Can Blockchain Solve Advertising's Supply Chain Transparency Issues?

It’s time for advertisers to demand more

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If you follow all the hype around blockchain, you may be led to believe the technology is the answer to all our woes.

Time will tell. But in the short term, blockchain is realistically poised to address some pressing problems for businesses. Chief among them is the issue of transparency in the advertising supply chain.

Today, at least half of every dollar an advertiser spends is typically lost in the supply chain on middleware, mediation and fraud mitigation. In a sign of just how normalized this state of affairs has become, the Interactive Advertising Bureau currently accepts a 10 percent discrepancy in results between publishers and ad agencies. I can think of few other industries that set such a low bar.

But, it doesn’t have to be that way. It’s time for advertisers to demand an improved network for brands and publishers to connect, one that provides more transparency into the performance and details of transactions.

That network is blockchain, and it’s already in the works.

Soon, we believe it will be the most profound re-platforming of the advertising industry since the birth of the digital era. Enabling the industry to coalesce around a common version of truth will allow it to focus on what really matters, which is performance.

With a blockchain backed peer-to-peer network, achieving transparency in the digital advertising supply chain is possible. But, ensuring its success will require the entire industry, including advertisers, ad tech providers, publishers and agencies to coalesce around a shared, auditable version of truth. Such a pact would facilitate a groundbreaking level of transparency across auditing, reconciliation, fraud detection, discrepancy management and payments.

Blockchain doesn’t merely represent a cure for longstanding industry frustrations—it’s a business imperative. Industry forecasters believe the technology could drive north of $80 billion in improved value by 2022.

Eventually, the majority of the industry value made possible by blockchain will be from process and data usage improvements that leverage data related to, but not stored on, blockchain. It’s easy to get carried away now, dreaming about the utopia of consumer-controlled data and blind exchanges capable of joining federated data to improve targeting and performance outside of the duopoly.

Uniting the industry through blockchain will require unprecedented cooperation and innovation, which is why it’s encouraging that AdLedger, a nonprofit consortium of advertising and publishing executives, is already working to create rules and standards around such a network. Currently, it is developing two proof-of-concept projects—one is a media campaign executed through its entire lifecycle on blockchain, the other concerns GDPR compliance.

As our industry moves forward, we must all be part of the change we seek. Together, we can end an era of walled gardens, and begin tending our very own community garden. And that’s not hype— that’s the future.