Blockchain, an unmodifiable and unbreachable digital ledger, was conceived 10 years ago to support the cryptocurrency bitcoin. But it has since seeped into new categories, jumping from finance to health care and, more recently, digital advertising.
It's doing so with the backing of big companies like IBM and Comcast, as well as smaller startups like MadHive and Rebel AI.
Why all the excitement?
While government-backed legal tender is secured in bank vaults, bitcoin uses a blockchain ledger to guarantee security by providing full transparency around the currency. The ledger tracks each unit of the currency ever created or transacted, and the number of bitcoins held by any individual as well as the path of any single unit of the currency are visible to all.
By applying blockchain technology to ad transactions, data owners can securely share their assets without exporting or handing them over to another stakeholder. And media owners can strike a blow against unauthorized sellers and domain spoofers.
“Blockchain’s strongest application is for a network where there’s mistrust across the stakeholders,” said IBM’s Media & Entertainment group CTO, Peter Guglielmino.
Despite the ad tech community’s interest in blockchain, the potential applications – and their level of maturity – vary dramatically.
So what can blockchain do for the ad industry?
Weed out unwanted supply chain intermediaries: Blockchain could help secure the supply chain from intermediaries that manipulate inventory or from third parties like ad blockers.
For ousting intermediaries, here’s blockchain’s role: an unethical media seller could trick buyers by creating near-clones of legitimate URLs and tags, like CNN-trending.com or NBCcom.com. A blockchain would stop those capers, since publishers and resellers would be recognizable from their unique blockchain keys instead of gimmicky names, and each unit of inventory would trace back to a true source.
Facilitate data sharing: For most companies, their data is among their most valuable assets. So it’s no wonder that data sharing – even with trusted partners – can be fraught. But some vendors are pushing blockchain as a means to log data transactions, so data owners know exactly which of its available data assets its partners took, and when.
These solutions typically focus on TV ad buying, and require multiple stakeholders to form agreements with each other. In June, IBM formed the AdLedger Consortium with Integral Ad Science, blockchain-based ad tech startup MadHive and Premion OTT ad-buying subsidiary TEGNA. The goal is to build a blockchain data-sharing solution geared toward advanced TV advertisers.
Comcast also revealed a blockchain-based coalition of broadcasters, including Altice USA, Cox, NBCUniversal and Disney, who would share their data and record those transactions in blockchain. So a vetted, trusted media buyer could execute a campaign against segments provided by members of the Comcast consortium.
The process relies on “smart contracts,” automated protocols that manage transactions on a blockchain. So if Comcast and Cox have different inventory rates for specific content or audiences, or if a buyer wants to blacklist certain supply sources, that’s baked into each company’s smart contract and dictates how others on the blockchain can access its data.
Reselling inventory: NYIAX, a Nasdaq-based startup that aims to sell media futures contracts over a blockchain, hopes to make advertisers comfortable with buying future inventory contracts. If successful, NYIAX could give pubs more flexibility in how inventory is packaged. Advertisers could lock up inventory over the long term and pubs could score bigger upfront deals or offer different types of discounts. And in this instance, blockchain would serve as the ledger recording all of these transactions – and their value.