Lucidity

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Lucidity is an advertising verification company focused on programmatic real-time advertising. Its headquarters are in Los Angeles, with a New York sales office and an international development team.

History

Lucidity is a Delaware corporation (KR8OS Inc. dba Lucidity) founded in 2017[1], after the founders worked jointly at The Mobile Majority (now Gimbal[2][3]), an advertising firm formed in 2011. The Mobile Majority initially focused on reward-based advertising: consumers played games to win deals offered by companies or advertisers. Although user engagement during the game was successful, getting the user to navigate to customer websites proved problematic. Consequently, the firm transitioned to become a mobile advertising company, offering four main services: AdKit (mobile advertising creation)[4], AdCast (mobile demand-side platforms trying to reduce fraudulent/wasted placement), AdScore (pre-bid placement verification solution)[5], and AudienceArchitect (mobile data management platform)[6]. These products helped the founders to understand the many problems present in the complex supply chain from advertiser to publisher. Specifically, the lack of transparency and difficulty in reconciling advertising spending. These problems in turn created an atmosphere for fraud and waste to percolate throughout the ecosystem.

Lucidity was founded with the idea of shedding light on the disjointed and fractured ecosystem, in order to track programmatic advertising through the sales lifecycle, and identifying supply path breakdowns that led to the fraud and waste. By reconciling in real-time the trail of information from each and every programmatic advertisement, Lucidity felt they had the ability to enhance ad-campaign ROI’s for their customers.

Products and Services

Lucidity's core product is an online service that allows companies to monitor their programmatic advertising supply chain. Programmatic advertising allows companies to automatically place digital ads on websites and mobile apps of other companies. Some of these advertisements are sold directly. Other ads are sold using real-time bidding (RTB), with a multi-layered supply chain, effectively a wholesale marketplace, that links the advertiser (e.g., Toyota) to the end destination website or mobile app (e.g., bbc.com). This RTB supply chain consists of demand-side platforms(DSP) and supply-side platforms (SSP) that aggregate information, which is then settled at an ad exchange in the middle of the process which intermediates the RTB process, and other entities that facilitate information linkage data management platforms (DMP) and finally ad verification companies which, primarily through random sampling, test the efficacy of the process.

Although there continues to be tremendous growth in placing advertisements through the programmatic segment, it has not come without problems. Industry estimates are that $20+ billion USD in ad fraud and waste occur in programmatic advertising, due to non-human interactions (e.g. bots), broken links within the ecosystem (typically temporary in nature), and also from nefarious actors who look to profit from the large quantity of dollars which are spent in programmatic advertising at large. A 2020 ISBA Programmatic Supply Chain Transparency report [7] studied in depth the issues the programmatic sector faces, with recommendations of where to target reform, highlighting the complexity of the market and lack of transparency which bring about the negative aspects of the RTB process.

which represents about 1/3rd of the overall digital advertising market (a $350+ billion USD market; search-based advertising being the other main segment).

Lucidity's Solution

Lucidity has created a SaaS-based enterprise solution to bring transparency to the programmatic supply chain, which will allow for reductions in fraud and waste which occurs in the programmatic ecosystem. Lucidity's solution is centered around verifying ads on a deterministic level (per-ad, instead of random sampling which has been the heretofore model), and does this verification on a real-time basis. Lucidity has created an infrastructure that can handle the voluminous datapoints (essentially transactional records between resellers of the advertisements placed) which may be collected from all members of the digital supply-chain, as well as first-party data emanating from trackers inserted by Lucidity in the advertisements placed. This information is aggregated and verified by Lucidity's proprietary algorithms and protocols, which facilitates a data-cleansing that enables insights which advertisers may act upon to enhance their advertising efficiency/spend budget. This data is analyzed through Lucidity's web-based software tool, allowing for advertisers to understand which supply chains are working well and which are not, and then divert ad spend to the most effective supply chains. Given the sheer size of the market, the infrastructure is built to support tens of billions of advertisements daily: collecting data, cleaning the data, and finally analyzing the cleansed data set in order to generate actionable insights by advertisers which reduces fraud and waste, significantly increasing the ROI of advertisers ad campaign budgets. Lucidity's self-service analyzer software has been available to clients since early 2019.

Product Validation

Lucidity was arguably the first company to utilize blockchain technology to create a deterministic solution in the programmatic industry for supply-chain optimization. Their pilot study results in 2018 from a campaign with Toyota put the company on the industry map. The company also has a deep relationship with IAB, as Miguel Morales serves as a member of multiple working groups for IAB, and is a driver of blockchain-based solutions for the industry.

When discussing supply-chain optimization solutions, Lucidity tends to be highlighted as a company leading the efforts in this goal. A few examples of this include:

Lucidity Ad Optimization Report

Lucidity/IAB Industry Analysis

Blockchain in Advertising

Team

Lucidity is led today by Nikao Yang, Sam Goldberg, and Miguel Morales. Their experience spans not only the advertising industry, but also includes technical expertise in building a digital infrastructure which is the base of their product offering.

Nikao Yang, CEO

Sam Goldberg, President

Miguel Morales, CTO

Updates

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The company in question considers the information in the next three sections to be proprietary. As a result, these sections are restricted. Qualified investors may access this information at the discretion of the company discussed. Fees may apply. For further information, contact the editor: info at yugenpartners dot com.

Competitive Landscape

(see above)

SWOT

(see above)

Goals/Results

(see above)

See Also

References

External Links

Official Website

Lucidity named Blockchain Startup of the Year

Lucidity Debuts Digital Advertising Blockchain Protocol


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