How Blockchain is Bringing Trust to Digital Ad Buys

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It used to be so simple. The supply chain behind a ‘media buy’ was made up of three main players – client, agency and media property – and each type of media came with a single measurement source. But the digital era is making that model obsolete, like rabbit ears or appointment-viewing TV. In today’s programmatic era, new ad tech solutions, complete with adservers and multiple measurement companies, have redefined the ecosystem.

This complex new environment has ushered in a host of issues for marketers, including lack of quality control, security and financial transparency between the many parties involved.

In fact, it’s estimated that roughly 20 percent of spend today is fraudulent.

Executives from many of the top advertisers in the world are demanding a solution – including Unilever, one of the world’s largest advertisers. This topic was a major focus of discussions at this week’s IAB Annual Leadership Meeting. It is also why IBM and Unilever are collaborating on a pioneering project to establish trust throughout the digital ad buying ecosystem. At the heart of it is blockchain.

Why blockchain?

Blockchain enables the secure exchange of digital assets, and we believe it was built to solve these very issues: lack of transparency and murky reconciliation. With Blockchain, once a transaction is validated through a consensus process, it’s instantly committed to all ledgers in the network. To compare it to something more common, consider email. When you send an email, you’re actually sending a copy, so there are copies in multiple places. With blockchain, you have a whole ledger or database that securely stores entire blocks of information, so changes in any one place are then reflected everywhere.

Additionally, the design prevents data from being altered retroactively, ensuring the verifiability and integrity of transactions. By providing participants full transparency into the process, blockchain guarantees status accuracy and minimizes the risk of manipulation.

Blockchain has the potential to be transformative for the advertising industry, among many others. As our CEO Ginni Rometty says, “blockchain could do for transactions what the internet did for communications.” Blockchain will not only ensure trust and transparency, it can help advertisers of all sizes reduce transaction costs, increase efficiency, simplify contracts and improve invoice processing.

IBM and Unilever team up on Blockchain for media buying

IBM and Unilever are already underway with the first Blockchain solution for media buying. Using IBM Blockchain and designed by IBM iX, the solution will start with basic financial reconciliation solutions for digital media buying and will lay the foundation for solving multiple problems across the ecosystem. Most importantly, it will provide greater transparency for advertisers.

The first phase of the program aims to identify and correct issues of reconciliation by providing a unified view of audience delivery. By using smart contracts that validate the agreed figures, discrepancies are cleared right away versus trying to clear weeks or months after as is the case for many media buys. To date, we’ve tested the solution against historical data and the results suggested directionally that we will get what we’re looking for – a reconciliation and unified view.

It is time for the industry to drastically reduce ad fraud and significantly improve measurement standards. Using blockchain, we hope to revolutionize the media buying industry.