Introducing XCHNG: A blockchain based, next generation advertising framework.
Last week I had the opportunity to share a bit more about what we’ve been working on outside of our daily activities at Kochava. For years, Kochava has demonstrated our technological leadership in attribution, analytics, fraud mitigation, and audience targeting tools. While we’ve continued to serve as a market leader, we’ve been seeing a tectonic shift that is currently happening around the world.
The shift? The introduction of blockchain across every industry that meaningfully uses software.
A bit of background…
The first digital ad was on hotwired.com in 1994. For those that don’t remember, hotwired.com was the website version of Wired back in the day. Since then, the digital ad industry has grown to represent over $74B in spend with splintered players across the ecosystem.
To give a sense of what splintered means: the following graphic represents the journey to deliver ads from the marketer to the consumer with all of the technology components and individual vendors that could be involved (and this is just for the mobile industry).
Meanwhile, Facebook and Google represent the lionshare of the market in digital ads. They’ve taken this independent “spaghetti” and unified it under a common supply chain and common demand chain. They’ve put in place their own walled gardens (which incorporate the capabilities of all of these boxes) and they’ve made it simple. They’ve made it simple for advertisers to buy audiences that meet their targeting criteria and simple for publishers to sell their inventory and make money. In doing so, they’ve maintained the hidden hand of a centralized intermediary.
While Facebook and Google have a significant market share of media spend as a result of easy targeting and simple supply/demand chain nexus—the rest of the industry is a mess and therefore is not able to participate in any of the meaningful growth in digital ads. In Q1 the IAB reported that digital advertising grew by $3.7B—Facebook and Google represented 98% of this growth.
Digital advertising has reached a tipping point similar to other industries that have required an overhaul in order to remain viable. As an analog, in the 19th century, the railroad industry was experiencing hyper growth. Various independent rail networks were formed across and between disparate markets. Because of the growth, market dynamics, and absence of any appreciation for a unified approach, the gauge of the different rail networks was not initially standardized.
Only once the rail networks were required to interconnect was there a profound observation that a common rail was imperative to enable cross-rail network transport at scale.
At Kochava, we see this as we’re an independent 3rd party. We sit on the sidelines, avoiding any conflict of interest with media buyers or sellers. In addition to being the referee, we have been able to uniquely observe how each of the vendors above have a meaningful and valuable place and how they fit together from a business perspective—and a technical one.
We believe that a better approach is possible using blockchain technologies, we believe we’ve designed just what is required, and we believe that if it’s going to be successful—it has to be open.
Today, I’m introducing XCHNG.
With XCHNG, the future of advertising is simplified, secure, verifiable, scalable and standardized. The XCHNG platform is an open-source digital advertising framework based on blockchain technology enabling the industry to operate on common rails and make it simple for advertisers, agencies and demand partners to buy, supply partners and publishers to sell, and 3rd party vendors to operate against decentralized smart-contract insertion orders (IO’s).
Only by unifying all players on an open system, based on blockchain and specific to advertising, can the industry create a third option to provide advertisers, agencies, demand partners, supply partners, and publishers with choice (at scale) while ensuring privacy for end-users.
Like previous innovations before it, blockchain has the great chance of being implemented in a hundred different ways across the ad industry. Instead of allowing a blockchain schism across digital ads, we believe there is an opportunity to unify—by being open (both in our tech and in our approach). In this industry, Kochava is uniquely qualified to lead as no other technology provider has the unbiased nature, the technological leadership in advertising technology, or the footprint of customers and ecosystem partners comparable to those we already integrate.
XCHNG enables anyone who works with Kochava to be ‘Blockchain Enabled’ through our near-term roadmap. Further, XCHNG paves the way for next-generation growth using decentralized architectures and concepts. Because it’s open, XCHNG even provides a means for our traditional competitors to participate.
I will continue to share more details in the coming weeks about XCHNG, the incentive model we’ve come up with to keep the ecosystem healthy and strong, and the rollout approach that we’ve already begun.
If you want to get involved early on in the open rails of the system we’ve built for the community, please sign up to get involved.