LG Electronics is giving blockchain another chance, but this time it’s taking a much more practical approach. Instead of launching another NFT platform or crypto-related product, the company has built its own layer-2 blockchain network with Arbitrum to improve how digital advertising works.
The partnership, announced on Friday, will work towards making buying and selling online ads simpler and more transparent.
According to LG, the Arbitrum-based network is designed to handle the entire advertising process, from placing and purchasing ads to managing campaigns and settling payments.
By putting those activities on blockchain infrastructure, the company hopes to reduce the number of middlemen involved and automate many of the manual steps that currently slow the industry down.
The project is already moving beyond the idea stage. LG recently completed a pilot program with a Japanese advertising agency and is now deciding whether to launch the platform commercially later this year.
Samuel Byungsun Park, who leads LG Electronics’ blockchain research department, said the company is still evaluating the technology’s real-world value.
“We are evaluating whether this approach can deliver meaningful value to advertisers, publishers and audiences,” Park said.
Digital advertising still relies on a complex chain of middlemen
Though it might not be immediately clear how advertising and blockchain technology are connected, the advertising world has had trouble with supply chain management due to the many intermediaries involved. The advertiser often works with multiple agencies, exchanges, and tech companies before reaching their audience, making the process quite difficult and expensive.
LG sees blockchain as the answer to the problem.
According to Steven Goldfeder, co-founder of Arbitrum, automation is one of the key benefits that the blockchain offers. There will be fewer manual actions because most of the transaction verification and processing tasks will be done by software running on the blockchain.
“You won’t need to intervene manually,” Goldfeder stated.
This means that using blockchain technology for advertising can become a much easier process.
Investors seemed to like the idea, as demonstrated by the rise in value of Arbitrum’s native token, which rose 5 percent after the announcement.
LG’s blockchain ventures
For LG, the deal isn’t its first experiment with blockchain. The company has been exploring the technology for years. Back in 2018, its IT services arm launched Monachain, an enterprise blockchain platform aimed at business applications.
More recently, LG entered the NFT space through its Art Lab marketplace before shutting the platform down as demand for digital collectibles faded. This latest project suggests LG hasn’t given up on blockchain. Instead, it’s focusing on areas where the technology could solve practical business problems.
The development is based on an existing business that belongs to the corporation. The LG Ad Solutions, the advertising department of LG Electronics, currently operates a global ecosystem of about 216 million smart TVs, out of which about 49 million belong to users in the United States alone. It is in such a broad ecosystem that the blockchain advertising services may potentially be launched.
Indeed, this trend is characteristic of all major companies. Although blockchain technologies have faded from the spotlight in recent years, many leading companies still integrate this technology into their operations.
Examples include Samsung, which considered using blockchain to manage its supply chains; JPMorgan Chase, which introduced its own blockchain-based payment infrastructure; and Mastercard, which created settlement solutions based on stablecoins.
What’s more important, many projects are being moved to public blockchains or layer-2 networks, such as Arbitrum.
