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Kochava expands into blockchain for ad insertion orders
The attribution/measurement provider is expecting to launch its open source XCHNG blockchain-based ecosystem of integrated applications by the end of 2018.
New blockchain-focused startups are springing up right and left, but this week an established mobile measurement firm is jumping on the bandwagon.
Kochava began in 2011 as a provider of attribution and other marketing analytics for mobile, and, in recent times, it has expanded into web, desktop, Xbox, Oculus VR and other channels.
This week, the Idaho-based firm is expanding again with its announcement of an open source blockchain framework for recording online ad insertion orders (IO) called XCHNG (pronounced “exchange”).
This blockchain-based ecosystem of ad targeting, ad serving, billing, payment, attribution and ratings providers is currently existing as an internal alpha at Kochava, CEO Charles Manning told me, following several years of development. The intention is to get other providers of these services — including other attribution/measurement providers — on board and to launch in third or fourth quarter of next year.
Essentially, he said, the blockchain will serve as an immutable record of advertising IOs, providing a protocol and APIs for the other, non-blockchain-integrated ad services. While it won’t support real-time bidding, Manning said XCHNG will run at millisecond speeds, since the integrated applications will.
The IOs will be handled as blockchain-based smart contracts, and the ecosystem will operate as a kind of private marketplace. The IO specifics, delivery and performance specs are available immediately to all parties throughout the blockchain’s shared and distributed ledger. As a smart contract, the IO will fulfill the terms of its own agreement by generating tokens when the ad is delivered and played, and those tokens will trigger payment by the integrated payment provider. Here’s a simple diagram from the XCHNG site:
Manning said Kochava won’t make any money on the buying and selling of ads, with its financial benefit coming as one of the providers of measurement services. His company, he said, is the “steward” but not the authority of this open source ecosystem, which others will also help maintain.
“We’ve invented a standard and are making it open source,” he said.
The reason for using blockchain to store ad contracts and delivery records, he said, is to offer the sort of “standardization and transparency” missing in conventional ad tech.
Manning added that, as an existing vendor, Kochava offers a scale that new startups can’t match. Additionally, he pointed to the fact that Kochava is neutral about buying and selling ads, since that’s not its business.
Blockchain proponents frequently rave about its security and its ability for self-management by developers who participate in its profits. But the short and dramatic history of bitcoin — a series of highly visible and sizable financial disasters by bitcoin exchanges — has contrasted with this techno-utopian vision.
Manning said that the XCHNG ecosystem will be different. Ratings providers will rate the providers of billing, payment and ad targeting/serving on every transaction, he said, insuring that participants can readily use only the most reliable vendors. And all transactions will be visible to participants throughout its life cycle.
And who will rate the ratings providers, I asked?
Other ratings providers, Manning said.