemen collect data about ad performance, then sell it to advertisers. The advertisers obtain the data at a high markup, and the data may be modified before it reaches them.
With MADnet Data, however, a website owner can sell relevant data directly to advertisers. The website owner will earn more money from the data because no revenue is lost to middlemen, and the advertiser benefits from less expensive, more reliable data.
Making data leakage within the ad tech industry a thing of the past is a core part of MAD Network’s mission. When development of MADnet Data is complete, advertisers and publishers will enjoy the ability to share data across a decentralized network in a way that restores full value of the data to them, while eliminating the need for middlemen to manage the data.
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