Applications of Blockchain Technology for Digital Advertisement – A joint practical course between LMU Munich and ProSiebenSat.1

by Students of Computer Science at the LMU Munich / February 25th 2019

Blockchain technology has received a lot of attention in the last years, not least because of the boom of the digital currency Bitcoin. Apart from being used as a digital currency, the underlying blockchain technology also promises enormous potential in the area of digital advertisement. Trust-building aspects are of special interest here, for example security, fraud detection and prevention, as well as topics like transparency and traceability.

Three student groups and research assistants of the Chair for Mobile and Distributed Systems will research possible application areas and build prototypes to combine blockchain and digital advertisement in a joint practical course between LMU Munich and the IT department of ProSiebenSat.1.

The following sections present a work-in-progress overview of the ideas and projects currently being discussed and implemented by the students.

Project 1: Reliable and quick budget distribution

Budget distribution

This project aims to simplify the payment system in ProSiebenSat.1 advertisement. Given numerous transactions that ProSiebenSat.1 has to undertake between its different clients and further channels to distribute the payment, we suggest using smart contract methods to achieve

  1. easy and automatic transactions and
  2. a reliable and transparent system.

ProSiebenSat.1 currently plays the role of third party/intermediary between customers and online marketing channels. ProSiebenSat.1 receives a customer request to start a marketing campaign that lasts for a certain period. Once the request has been received, ProSiebenSat.1 launches the campaign across a number of online marketing channels (e.g., influencers, YouTube ads, social media) and distributes the number of ad impressions (AIs) they need to achieve by the end of the campaign across the channels . Our idea is to add blockchain tokens as a payout contract for the channels, which automatically pay the marketing channels as soon as they reach a milestone of AIs for their campaign. This allows us to achieve transparency in the distribution of AIs as well as ensure the payment for the marketing channels.

The blocks of the blockchain contain information on every transaction performed during the campaign. Every new token is added to the existing blocks, thus forming a chain of transactions performed by the end of the campaign. This creates a verified and transparent history of the product’s marketing details throughout the whole campaign. We trigger smart contracts as soon as the minimum limit of AIs is reached, for example, a channel may get one token for every 100 AIs until it reaches the maximum limit. Smart contracts would allow ProSiebenSat.1 to keep its leading role to plan a marketing campaign but will save the time and costs of performing transactions between customers and marketing channels. Smart contracts are digital and self-executing at the end of the marketing campaign via the decentralized ledger.

This method offers a simple way of counting AIs and of accelerating the payment process at the end of the campaign. The blockchain system supervised by ProSiebenSat.1 will deliver the planned marketing service to the customers and the payment to the marketing channels. It is important to note that in this scenario, ProSiebenSat.1 still retains its role in tracking and owning the transactions but eliminates services of additional banks or other institutions required in traditional transaction operations between customers and marketing channels.

Technical details:

  • Hyperledger Fabric as our private blockchain.
  • Transparency between peers, but privacy toward the public.
  • Ad server delivers the number of ad impressions.
  • Ad server triggers smart contract as soon as a milestone for one token is reached.
  • Immediate payment to the channel via tokens (Token value is set by the parties).
  • Information about token ownership is stored inside the ledger (wallet).
  • Blockchain is stored at ProSiebenSat.1 (centralized).

Project 2: Blockchain for AdTech

The idea behind our project is to improve the process used by ProSiebenSat.1 to acquire customers and manage its advertising business. Offering and buying ad space will be possible by means of a blockchain, which will not only track the purchasing process but also the individual ad impressions (AIs).

ProSiebenSat.1 can place offers in the blockchain, and potential customers can browse these offers upon request. The purchase could be direct or an auctioning feature can be implemented, depending on the needs of ProSiebenSat.1. Any purchase will be recorded in a smart contract. The customer, the servers of ProSiebenSat.1, and the publisher (e.g., the individual website that displayed the ad) are informed when an ad is shown to a consumer, and they all individually write a set of information for that impression into the blockchain. The information may include any data that makes the consumer identifiable as being of a certain age or gender, as well as information that could help detect obvious ad fraud. In the event that the information between the three parties does not match or if one party detects suspicious activity, the entries can be double-checked for validity.

This idea comes with obvious benefits: Most importantly, it will be substantially more difficult to make up or alter AIs. Ad fraud can, of course, never be ruled out completely, but obvious attempts, such as made-up clicks or clicks from suspicious IP addresses, will be detected – and there will also be permanent, unalterable proof of the incident. This extra transparency will make ProSiebenSat.1 a more attractive choice for customers. Depending on their internal structure, the customers may also be able to interact directly with ProSiebenSat.1 and save money. Lastly, due to the public nature of the blockchain, it will become easier for new publishers to join the ProSiebenSat.1 publishing network.

Project 3: 7Hive


Providing a platform for advertising is often a lucrative way of generating revenue for companies with a great reach. Such a company usually gets paid for every ad that has been viewed by a user. Consuming advertisements is a common way for users to “pay” for content. This generally means watching ads before being able to access the desired service, without any available alternatives. This encourages the use of adblockers which prevent “charging” this user. We propose a crypto currency-based system named “7Hive” to solve this problem.

7Hive aims to provide the end-user with a choice on how to “pay” for the requested services. They can either disable their ad-blocker or allow the company to utilize a part of their CPU power for mining a crypto currency. Furthermore, the concept can also be used for the ProSiebenSat.1 app environment to improve the user experience with less advertisement.

1. Concept

For browser user: After identifying a desktop user with adblocker installed, a small window will pop up, asking the user to contribute for the requested service with some light-weight coin mining worth just a few cents. If the user agrees, the service is provided as usual. If the user does not agree, then the decision on whether the user is allowed to view the content is left open; for example it is conceivable to show a page (similar to e.g. adblock blocker) that explains the need to offer some kind of value in return for using the online service provided by ProSiebenSat.1.

For app user: Different preferences are possible to give the user the choice between watching ads or paying for the content by mining.

2. Implementation

For our project, we will evaluate the possibilities of pool mining and the options for different cryptocurrencies. We will then implement a prototype of a website and an app that implements our concept. At the end of our practical implementation we will evaluate the pay-off and the impact of mining on the user experience.

3. Outlook

If ProSiebenSat.1 were to create their own cryptocurrency (let’s call it 7Coin for now), 7Hive could be used to mine 7Coin. This could be offered to the user base, which could now also mine in their own interest to accumulate 7Coins. This currency could, for example, be used to buy premium services or merchandise. The larger the mining fraction of ProSiebenSat.1’s user base grows, the more stable this currency will become.