Blockchain Founders Group & Blockrocket back privacy-focused blockchain advertising platform AdHash
Authors: Benjamin Horvath and Wolfgang Männel
We are excited to announce that we have recently joined our colleagues from CV VC and CoinIX for the oversubscribed late-seed round of AdHash, a privacy-focused blockchain advertising technology platform.
We have been most impressed by the founders’ team and their ingenious solutions to a $400bn industry plagued by constant privacy violations, regulatory uncertainty, gross inefficiencies, and a general lack of trust between market participants.
In this article, we want to describe the rationale behind our investment.
The death of the cookie marks the most significant shift in online advertising
Online advertising can be a scary thing. We are used to seeing ads for products that we looked up on Amazon or Google coming up on all sorts of unrelated websites for the next two weeks. And sometimes it feels like we only talked about products, and then they show up wherever we browse.
But let’s go back a step first.
The most significant innovation in online advertising came about in 2005 with real-time bidding advertising (RTB), allowing advertisers and publishers to serve relevant ads to specific users. This happens in milliseconds and at an unprecedented scale.
The technology is based on omnipresent third-party cookies or similar digital fingerprints that allow advertising companies to build detailed behavioral profiles of users across websites and platforms. As Google and Facebook had the most personal information of internet users, they could capture a considerable market share. This technique is called behavioral ad targeting.
But growing awareness about the transparency of internet users and data privacy abuses like the Cambridge Analytica scandal with its role in elections and referendums triggered a backlash from users concerned about their privacy. Moreover, it increased scrutiny from data regulators who established protective mechanisms like GDPR, CCPA, TCF, DPC, etc.
As a result, the industry had to react. Privacy-advocating Apple started blocking third-party cookies in their browser versions already in 2020, and Google announced that it would do the same at the end of 2023 or even earlier.
AdHash changes the advertising paradigm from behavioral to contextual
Before behavioral targeting, contextual advertising was how brands would make their ads relevant. It focused entirely on the connection between the ad and the surrounding article. Publications back then were the gateway to the consumer.
While it may seem that behavioral targeting is more effective, there is plenty of empirical evidence defending contextual targeting as equally, and in some cases more effective than behavioral targeting. This is primarily due to two things — third-party data can be both wildly inaccurate and very expensive.
According to research conducted by Nielsen, the on-target percentage for most targeting criteria rarely exceeds 50%, and in some instances, can often fall below 20%.
AdHash is taking contextual targeting to the next level. The company looks beyond the webpage, supplementing text-based and image-based contextual intelligence with real-world contexts, such as changes in stock prices, weather, sports events, and other real-world signals influencing consumer behavior. This allows us to understand the full context of advertisers’ audiences and to deliver targeting that is privacy-focused, accurate, and can deliver at scale.
Using Blockchain technology to create trust and transparency
But AdHash’s innovation goes much further than just eliminating data-privacy concerns. It addresses many of the critical problems of online advertising, like advertising fraud and a maze of intermediaries with questionable value add that can siphon over 70% of the ad budget.
Ad fraud ranges from complex technical tricks to purely disruptive user experience. A study from 2018 estimated that it costs advertisers and publishers approximately $19bn, and that number is probably closer to $30bn in 2021, given the continuous growth of online advertising since then.
For all participants to work in a trusted environment, there needs to be a standardized method of administering ad identifiers on an industry level, not just a platform level. While there are many ways to generate a unique ad identifier, the critical distinction is to make it universally verifiable and tamper-proof. This is where AdHash’s trustless protocol for digital advertising comes in. Key components are stored on a blockchain and use a unique combination of cryptography and distributed databases.
AdHash works without relying on personal data and cookies. Instead, it targets people by reading contextual signals to achieve relevance while respecting privacy. As a result, users are given complete visibility into who is targeting them and why as well as full control over the ads they don’t want to see.
AdHash intends to solve the great advertising dilemma and create a world where advertising sells products to people without turning people into products.
The AdHash team is as good as it gets
AdHash’s founders’ team has many years of experience in the AdTech space and has built up two advertising platforms since 2014.
CEO Martin Stoev, COO Adriana Taseva, CTO Damyan Stanchev, CFO Nishchal Basnyat, and colleagues have intimate knowledge of the advertising world and are not afraid of the big players. In 2017 they brought a class-action suit against Google that already resulted in Google paying $ 75m back to advertisers.
AdHash is located in Zug, Switzerland, with a development team working out of Sofia, Bulgaria. They took part in the CV Labs Incubation Program in 2019 and were a successful participant in the Blockrocket Pitch Event in 2021.
We are thrilled to support the AdHash team on their journey to make a big dent in the online advertising world.
AdHash is a privacy-focused advertising platform that takes contextual targeting beyond the page. It combines text and image-based contextual intelligence with real-world signals such as changes in weather, stock prices, sports results, and other drivers of consumer behavior, enabling advertisers to target ads more effectively. Among other things, AdHash offers 25x cost reduction in ad tech fees, 24h reconciliation, 20x faster ad serving for better ad viewability and faster page load, unique ad formats, and granular real-time reporting.
Contact: Adriana Taseva, Chief Operating Officer, firstname.lastname@example.org
Blockrocket is an accelerator program and early-stage investor for blockchain startups in Germany. We offer an exclusive ecosystem to help startups, corporates, and investors to leverage the potential of blockchain technology. Since our launch in 2019, we have acquired numerous well-known partners and mentors and handpicked some of the best blockchain startups among 150 applications for our program.
Want to find out more about our program? Then please visit our website or reach out directly to us.
Contact: Benjamin Horvath, Managing Director, email@example.com
About Blockchain Founders Group
BFG Blockchain Founders Group is a company builder and early-stage venture capital investor. Our team comprises academic and regulatory drivers of the blockchain economy, serial entrepreneurs, and venture capitalists. We love to work with outstanding entrepreneurial talents and bring to bear the full support of our network to make them succeed.
Visit our website or reach out directly to us.
Contact: Wolfgang Männel, Senior Partner, firstname.lastname@example.org