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Walled Gardens and Bad Neighbors: MadHive’s Blockchain-Based Ad Tech Solution

The sea of first-party data aggregated every second of the day by advertising publishers brings with it a wave of targeting specificity that could only be dreamed about years ago. Programmatic advertising, where online ads are sold through digital exchanges, will undoubtedly be the preeminent marketplace of the future. But it must first contend with a flux of problems regarding trust, fraud and supply chain opacity across the digital industry.

The lack of transparency in the tracking of first-party data is a major cause of concern for publishers, whose proprietary information is threatened with theft, resale and misuse by bad actors down the complicated ad-buy supply chain. This has given rise to “walled gardens” to protect the information which, when combined with inadequate technical infrastructure, severely stifle the flow of data between publishers, brands and agencies. Ultimately, these inefficiencies result in low return on the ad dollar for publishers, less effective audience targeting for brands and agencies and an expensive and ongoing security threat. 

The opacity of walled gardens also makes publishers rely on vendors for the metrics and pay for the same connectivity to the same user several times over.

A Data Aggregation Solution

These problems will ring a familiar bell for the blockchain-versed readership. MadHive CEO Adam Helfgott is doing something about it: taking his expertise at creating efficiencies in complex data models and forming compelling business solutions that focus on how to bring security and efficiency to ad tech.

“I’ve always been astounded by Adam’s understanding of how industries, companies and technology work at a very deep level, and then how to make them work together more efficiently,” said Konstantin Richter, a leading blockchain business strategist.

Inspired by the gross inefficiencies and opaqueness facing the ad tech landscape, Helfgott partnered with seasoned marketing and ad tech executive Stacy Huggins. Together, Helfgott and Huggins developed their vision for a blockchain-based solution. They called their new company MadHive. 

MadHive’s Unified Platform

MadHive is a new take on the traditional data management platform (DMP), which aggregates the data of brands and publishers for effective audience segmentation, lending itself to the prediction of audience intent for advertisers. MadHive provides a unified video ad platform with a real-time artificial intelligence powered by blockchain technology. MadHive’s machine learning orchestration layer harnesses data from disparate sources and seamlessly integrates existing technology. 

Using a private blockchain, MadHive provides smart contracts and crypto-graphic keys for the sale and use of first-party data, creating secure gates for the walled gardens. 

“Our blockchain layer can ultimately form a robust ecosystem where companies throughout the supply chain can have integrity-based tracking and reporting of relevant transactional information,” said Helfgott. 

Huggins, MadHive co-founder and CMO, said that the problems this industry faces today are multi-faceted. 

“We’ve spent a lot of time trying to solve a complex problem, namely that brands and publishers have increasingly more ad tech layers between them and the end consumer,”  she said.

Blockchain also has the potential to save the marketplace billions of wasted dollars every year in misplaced money due to discrepancies between parties. Blockchain’s inherent transparency and the prospect of a shared ledger allows for the effective accounting of impressions served in real time rather than on individual systems where collation must happen afterwards. 

The Opportunity of OTT

Over the top (OTT) TV (think platforms like Apple TV) is still relatively new to the entertainment scene, and even newer to the advertising arena. 

As a perfect hybrid between web and TV, OTT TV creates a massive opportunity to bring the same sophistication of advertising seen in web and mobile into broadcast media. In television, the commercial slots are dictated by fairly rudimentary ratings-based algorithms with abstract turnover information data, while web browsers with IP targeted, actionable advertisements are rich in data returns. 

Given the flexibility that comes with newer technologies and marketplaces, MadHive believes that OTT is ripe for the kind of disruption that blockchain can offer. As such, the company has  also released its front-end product, the MadHive Interactive Stamp. 

The stamp will sit on top of the OTT advertisement and provide a call to action for the consumer, allowing him or her to make an instant purchase of the product being shown. This will also drop a cookie, which will contribute to the consumer’s blockchain-supported data profiles to help clients predict future intent.

Go To Market

MadHive has been experimenting with its technology for the last year and is going live with its multifaceted blockchain product in Q2 of 2017. 

MadHive has a strong footing already, having secured significant investment and a partnership with one of the nation’s leading OTT publishers. The company’s goal is to create a distributed ledger technology consortium in the programmatic video marketplace, so that key players can come together to solve some of the ad industry’s key issues.

Editorial was contributed by Leni Maiai.

This article originally appeared in Issue 01 of Distributed .

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