2018: The Year Of Blockchain For Ad Industry?

Blockchain technology emerged in the advertising industry as a sort of phenomenon in 2017. Companies like IBM and Microsoft are betting big on the technology that seems to be pumping new life into some of the more established players and retailers, such as Oracle and Walmart.

IBM has dabbled in blockchain for years, but not for advertising. In 2017, IBM ranked No. 1 among blockchain technology providers, followed by Microsoft and Accenture, based on a Juniper survey. The technology moved from financial deals to advertising early in 2017 after companies began developing ways to verify and distribute ad serving and media-buying data to all parties.

Machine learning and artificial intelligence will create and strengthen the tie between blockchain and the advertising industry in 2018. Proponents of blockchain say the technology will establish transparency with ad buys, improve trust among the ad supply chain and remove the middleman.

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Researcher Markets & Markets estimates blockchain-related products and services will reach $7.7 billion in 2022, up from $242 million last year, reports Bloomberg

There have been numerous companies in 2017 building blockchain technology for the advertising industry, such as Presearch.org, BitClave and and Blockchain Programmatic Corp. (BPC), among others.  

A little-known company, NKOR, also created blockchain technology for copyright infringement to protect content creators. In July 2017, Google researchers reported that Chainalysis, UC San Diego, and the NYU Tandon School of Engineering used blockchain to track $15 million in ransomware.

The biggest issue in developing blockchain that works for the advertising industry has been speed. Older blockchain platforms could only read and record about 10,000 transactions per second. But companies have developed technology that lays on top of the blockchain to speed transactions.

BPC cofounder and CEO Pavel Cherkashin said in an earlier interview that for real-time bidding to work efficiently, it must record at least 1 million transactions per second. He said technology has reached that number.

Companies will begin pouring more money into the technology. Investment funding to blockchain and bitcoin startups has gone from almost no investment in 2012 to more than $500 million in each of the past two years, reports CB Insights. 

Using CB Insights data, the firm identified several blockchain startups that have closed initial coin offerings greater than $500,000 since 2014 and are related to the media and advertising category. Some companies will straddle multiple categories, but the analysis categorizes each company based on its primary use or most apparent line of business.

For media and advertising under CB Insights watchful eye, companies focused on securing digital records of copyrights and trademarks and token-based advertising models. Brave’s Basic Attention Token, which focuses on changing how advertisers, publishers, and consumers interact online, raised $36 million.

Others include Viberate, Adex, Poet, XPlay, AdToken, SingularDTV, Opus, Synereo, Decent, Lunyr, Rasputin Online, and Voise.

How-to videos have always been one of the top searched on Google's YouTube platform, but in 2017 "How to buy bitcoins" came in at No. 3. Bitcoins, of course, are used to pay for services on blockchains. The increases in searches show the uptick in interest. 

6 comments about "2018: The Year Of Blockchain For Ad Industry?".
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  1. Patrick Stroh from Brunner / data science, analytics, January 2, 2018 at 10:08 a.m.

    Lots to digest here.  I do think it has tremendous potential.  And the creation of "ad blockchains" with speed/transparency/trust is critical. It will be fascinating to see how the existing digital ecosystem (DSPs, etc.) will evolve over the coming months to disrupt and transform their existing operations.

  2. Ed Papazian from Media Dynamics Inc, January 2, 2018 at 12:14 p.m.

    Laurie, blockchain has nothing to do with traditional media nor is it an "advertising" instrument. Rather it is a method by which some measure of "tranparancy" can be introduced for digital media buys. But that's all. So why does your headline imply that blockchain is of such vital importance to "advertising", when its just about one aspect of digital media buyibg?

  3. Laurie Sullivan from lauriesullivan, January 2, 2018 at 12:25 p.m.

    Ed, though traditional media isn't bought and sold digitally, why not use blockchain to support some form of 'traditional' media buying? Blockchain will be used for all types of transactions and processes that the industry has yet to discover. 

  4. Ed Papazian from Media Dynamics Inc, January 3, 2018 at 11:05 a.m.

    Laurie, blockchain is designed to deal with a digital media issue----a big problem. What problem does it solve for network TV, radio or magazine media buys?

  5. David Cooperstein from Figurr, January 3, 2018 at 11:13 a.m.

    Have you looked into Kochava's XCHNG and the Nasdaq-based NYIAX? Seems these should be part of your ongoing coverage since they are fairly active already. 

  6. Laurie Sullivan from lauriesullivan, January 3, 2018 at 11:13 a.m.

    Ed, It's not only digital media issues. It's any transaction between companies that can be tracked from machine to machine. In time we will discover how it will solve for network TV, radio and magazine buys. How about smart contracts, for example? In the Tuesday edition of Data and Programmatic Insider, there is an interview with an Adobe exec who talks about smart contracts, all done through digital channels because it's a machine-to-machine application. I'm not saying that blockchain is the catch-all, but I think we will see some interesting applications for the technology this year. I'm not even suggesting that digital channels are best.

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