Supply chains and the problems that come with them are nothing new. Take for example, poultry. Based on my (admittedly limited) research, there are about four to five stages in the poultry supply chain before the product reaches the plates of those of us that still consume meat. While this may not seem like a lot of steps, the supply chain is still muddied enough that we encounter critical issues with tracking and ownership, which in the case of poultry can lead to contaminated meat and illness. Add another few steps to this chain with the introduction of resellers and multiple vendors and suddenly those four or five steps swells to eight or 10 and accountability has flown the coop. Sussing out contamination is hard enough with only four or five steps, how can we do it with double that?
Contamination is something that we deal with every day in the adtech supply chain. Vendors buy and sell supply without adding any value, and the cost of an impressions rises as the likelihood of that impression becoming contaminated also rises. How can we start to clean up the supply chain? One solution currently being explored is leveraging blockchain technology to bring about decentralization, transparency and immutability to the supply chain.
Understand the notion of decentralization is critical to understand how blockchain works, and why it is important for advertisers. Currently, large amounts of data sit within walled gardens unable to be audited. This has resulted in some adtech vendors taking advantage of the lack of transparency within the world of digital media. Even reputable adtech vendors have plausible deniability when it comes to fraud. This means that, though they might not be the bad actor, they are also not taking responsibility for the bad acting that is occurring before and after an impression leaves their system. Decentralization allows adtech vendors and advertisers alike to see the entire lifespan of an impression. As a record is kept for each impression to every node on a blockchain, no single entity can make changes without a public record for all to see.
The world “immutable” literally means something that cannot change over time. Immutability on the blockchain is made possible by two key functions, hashes and blocks. “Hashing” is the encryption that is used to mask the identity of an input. If “42 impressions” is written to the blockchain as a metric, it might be hashed as “389f9ef3822e5c88f4b140db82c459064711a52182a3e438b4ebc7ecda62b9bb”. Blocks are made of multiple hashes, and each time an update is made to a piece of data, a new hash is created and added to a block. Sound complicated? It is, which is why it is so hard to compromise the integrity of anything written to a blockchain.
A smart contract can enforce the relationship of an advertiser and publisher with cryptographic code instead of the way things used to be done in an insertion order based system. The party's still need to agree on the terms of a deal, but once that deal is built into a smart contract, it cannot be changed without permissions from both parties--an obvious advantage for both advertisers and publishers.
Is blockchain the cure-all for what ails us? Short answer: it’s a start, but likely not. The fundamentals of blockchain are a huge step in the right direction and the idea of a single source of truth and accountability is promising. While the technology still has a long way to go in order to serve the ad industry at scale, campaigns are currently live that signal the new, transparent future that lies ahead.
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