The virtues of blockchain technology have the capacity to revolutionise a range of industries, from e-commerce to banking to shipping, explains the7stars' Dom Blacklock, but especially digital advertising.
The benefits that a fully transparent fixed ledger could bring to digital advertising, be it improving data management, targeting ads, or buying and selling media, are bountiful.
Potentially, blockchain could remedy the trust, transparency and inefficiency issues which have plagued the industry - and in this discussion also help push the agenda of building a trusted digital ad ecosystem, even if blockchain isn’t the answer.
Benefits of blockchain to digital advertising
Industry body Jicwebs (Joint Industry Committee for Web Standards) is one of a number of organisations which is trying to tap into the potential of blockchain, by running an initiative aimed at understanding its capabilities and limitations to the digital advertising ecosystem.
Jiceweb’s pilot initiative, which is running until the end of the year, has signed up brands McDonalds, Nestle and Virgin Media and a number of media agencies to the initiative.
If successful, the pilot could be rolled out as early as 2020.
Introducing an immutable, transparent record of all transactions between stakeholders in an advertising network should in theory improve campaign performance, prevent ad fraud, and help forge closer relations between advertisers and publishers by cutting down on middlemen.
But introducing blockchain-enabled technology would be a seismic challenge, and would need to be undertaken en masse to realise its benefits, which would be a big and costly logistical challenge.
And given inroads to improve transparency and accountability - as we're attempting at the7stars - to existing practices are already being made, it’s questionable whether significant resources and time should be ploughed into dismantling the digital advertising ecosystem and gambling on new-fangled technology.
Whilst backing innovation should always be encouraged, the enormity of introducing blockchain-enabled tech should not be underestimated.
A central challenge is whether the technology will be able to effectively cope with the sheer volume of digital advertising transactions: digital media is based on trillions of advertising placements being bought, each within a hundredth of a second from a buyer having an opportunity to buy.
It’s likely to be a lot easier for a shipping client to buy via blockchain through a small number of shipping solutions, compared to the complexity of an advertiser almost always having to buy across different, self-regulated types of media and technology companies.
A further challenge is the likely difficulty of getting all parts of the digital ecosystem to buy into blockchain-enabled technology, particularly if it’s not in their best interests to ditch the current status quo.
Currently, there are a number of billing systems between the advertiser and media inventory, each with different finance processes and own teams, so it will be challenging for everyone to align and move forwards with a new buying mechanic, especially across fast moving campaign life-cycles.
The likelihood is that the larger, well-financed players, would find it easier to adapt, leaving smaller and those less well-resourced out in the cold, potentially causing division, acrimony and undermining the proposition.
It’s particularly important to be wary of this within the digital publisher space, where in this day and age, we should avoid at all costs any disadvantages for new journalists or publications to have a fair chance of sharing their opinions through media.
Could consumers join the blockchain advertising economy?
One enticing prospect would be whether consumers could join the blockchain advertising economy.
Potentially, a consumer who is exposed to ads could earn money, reward points, or bitcoins, for being the receiver of ads (paid for either from the publisher, agency or advertiser).
The big upside to this is it would allow for consumers to be part of the advertising economy and build bridges with those consumers who have become irritated and tired of ads - particularly as TV moves ever closer to the programmatic world.
Whether consumers would sign up to this, given privacy and data-sharing concerns, and whether such tech could practically be rolled out are other questions.
Improve current ways of working instead
Let’s not underestimate blockchain’s potential, but because it hitherto remains unproven it remains a bet, a costly and challenging bet too.
An alternative option to solving trust and transparency issues could be to persevere and ratchet up existing efforts to improve existing technology and trading practices.
Within the programmatic supply chain, it’s completely feasible, on a vast volume of digital supply, to buy in a fully transparent and tracked way - as long as there are appropriate processes of setting up tech and supply access along with a transparent way of working as a buyer.
Inroads are being made in this area: publisher-exchange agreements on sharing the percentage commission of CPM to all parties; as well as a conscious industry move to more transparent buys are underway.
I hope the Jicwebs imitative is a success and unearth uses of blockchain to digital advertisers. Such uses could be further tested to see if they would get universal buy-in and be achieved at scale.
Concurrently, I think the industry should strain every sinew to ensure current practices are improved so we can get eradicate trust, transparency and inefficiency issues.