How Is Blockchain Digital Media's Concern? A Conversation with Ken Brook of MetaX

It's becoming more common to hear industry folks suggest that blockchain holds certain keys for tightening up security in the ad ecosystem--providing verification and reducing fraudulent bot activity. Regardless, it's still common for other media types to respond, with at least a whiff of doubt, "What's blockchain gotta do with me?" In fact, that response is exactly what we named the blockchain-centered session Ken G. Brook III, co-founder and CEO of MetaX (pictured at left), is leading at Ops in New York on June 6.

Blockchain has long been thought of as "that Bitcoin thing," which is where it got its start. Blockchain was and is used as the common ledger for logging Bitcoin transactions. But some folks have looked at blockchain and thought, "Well, it's transparent, it's not owned by any one entity; all activity on it is logged and timestamped, so it's traceable--if it were adopted by the digital ad industry, that could help the fraud problem we have." 

And those ideas, which Ken has illuminated at the most recent AdMonsters Publisher Forum in Palm Springs and in other channels, spurred MetaX's creation of adChain, a digital advertising-focused protocol based off of blockchain.

In advance of Ops, we reached out to Ken and asked him to explain how and why blockchain should be a concern of digital media types. He obliged.

BRIAN LaRUE: Often when people think “blockchain,” they think “cryptocurrency.” What does the blockchain structure look like, from the perspective of everyone in the ad ecosystem? Is there actually one universal block for everything (including Bitcoin)?  

KEN G. BROOK III: If you use an application that is anchored to the blockchain, the UI to users will look similar to the applications that we currently use today. What users will experience is the value and efficiencies of the underlying blockchain technology. The way applications are designed, developed and function will be fundamentally different because it will shift the industry to certain value-driven applications that use the adChain protocol. And if someone is not adding value to the ecosystem, they will be slowly pushed out of these channels and isolated to closed islands. So, on the surface, users won’t see the infrastructure of the blockchain, but they will see the industry change for the better.  

There is not one universal block or blockchain. Think of blockchain(s) like Ethereum, and Bitcoin as a shared ledger or an Excel sheet that is secure and updated by consensus. If everyone is responsible for producing data on this Excel and they’re impacted by this data, then they need to approve the updates of the data on the ledger. Every line item in this Excel lives forever – this provides an audit trail and the ability to coordinate around immutable data that’s secured. Because of this ability to coordinate around this shared ledger, they will realize the efficiencies that come along with this, e.g., reduced cost of trust, reduced interoperability, discrepancy and reporting issues, the ability to prove data is legitimate from each rightful owner of that data in order to address data rights management issues.     

BRIAN: One of the promises of blockchain in the ad space is that it would establish an audit trail, which would theoretically reduce fraudulent activity. How does this solution differ from other current vendor solutions (verification, etc.) we might be familiar with?  

KEN: Let’s start with the current scenario of how we operate as an industry today, where every ad tech stack is made of different technologies and services and programming languages. If you work with a cloud service, then you also have to rely on that provider’s security. We utilize different technologies from different vendors, and because of all the moving parts, there are discrepancies and inefficiencies.   

Now what if we can carve out a tech stack that’s super-efficient and anchored to the blockchain – and no one owns it? Blockchain is different because it doesn’t change. With blockchain, you can be confident that you’re secure, versus having a huge tech stack with all these moving parts that make the auditing process expensive, inefficient and sometimes impossible.   

It is permissionable so it can be shared with those who have a right to this data. Through blockchain, we can now show in this tech stack how the integrity of the data has not been jeopardized in any way. We can also identify the source of the data.

For example, take a publisher’s first party audience data. We can tell that it’s an identified and verified publisher, and this audience data is coming from this publisher. We can then secure this data for advertisers to base their decisions off. We could also work with a safety vendor that can now analyze a complete and secure set of a data. Utilizing blockchain empowers them – they can be more accurate.  This is a more efficient and accurate way versus the current system.    

BRIAN: One of the problems with bot fraud is that wherever there’s a system, fraudsters will figure out how to game it. How is blockchain any different, or immune from being gamed?  

KEN: Fraud is a cat and mouse game. Digital advertising is an organized industry that uses complex technologies. It takes time to update these systems, and because of this, fraud will always stay ahead of us. Blockchain is different – it’s a new system, a new game with different rules. If fraudsters want to play in this new game, they are going to have to follow these new rules.  

Blockchain is different in that we can decentivize bad behavior. That’s where cryptocurrency comes into play. An effective and proven way to influence people is with money. If you introduce something of value that is native to the blockchain application, you can influence good behavior and decentivize bad behavior. If you design a system that uses cryptocurrency as part of how the system functions, then you can influence good behavior on that system. These are the new rules. If you abide by these rules, you get rewarded. If you break the rules, you get punished.    

BRIAN: How would companies in the ad space connect to blockchain? What’s the barrier to entry?  

KEN: One of the main barriers to entry is knowledge. It also depends on what level of integration companies in the ad space would be open to. This is where we shine. MetaX bridges the knowledge gap and provides the tools to access and benefit from the blockchain. MetaX is unlocking the blockchain for digital advertising. If a company wants to do it on their own, it would take significantly longer, but they’re free to do so. They’ll need to educate and train their teams, and integration takes R&D and investment.   

BRIAN: “Centralized” solutions sometimes sound off warning bells for people in digital advertising, because there’s this apprehension that whoever is overseeing that solution will have a bias. Who would maintain the blockchain, and what should be done to keep vendor bias out of the picture?    

KEN: "Centralized" is a scary word. While blockchain could be considered centralized, it is decentrally owned. Blockchain is fundamentally different in the sense that it’s not owned by anyone. It is community driven. Because of this, the blockchain has no opinion on the business matters being conducted through the blockchain. You can now truly align incentives when you have a vendor that utilizes a DApp (decentralized application) on a "public blockchain" (i.e. Ethereum). They don’t have to trust it. They can view whatever services being provided, whatever application is developed, they can see the business logic in an open source application. It mathematically proves whatever they’re doing is true.  

BRIAN: What would happen if adoption of blockchain picked up for a while, but then stalled out? How much safer and more secure would the ad ecosystem be? Does blockchain’s promise still deliver if only a portion of the marketplace picks up on it?    

KEN: The Bitcoin blockchain was introduced in 2009, and our industry is just now talking about it. Today, it’s being globally adopted as a viable payment system. This decentralized peer-to-peer system has undeniable properties that have the potential to revolutionize the finance industry.  

Even if only partially adopted, the benefits of blockchain will be realized by those who utilize it. For those who are reluctant to use blockchain technologies, then they will continue to be subject to the current challenges we face as an industry, for example, the estimated $20B in ad fraud expected in 2017.

Related Event: 
OPS VIII


Brian LaRue has been AdMonsters' Staff Writer since the summer of 2015. He arrived at AdMonsters with several years' worth of knowledge of media and advertising tech, having written and edited on behalf of publications and tech vendors alike. Brian has been publishing steadily since high school and cut his teeth professionally at regional alt-weeklies in New England. Being involved in print in the 21st century certainly helped inspire his vocal advocacy of digital media. These days, he lives in Brooklyn, NY, where he pursues several threads of an art-damaged semi-secret life.

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