While inflated expectations abound, the advertising industry is emerging as one of the more immediate, substantive and compelling use cases for blockchain technology.
There is a lot of excitement — and a lot of hype — around blockchain, the emerging technology that helped launch Bitcoin and that is now being touted as a potential solution to a myriad of business challenges across a wide spectrum of industries. While inflated expectations abound, the advertising industry is emerging as one of the more immediate, substantive and compelling use cases for blockchain technology. Use cases for the advertising industry may not seem as disruptive or obvious to those who are unfamiliar with the digital media market, but to advertising industry professionals, blockchain has even more transformative potential than it does in industries such as remittances, capital markets, food supply chain and government services. Unlike other industries, the real impact of blockchain on the advertising industry is likely to occur “behind the scenes” in ways that may very well go undetected by most consumers. In many respects, this can be taken as a sign that the use cases are more practical and real.
For those still struggling to understand what blockchain is, all you really need to know is that blockchain is a new type of database that brings together four key characteristics in a way that no other database has done before:
- Public-Private Key Cryptography enables enhanced data privacy/security.
- Distributed Networks increase network security and trust among parties.
- Data Immutability (via hashing) prevents tampering with records.
- Disintermediation allows us to “cut out the middleman” in data transfer.
By combining these four characteristics, blockchain enables new efficiencies in situations where multiple independent entities rely on, update and use the same dataset. These efficiencies may be realized in applications for currency, payments and capital markets — but all of these are highly regulated areas, where creating scalable new solutions will require overcoming many legal hurdles. In contrast, the advertising industry is far less regulated, making it a prime target for blockchain innovation.
Digital Ad Data Management
There are three main use cases for blockchain in the advertising industry. The first is driving efficiencies in digital ad data management. While digital and mobile media have created immense opportunities for advertisers, this has come at the price of significantly increased complexity in tracking relevant data as a digital advertisement moves from an advertiser to a digital service provider (DSP) to an ad exchange/network; and then to a software service provider, a publisher, and finally to an online viewer. The current digital ad supply chain involves multiple independent entities with diverging incentives and varied legal relationships, and provides different levels of transparency into a fragmented and siloed set of information. Binary relationships govern most of the information exchange and product flow, with most parties having insight into only the steps immediately before and after their role in the chain. Transitioning to a blockchain-based system enables all parties involved to view the entire digital supply chain — all in real-time, and with a remarkably enhanced degree of trustworthiness and data integrity.
This greater transparency provides enormous benefits to all stakeholders. In the context of ad campaigns, blockchain provides a single source of truth for the number of impressions delivered, eliminating disputes between marketing platforms, publishers and advertisers. These disputes currently create millions of dollars of costs for all stakeholders involved. In the words of an executive from ABInBev: “In short, [blockchain is] helping solve the core issue of everyone agreeing what to pay each other ….”
ABInBev is one of several brand name firms that have launched blockchain pilots that seek to drive efficiencies in the digital ad supply chain. The world’s largest producer and distributor of beer is partnering with a startup, Kiip, to write ad impression data to the Ethereum blockchain in hourly batches. The data will be made available in real-time to anyone holding the encryption key, including DSPs, ad agencies, and the ultimate client. The goal of the pilot is to decrease the amount of time media buyers spend sifting through impression-level data and increase transparency in ad programs to improve effectiveness.
A similar pilot involves a “micro-consortium” among IBM, the digital advertising firm Mediaocean, and major consumer products firms Kimberly-Clark, Kellogg’s, and Unilever. The pilot leverages a custom version of IBM’s enterprise grade blockchain, Hyperledger Fabric, to record impression level data as well as related transactional data such as purchase orders and payments. Ultimately, the pilot seeks to improve transparency into how media dollars are being spent, and how those dollars benefit various stakeholders involved in ad campaigns.
An even more ambitious project is being piloted by AdLedger, a new consortium that includes several industry players, including Salon Media, IPG Mediabrands, iSpot.tv, Tegna, Publicis Media, Mad Network, group m, and the International Advertising Bureau (IAB). The AdLedger consortium is teaming with IBM and leveraging the Hyperledger blockchain. In addition to tracking impression and other ad related data on Hyperledger, AdLedger will seek to run analytics on the blockchain dataset to measure key performance indicators (KPIs) that can be used to gain insights into ad campaign effectiveness. A final pilot of note is Comcast’s recently announced Blockgraph, which leverages blockchain and advanced encryption techniques to enable a peer-to-peer platform for matching, managing and tracking TV ad data. Blockgraph recently completed a pilot and intends to go live in early 2019.
A critical subtext to each of the pilots mentioned above is the potential for blockchain to be used as a tool to combat fraud. Digital ad fraud is an enormous problem for the advertising industry, estimated to result in over $10 billion in annual losses. As solutions evolve for leveraging blockchain to enhance ad campaign transparency, opportunities may emerge to combat the bot-based click/impression fraud that has plagued the industry with increasing alarm over the past few years.
Source/More: Blockchain for the Advertising Industry | Law.com
