IBM-Backed Blockchain Trial Takes Aim at Advertising's Middlemen

Online advertising has long seemed a ripe target for blockchain transformation.

Now, a notable partnership involving a blue-chip advertiser and a well-known media brand is testing a private blockchain to see if it can remove some of the adtech intermediaries leeching from their value chain.

Announced today, the ad industry blockchain R&D consortium AdLedger is launching a proof-of-concept with publisher Salon Media and IBM, which is playing a dual role of advertiser and technology provider.

While a trial of a private enterprise blockchain may not seem as radical as bitcoin tipping, it's a shot across the bow of the many middlemen - up to 15 - that take a cut of ad dollars on their way from the advertiser to the publisher right now.

"The shared ledger on the blockchain will act as a single source of truth creating indisputable transparency for both the brand itself and the publisher which will aid in greater accuracy during reconciliation as well as make advertiser spend much more efficient," he added.

Discrepancies abound between the amounts of advertising publishers and advertisers think has been delivered.

The answer can be as many as 15 middlemen from the advertiser to the publisher, she said.

AdLedger's hunch is that a blockchain can expose where all of those cuts are being taken and participants can easily see who is taking out more value than they are putting in, while also providing a golden record of how much advertising is being placed.

"As an advertiser, we know better than anyone that the current digital advertising system is broken," said Chad Andrews, global solutions leader of advertising at IBM, explaining its participation in the trial.

The trial will also demonstrate how recording impression-level data to a shared ledger can provide an instant view, instead of 24 hours or 48 hours later, which means advertisers can better optimize campaigns.