There is a lot of chatter about blockchain these days, but what can blockchain technology actually do for the advertising industry? What are its general applications in the real world? Fighting fraud? Disinformation campaigns? Content monetisation? Will this really help the media supply chain, and how?
How long until we start seeing some steak added to the hyped sizzle? What do people need to understand/learn and what are the challenges businesses will encounter along the way?
We asked a roundtable of executives for their predictions around blockchain/crypto and the ad industry in the year ahead. Hear more from from these experts on Tuesday, 27 February in NYC at Blockchain Xplore, a one-day, educational conference designed to drive a deeper understanding of the potentials of blockchain-based technology for the digital advertising industry.
Program the incentives by programming the money
"A fundamental incentive problem in ad tech is the structure of payments. Everybody downstream of the advertiser is paid on volume, so publishers buy bot traffic and intermediaries turn a blind eye. Advertisers have no credible means of auditing whether their spend is real, and vendors upstream of the publisher can plausibly claim ignorance in the rare instances where fraud is detected. With blockchains, advertisers can conduct business directly with publishers on a peer-to-peer basis. To authenticate in peer discovery, publishers will need listings in on-chain registries, whose token-holders are incentivised to discover malfeasance and confiscate the deposits of bad actors. When you can program money, you can program incentives; ad tech's problems are incentive problems."
Mike Goldin, Lead Engineer, ConsenSys Ad Tech
Education & user experience need to be addressed
"Blockchain hit the mainstream media in late 2017, however few truly understand the new technology and even fewer have implemented it in any meaningful way into their existing businesses. Many have found that integrating existing business processes with public blockchains and/or decentralised applications to be much more challenging than envisioned. Aside from these technical challenges, education and user-experience are the other key areas that need to be addressed in order for large-scale adoption to occur. While these challenges are significant, the core components of blockchain technology that include immutability, transparency and security are desperately needed in the ad-tech ecosystem. Projects such as AdChain and Zilliqa will be launched publicly in 2018; and cutting-edge companies will begin to explore and implement these solutions into their ad-tech stacks. It’s difficult to imagine how blockchain technology will not permeate the digital advertising industry in a meaningful way in the near future, and we’re excited to pioneer blockchain solutions in our business processes!"
Chris Cable, Director of Data Analytics & Strategic Planning, Diageo
Don't oversell Blockchain
"Blockchain may do very little or it may be transformational. In an industry where the very numbers we transact on are open to interpretation from multiple partners, we need to create an agreed-upon truth at the contract or at the impression level. Blockchain allows multiple parties to agree that what is written in the blockchain is that truth and a lot of efficiency and transparency can then be achieved. Those records allow companies to fight fraud and reduce disputes over what numbers to use. So the potential is transformative, but it does require multiple parties to agree on how something will be counted. That’s easier said than done. Blockchain is being oversold at the moment in the sense of how early in the game it is. To my knowledge, the Wright brothers didn’t sell first class tickets on their second attempt at flight. Blockchain is like an atom or a single cell. We’re still working through its various properties and how to use it. Therefore, there are a lot of people talking about blockchain that have no business doing so. I actually believe the hype around bitcoin and its various permutations could do a lot of damage to how blockchain will be perceived in the short term. But like scientists who discovered a new element, we should explore the possibilities and start building. I get excited about smart contracts – contracts as code – where terms and conditions can be automated and guaranteed. I see applications outside our industry using blockchain and it truly having a macro-level impact on business. Advertising and marketing will come along for the ride on the big stuff and in the meantime we can work on some industry-specific issues."
Rob Beeler, Chairman, AdMonsters; Founder Beeler.Tech
Verifiable consumers & verifiable data sources
"We are in the midst of a decentralisation and user-centric movement that is enabled by technology innovations in blockchain, tokenisation, and identity of things and people. Some might call these 'digital bearer instruments', some would call them 'identities', and technologist would call them 'public keys'. The convergence of multiple industries and technology sectors and open-source development are driving rapid change broadly, including in advertising and media. To illustrate, Coinbase recently launched a product for merchant acceptance of cryptocurrency payments and a plug-in for Shopify e-commerce sites. Add to this browser vendors driving towards enablement of micro-payments natively or through a plug-in like Metamask and the landscape is rapidly changing to be able to support micro payments at the consumer level. In the advertising market, this enables guaranteed user identities or profiles that are verifiably not bots, verifiable sources of data, verified publishers, and advertiser identities. The impact of this is reduction of fraud, such as is the goal of MetaX and AdChain, as well as potential for consumer payments for actions, such as reading or watching content. These changes are rapidly paving the path to reach consumers verifiably; and I believe we will see major advances within the next two to three years."
Yorke Rhodes, Global Blockchain Business Strategist, Microsoft
Breaking down corporate silos
"MetaX started as a blockchain for advertising company. As we started engaging with clients, we realised that the market need was to break down corporate silos both internally and externally and create efficient supply chains that traverse internal business units and external constituents. The future is transparency and inclusion. Marketing will no longer be separate."
Alanna Gombert, CRO, MetaX
Blockchain implementation requires co-operation from the entire supply chain
"Blockchain technology and blockchain-inspired concepts can best be thought of as a shared accounting methodology. Right now, in advertising, everyone records their own numbers and then compares them when it comes time to bill. Distributed and corroborated ledgers will require that the parties in the supply chain all agree on the data before it is recorded to the ledger, so that when it comes time to do billing, there is no dispute over things like impression discrepancy. Creating a mutually agreed-upon source of truth for where money was spent, and who took what, gives this concept amazing potential to have a positive impact on the media supply chain. What we see missing right now is the understanding that one party by themselves can not implement blockchain technology on their media buying, it requires participation and co-operation from everyone in their supply chain. We've studied many blockchain-based companies, and almost all companies doing blockchain related projects for advertising. The most common factor that causes concern is that the companies don't always know who their ideal customers are and the potential customers don't always know how using blockchain or distributed ledgers will actually help them. Going back to basics is key; and everyone would benefit from creating education cycles in their organisations to make sure their teams have a sufficient understanding of what the word 'blockchain' means to them and the environment in which they operate."
Shailin Dhar, Director of Research, Method Media Intelligence