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Blockchain for Advertising

Blockchain for Advertising 1

We are excited to announce that the IAB Tech Lab is establishing a new working group with the goal of exploring ways to leverage blockchain to improve efficiency and value realization in digital advertising.

Since it was first described as a fundamental component of the Bitcoin architecture by the enigmatic Satoshi Nakamoto in the fall of 2008, interest in the concept of the blockchain and its possible uses has grown from a few members of the obscure cypherpunk community to the R&D halls of top universities and the boardrooms of fortune 500 companies.

A question is: Why blockchain in advertising?

We believe the collaboration based network effects of Blockchain are already changing the way global industries perform transactions and share data. This shift in paradigms provides mutual benefits for digital markets, advertising being one of the fastest growing industries.

With many initiatives already in the work to adapt blockchain technology in order to address various challenges present in the digital advertising industry, it is important that a framework be put in place to guide the development of a common set of standards and protocols.

It is necessary to understand some of the fundamental characteristics of blockchain to answer this question. First, blockchains create a medium by which two or more completely anonymous or semi-anonymous parties can complete various types of transactions at a low cost.  This has led some to call blockchain a “Trust Machine”.

Blockchain essentially functions as a distributed ledger. Additionally, it possesses two critical features.  First, once data is stored in the ledger, it is typically complicated (more so than with other technologies that are used today) to modify or delete.  Every record on a blockchain is permanent and will last as long as the copy of the entire blockchain exists. Second, the ledger is distributed among all the participants on the blockchain, and each user maintains a complete copy of the blockchain.

There is no centralized controller of the data in the blockchain and no single point of failure for a blockchain’s operations. If one or more users are disconnected from a blockchain, the blockchain continues to function, and no data is lost.

This ability to keep a fully verifiable and immutable ledger or database available to all members of a particular group or market makes blockchain an attractive tool to address challenges as diverse as payment processing or fraud prevention. Such a fundamental technology should not be ignored, it should be embraced, and this is why we are forming this group.

Blockchain technology is already being utilized in the digital advertising space, and here are some examples of the projects and initiatives. It should also be noted that many industries are already well underway even at this relatively early stage of evolution.

  • AdChain is an open protocol on Ethereum’s public blockchain. Its stated goal is to allow for building of decentralized applications, specifically for use in the digital advertising ecosystem.
  • Adex is a decentralized ad exchange that utilizes Ethereum to address problems like fraud, privacy, and consent in the digital advertising space.
  • Amino combines technologies from blockchain, payments, and adtech to bring transparency, integrity, and auditability to online advertising
  • Ethereum is a blockchain based, publicly available open source distributed computing platform that provides a decentralized virtual machine and its own cryptocurrency tokens called “ether”.  These attributes make Ethereum an attractive base for the generation of smart contracts and serves as the foundation of other applications.
  • Faktor is a blockchain-based identity management platform that can be utilized by publishers, advertisers, and individual users.
  • Hyperledger is an umbrella project of open source blockchain initiatives that was started and managed by the Linux Foundation.
  • Kochava is introducing the XCHNG platform, an open-source digital advertising framework based on blockchain technology enabling the industry to operate on common rails.
  • NYIAX, a guaranteed media contract exchange, bridges the space between the financial and digital advertising ecosystems utilizing blockchain in partnership with NASDAQ
  • Rebel AI secures digital advertising and protects publisher identity and brand spend using machine learning, blockchain, and encryption technologies
  • The Basic Attention Token (BAT) utilizes the Ethereum blockchain to create a token that can be used to obtain a variety of advertising and attention-based services on a purpose-built platform.

Much like its successful Content Taxonomy standards, the IAB Tech Lab believes that by soliciting input from players across the industry, it can help introduce and implement standards and protocols for the utilization of blockchain technologies in the digital space.

Our initial goal for the new Blockchain Working Group is to investigate the application of blockchain technology in the business of digital advertising.

The initial areas of scope are fraud, measurement, discrepancy reconciliation for billing purposes, financial transactions, and validation of advertising resources and assets. Additionally, we will assess if blockchain technology can offer definitive advantages and new opportunities of scale.  The working group will evolve standards and protocols and adapt them for blockchain technology.

Since beginning to forming the working group, as member co-chairs, the two of us have been working with the IAB Tech Lab Blockchain Working Group team. The primary step has been to structure what initiatives to execute first to best advance IAB Tech Lab’s commitment to exploring the implications and applications of blockchain and distributed ledger technologies in our industry.

We encourage all interested members to watch out for educational content from IAB Tech Lab. A live member event is being held at MetaX HQ in Santa Monica on October 18 to get everyone up to speed on blockchain and its application to digital advertising (view more information on this event here), with more events to follow. This Blockchain Working Group is now open for business. If you’re an IAB Tech Lab member and would like to participate, email [email protected].


Richard Bush

Michael Palmer