Advertising services and software agency Mediaocean LLC today announced a partnership with IBM iX, IBM Corp.’s business design division, and the launch of a digital ledger blockchain platform for transparency in digital media advertisement supply chains.

Mediaocean and IBM iX brought together a consortium of advertisers, agencies and publishers – including Kellogg Co., Kimberly-Clark Corp., Pfizer Inc., Unilever plc and IBM Watson Advertising – to build a solution that would provide a transparent and historically auditable distributed database to enhance accountability and transparency for advertisers.

Mediaocean today processes more than $140 billion in ad spend and provides an end-to-end campaign management system, which the company dubs an “operating system” for the advertising industry.

“For over 50 years, Mediaocean has been the system of record for the advertising industry,” said Bill Wise, chief executive of Mediaocean (pictured). “We have done so by providing reliable, neutral and integrated systems for brands, agencies and suppliers to execute media, globally.”

According to the statistics agency Statista, the digital advertising industry is estimated to have seen advertisers spend more than $229 billion during 2017. The industry is expected to grow to $335.5 billion by 2020.

“In recent years, however,” said Wise, “the industry has been plagued with unsustainable economics and transparency issues that hinder progress – particularly around intermediary fees and nonworking media.”

Wise said that he believes that blockchain technology will form a foundation for lowering ad spend costs and reduce inefficiency. As for economics, Wise said that of every dollar spent by an advertiser only 30 to 35 cents ends up being used by the publisher or “viewed” by the consumer. The result, Wise said that more than 60 to 65 percent of a “tax” goes to the middle and, when compared to traditional advertising formats, this is not sustainable for growth.

The IBM-built blockchain solution would provide visibility into the entire lifecycle of advertisers’ supply chains from the issuance of purchase orders to the execution of media and payment. Using blockchain technology, an automated system would efficiently record every transaction between Mediaocean and any other party for advertising services could be recorded in an indelible record.

The blockchain record is also distributed, so although it is a single source of truth for all transactions, it also exists across the entire advertising ecosystem and can be compared to every other copy of the database to provide authenticity. The idea behind this is to increase the trust value in the database of transactions, lowering the chances that fraudulent or false transactions could be included after the fact.

Automated systems, a single point of trust and an easily auditable record mean less time spent on expensive systems to ensure validity, archive transactions and otherwise manage advertising supply chains. With the adoption of blockchain technology to streamline these parts of the supply and delivery, Mediaocean hopes to save money for advertisers, publishers and distributors.

Other advertising platforms have sought blockchain systems to combat fraud and increase efficiency for advertising supply chains, including adChain from MetaX and an Ethereum-based advertising blockchain by Lucidity. Comcast Corp., Walt Disney Co. and NBCUniversal also joined forces last year to build the Blockchain Insights Platform, a blockchain-based advertising solution that would protect consumer privacy while also providing a premium advertising analytics solution.

“Blockchain is creating new ways of doing business across industries, particularly where greater trust and transparency is required,” said Babs Rangaiah, executive partner for global marketing at IBM iX.  “As it relates to media, we expect blockchain to be able to provide a single source of truth to any given media buy, eliminating the doubt and uncertainty that is common today.”

The program will launch in July and used the IBM Blockchain Platform Starter Plan, a service built to allow enterprise businesses to get up and running rapidly with a blockchain platform.

Image: IBM