With fraud prevention such a major issue for the advertising sector, a logical first place to look for value in blockchain technology is its ability to deliver higher levels of transparency and security. The object here is to mitigate scenarios where customer and ad agency relationships become seriously compromised due to these issues.
In January, Ethereum-based blockchain technology firm adChain began a partnership with the decentralized application studio ConsenSys to create a key blockchain solution tailored for the online advertising industry.
The adChain protocol works across all digital advertising channels, enabling participants across the supply chain, from advertisers to demand-side platforms (DSP), publishers and safety vendors, to create a synchronized, fluid ecosystem free of fraud, bot traffic and malware.
Built on the adChain protocol, MetaX develops blockchain-based protocols and decentralized applications that provide utility and value to the digital advertising industry, serving as the actual bridge to access the adChain protocol.
The company, based in Los Angeles and founded by advertising industry veterans, allows the digital advertising supply chain process to flow in a trustworthy and secure way using blockchain technology. The MetaX platform is currently in operation with select private beta partners.
Founding team members include ad tech veterans who've been curating and developing, in collaboration with ConsenSys, this working concept for nearly two years. With today's announcement, they are now bringing it to market.
Targeting the Advertising Industry
This joint effort targets the online advertising industry, which is primed for disruption, particularly with the rampant fraud and inefficiencies in the media supply chain . This move signifies another vertical where an Ethereum-based blockchain is ideally suited to make serious headway with the aforementioned ad-industry issues.
Says Joseph Lubin, founder of ConsenSys : "The digital advertising industry is experiencing tremendous growth while increasingly struggling with problems like ad fraud, offering an ideal use case for blockchain technology. The MetaX team are experts in digital advertising. It was a perfect complement to work with us, the largest blockchain startup, in helping the industry solve these problems and become more efficient and transparent. The development of the adChain protocol on the Ethereum platform brings a powerful and unparalleled approach toward reaching these goals."
The platform endeavors to resolve fraud and trust issues through the following:
- End-to-end transparency where a trustworthy, holistic view of all data related to an impression is easily accessible
- Campaign coordination and auditing that provides advertisers with a comprehensive audit trail for everything related to a campaign (e.g., participants, media and placements)
- Fraud identification: Being able to identify and blacklist in real-time at a protocol level, routing out and neutralizing it before significant damage can take place
- Real-time reconciliation and data collection so that advertisers and their vendors can see where other problems arise across the supply chain and take advantage of coordination efficiencies to help track/solve issues
- Cryptographically secure event processing where through the use of the the MetaX platform, advertisers and publishers can execute massive transaction volume while maintaining integrity and security of their impression data
- Comprehensive data that complements existing safety vendors and fraud prevention solutions by providing secure and comprehensive data
- Ad-friendly tracking beacons and basic scripting that allow MetaX and the adChain protocol to seamlessly integrate with the industry's existing solutions, enabling interoperability and easy adoption by the digital advertising ecosystem
Today's announcement comes as the digital advertising innovation age is in rapid acceleration mode, arguably at a pace beyond what standard industry protocols can support. This has led to vulnerabilities in the ad ecosystems, as well as deceptive practices.
Blockchain Technology Is Right for Digital Advertising
Digital advertising is a massive growth industry with global ad spending reaching $542.55 billion in 2016. Ad fraud is rampant, costing the industry over $7 billion a year . Analysts predict this figure could balloon up to $20 billion by 2020.
It's here where blockchain technology is seen as a viable solution. A blockchain can deliver a detailed audit trail through its immutable ledger - something that has high appeal in the advertising world. The end result is a highly scalable, trusted solution for tracking and verifying advertising impressions, allowing media buyers a 100-percent transparency window into the supply chain.
James Young, chief technology officer at MetaX, spoke highly of ConsenSys as a partner, noting its contributions to blockchain scalability and to permissioned privacy tailored to digital advertising. He called 2016 the year of the digital advertising "mortgage crisis, citing the ongoing scenario of Methbot , which he says has defrauded the digital advertising industry anywhere from $3 million to $5 million a day, underscoring the importance of this collaboration.
Ken Brook, CEO of MetaX, believes the fusion between blockchain and ad tech is just at a beginning stage. He notes the recent announcement of NASDAQ's new blockchain-based exchange, known as the New York Interactive Ad Exchange (NYIAX), as key to their push toward more transparent and secure media transactions. Brook also believes we will see data management platforms that utilize blockchain technology emerge, possibly allowing the retargeting/tracking services that offer some form of a blockchain ID rather than the inefficient cookie.
Concludes Brook: "Given the amount of hype around blockchain [technology], I imagine we are going to see several key storylines emerge this year in the digital ad space."