Each time a digital ad appears on a computer screen counts as one impression. But how can advertisers be sure theyre paying for the correct number of impressions? That is a complex task.

The CEO of the blockchain protocol company Lucidity says digital agencies hired to help clients boost impressions often cant pinpoint total impressions. They may under- or overestimate the total. Many contracts allow for 5 percent to 10 percent impression discrepancies as acceptable,Sam Kim told ThirtyK. Such discrepancies would fail in most industries.

Kim says Lucidity’s blockchain system can give advertisers and the brands they serve a more transparent view of an ads effectiveness in drawing views. Kim believes such precision will have long-term benefits for the growing digital advertising industry.

His view reflects the industry view of blockchains potential to address a range of issues afflicting digital advertising.

As time has gone by the problem of online ad fraud has only increased with the amount of money at stake.

The Interactive Advertising Bureau, which develops standards for the industry, thinks blockchain will eliminate operational inefficiencies as well as fraud, which cost the ad industry $16.4 billion in 2017, according to one estimate. Thats why IAB now has a Blockchain Working Group that includes advertisers, ad agencies and technology providers, including Lucidity, working on the problem.

The group’s goal is create industry standards for using blockchain technology. Kim said Lucidity wants to help establish a fair playing field in the digital advertising space. What better place to engage than with organizations [that] are also committed to this mission?

Key Issues

As part of the IAB’s effort, Lucidity is involved in a pilot program to verify impressions and provide supply chain transparency through a neutral, decentralized shared ledger, IAB said in its press release. 

Kim and Lucidity co-founders Miguel Morales and Sam Goldberg have long experience in trying to resolve data discrepancies. As time has gone the problem has “only increased with the size of the company, the volume of campaigns and amount of money at stake,Kim explains.

The company’s Ethereum-based blockchain helps advertisers and publishers track advertisements and reach a consensus on marketing data. The decentralized structure of blockchain means that not only can we track and verify all impression-level data, but additionally we can resolve any discrepancies between supply partner reports, identify when impressions are successfully served and loaded, and view a breakdown of performance,Kim says.

To handle a rapid, high-volume transmission of data and make it easier to verify transactions, Lucidity has built its protocol on topof existing blockchains, Kim said. Lucidity calls its infrastructure Layer 2. Instead of having to wait for the root blockchain to verify every transaction individually,Kim says, our Layer 2 solution makes it possible to verify multitudes of transactions simultaneously.

Restoring Trust

Lucidity submitted its first draft of its Shared Ledger Standards, including an outline of its protocol for verifying impressions, to IABHowever, Kim said the company will need to make improvements.

The results from the initial pilot program will help us to refine the protocol including learning best ways to support disparate systems and data standards to improving user interface and experience, Kim says.

Meanwhile, he hopes the IAB working group will draft a white paper outlining clear standards for blockchain applications across all aspects of digital advertising. He believes the groups findings will spur more companies in the industry to adopt blockchain as a way to build trust between parties,which has been a key pain point.

Over the years, vendors, advertisers and publishers have lost trust with one another, which came about as the ecosystem evolved,Kim says. With blockchain technology, parties can trust the system because it is open sourced, transparent and democratic.

Nick Bastone
Nick Bastone worked in startups at Square and Indigo Fair. He now covers tech for Inside.com and writes for publications across the Bay Area.