“People care about Web3 now.”: a discussion with Ben Putley, Alkimi Exchange
by Newson 27th Feb 2023 in
In association with Alkimi Exchange.
Web3’s practical applications are already being felt across various industries. From finance and healthcare to education and gaming, Web3 is providing new opportunities for individuals and businesses to communicate, interact and transact.
Advertising is no different, and Alkimi Exchange sits at the forefront of the industry’s Web3 revolution. With the recent release of their decentralised ad exchange, Alkimi are taking a leading role in defining what this new tech can do for the industry. Ben Putley, CEO, has seen the barriers to entry into the Web3 world being lowered in recent months: “There's a lot of attention on Web3 at the moment because brands are coming into it, I think it's what made our life at Alkimi much easier was these big brands coming into a Web3 space where we were operating and all of a sudden people cared a lot more. There has been less of that scepticism when we said, 'we're a blockchain-based ad exchange' in the last year versus the year prior to that."
“It removes the need for trust.”
Trust is, as always, a big issue in the advertising world. As Putley puts it “the DoJ don’t go after Google for nothing”. So where can blockchain really help when it comes to industry trust, transparency and efficiency?: “It removes the requirement for trust, which seems a funny thing to say, but the ad industry is built on trust and there has been a clear abuse of that somewhere. I think that by allowing people to verify better, you remove the need for trust and allow business to take place more easily.”
He continues: “With a decentralised exchange, it’s all verifiable, because all of the nodes that validate those transactions have agreed that this is what took place. The data around an ad exchange, which in and of itself doesn't look like much, but really what it's proving is that right now you have this one source of truth that everyone can access different levels of access depending on your involvement in a particular transaction. So you don't need to have someone physically going through it, you can spend more time on buying strategy, or optimising yield. If you're a publisher, it allows for more of the interesting parts of business to create more value,”
Aside from transparency and visibility, the speed of crypto transactions adds to business efficiency: “A lot of people think “I can send the pound from my Monzo account to my Revolut, and it's immediately there.” But what people don't often realise is that that transaction isn't settled for weeks, if not months later. This is actually what crypto allows you to do; even a bitcoin, which is a slow transaction, is 20 minutes. But that 20 minutes means that that transaction is completely finalised, it’s verified on chain and nothing can ever alter anything happening in that transaction.”
What are the key factors involved in Web3 really cementing its predicted position as ‘the next phase of the internet.’? Putley sees education as key, and states the importance of understanding before moving into a new platform: “I think that people are doing it because they think they should. I think Facebook changing their name to Meta prompted CMOs to panic and question “what is a metaverse? Why aren't we in it? How do we do it?”. He discusses Starbucks NFTs program, which has been a resounding success since launch, as an example of a well thought-out approach reaping rewards, while acknowledging that the crypto nightmare at the end of 2022 could be a cautionary tale to some. Which brings up the need for regulation in the industry to gain wider uptake: “The bad news that we've had hasn't helped. But I think that has really spurred on regulation, which is probably like the antithesis of crypto, but it's what it will take for it to become mainstream: regulations to protect consumers, to stop situations like FTX happening where people lost hundreds of millions of dollars.”
Simple and sustainable
Of the many potential benefits Web3 can bring to the advertising industry, Putley highlights its applications capabilities for streamlining. As environmental sustainability is becoming an increasing priority for digital advertising, the applications of Web3 could be invaluable to helping advertisers operate sustainably as well as efficiently. Presently, Putley notes, an ad exchange necessitates repeating “a lot of the same processes over and over again; you have to run an auction DSP and auction in your own exchange auction, your SSP auction in your ad server just so that everyone has a set of numbers they can then compare against to reconcile payments at the end of a period.” As Putley identifies, this current operating model means “a lot of the CO2 that kind of plagues the ad industry at the moment is the replication of processes that are already happening elsewhere over and over again.”
Using blockchain to create a “one source of truth”, Putley notes, would provide a simpler and more sustainable alternative to these processes; “if a ledger exists where everyone is writing information to one ledger, you don't have to have that as many processes replicated over and over again.”
Revisiting his comments for ExchangeWire’s 2023 Predictions series, Putley concludes that the industry is in a transitional period for Web3. He asserts that “we’ll probably end up getting the best, most applicable parts of Web3 first” noting that the medium’s nascency necessitates caution from all players across ad tech. These elements - “the ability to have sovereignty of data, transferring of value, and the lifetime value of people in a particular loyalty scheme,” to name a few - will serve to enrich Web2 in the short term, while simultaneously laying the groundwork for a complete transition to Web3 in the coming years.