Blockchain technology is currently being trialed and implemented to disrupt the status quo of systems, processes, and business models in a broad range of industries. From financial services, supply chain management, and cyber security to cloud storage, the music industry and even the philanthropy sector, the distributed ledger technology is poised to change the way data of any kind is recorded, stored, and transferred.
Los Angeles-based startup MetaX is targeting yet another area where the distributed ledger technology can be applied, the digital advertising industry. Digital advertisers have long struggled with ad fraud, ranging from phantom ads that no one ever sees to bot traffic and malicious adware that infects their clients’ prospects’ computers. Overcoming ad fraud is the challenge for MetaX co-founder and CEO Ken Brook with his self-funded startup by launching adChain, the first blockchain developed for the digital ad supply chain.
MetaX Aims to Improve the Digital Advertising Supply Chain with adChain
AdChain is a distributed ledger that is shared among all relevant parties in a digital ad campaign and used to record and store data such as impressions and audience segmentation. A company looking to run digital adverts can purchase ad impression through a platform that locates target audiences for the company on ad exchanges that give access to digital publishers. The impressions are then encrypted and sent to each campaign stakeholder on the blockchain who then approve the impression. Once approved, the block becomes part of the blockchain, and the impressions are verified by the network.
“Blockchain has a number of exciting implications for digital advertising. Fraud prevention is a natural first application given the transparency and security blockchain brings, and because fraud is such a major issue for the advertising sector,” said Brook.
The adChain’s main advantages to digital marketers include end-to-end transparency, campaign coordination, and auditing, cryptographically secure event processing, exposes fraud, real-time reconciliation and data collection, comprehensive data, and ad-friendly implementation.
By proving end-to-end transparency, brands and marketers will be able to have a trustworthy view of all relevant data related to a digital advertising campaign. As the adChain also offers campaign coordination and auditing, both advertisers and publishers will have a detailed audit trail associated with each of their ad campaigns. Fraud can easily be recognized and neutralized in real-time on the adChain so that no significant financial damage can occur.
Through real-time reconciliation and data collection, stakeholders in each ad campaign can see where problems are taking place in the ad supply chain and immediately act to resolves the issues. Moreover, the use of cryptography allows advertisers and publishers to execute a large number of transactions while maintaining the security and the integrity of their ad impressions data and the comprehensive data that is collected is used for fraud prevention measures.
AdChain also offers an ad-friendly implementation that allows its protocol to be easily integrated into existing industry solutions to enable interoperability and adoption by the broader advertising industry.
By developing a digital advertising system using blockchain technology, there is no need for trust between advertising buyers and sellers as all transactions and all ad campaign data is recorded and stored on the distributed ledger for all stakeholders to see. Furthermore, as there is no single point of failure and no centralized owner of the ledger, all recorded data is secure and cannot be falsified. And since the blockchain can provide a detailed audit trail, all transactions and data points can be viewed and assessed accordingly, which creates a reliable and transparent solution for advertisers to track and verify tracking ad impressions, which MetaX is in the process of establishing with its adChain platform.
MetaX Partners with ConsenSys to Develop adChain
To develop adChain, MetaX reached out to leading blockchain startup ConsenSys to help co-create the new distributed ledger for decentralized ad-centric applications built on top of the ethereum blockchain. New York-based ConsenSys is a software development consultancy that builds decentralized applications (DApps), enterprise solutions and developer tools for blockchain ecosystems.
ConsenSys founder and CEO Joseph Lubin stated:
“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.”
AdChain is currently in a private beta testing phase with several unnamed companies. While fraud prevention is the initial focus of the platform, MetaX also plans to build decentralized applications (DApps) on top of adChain to allow marketers to use a blockchain bidder that provides better ad targeting and security. MetaX intends to monetize the platform through a subscription-based model.
Industry-wide Adoption is Needed For AdChain to Succeed
Thomas Benton, CEO of the Data Marketing Association (DMA), a trade association for marketing and advertising, stated:
“It’s inspiring to see smart start-ups take on providing innovative solutions to challenges in our industry that are resulting in fraud and injuring marketers’ relationships with their customers.”
Benton also added that, “the DMA is eager to see its members, like MetaX, provide innovative and trust-based solutions that support the client and supply sides of our industry around ad-fraud and other system-wide pain points.”
MetaX’s adChain looks like a very promising and much-needed solution for digital advertisers. For adChain to succeed, however, it will require industry-wide adoption so that it does not become just another digital advertising platform among many. The largest digital advertising platforms, Facebook and Google, will most likely not embrace the adChain as they are big enough to develop their own solutions to improve their platforms.
Having said that, given that the adChain’s protocol has been designed to be interoperable with existing digital advertising systems and given the industry’s urgent desire to reduce ad fraud, MetaX has a real chance to inflict lasting change in a booming industry that is not going away anytime soon.