Blockchain, a promising new technology that many believe will transform the financial industry by establishing unbreakable, distributed ledgers governing transactions, is being introduced to help secure advertising transactions.
MetaX, a startup working with blockchain technology developer ConsenSys, officially launched today, offering a new service enabling similar secure distributed ledger technology for advertising and media buys.
Dubbed adChain, the system would ensure that an ad buy’s contract is effectively unbreakable, and that if the terms of the buy are not honored at any step in the process, it would be immediately transparent to any party with access to the chain.
Blockchain technology has already begun to impact financial trading, and is expected to revolutionize many day-to-day aspects of finance, including banking. It is best known as the underlying technology powering so-called cryptocurrencies such as BitCoin and Ether, which can be used as virtual form of currency for transacting any form of goods and services.
“Blockchain has a number of exciting implications for digital advertising,” MetaX Co-Founder Ken Brook said in a statement announcing the company’s launch this morning. “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.”
MetaX is the first of what are expected to be a number of blockchain solutions that will be introduced to Madison Avenue, which has been consumed in recent years by the lack of security and transparency surrounding its transactions, including both explicit fraud and “kickbacks,” non-transparent payments made to agencies by media outlets purchased on behalf of their clients.
“Based on the conversations I am having in this area, it seems that blockchain is an interesting area for the media supply chain to get more educated about,” said Harold Geller, chief growth officer of AdID, a joint venture of the Association of National Advertisers and the American Association of Advertising Agencies that operates an indelible digital code for trafficking advertising assets, including media buys.
Geller says a number of potential blockchain suppliers have begun to circling the ad industry with solutions that would make transactions more secure, but he said the technology requires more research and development before it is deployed for advertising.
“It is a significant change,” he explained, adding that “a change of this magnitude requires an iterative implementation approach, otherwise we will be facing a challenge equal to changing the tires and undercarriage of the car while it is moving 100 miles an hour.”