Blockchain is so powerful, it can get lambs to lie down with lions.
Maybe not actual lambs and actual lions, but when the four largest ad holding companies on the planet—IPG, Publicis, Omnicom and WPP—get together behind a single initiative, and companies like IBM, Meredith and Tegna jump in with them, you know that something big is going on.
Adledger, the consortium the four ad giants are a part of, was formed to allow companies in the media space to find a way to use blockchain technology to create positive change, righting a number of industry problems, including the Four Horsemen of the Ad Apocalypse: fraud, lack of consumer privacy controls, an overstuffed supply chain that hurts publishers and a lack of transparency between publishers and advertisers. Their hope is that by adopting blockchain technology and the systems that run on it, the ad industry can help to restore advertiser confidence while boosting results.
It Starts With Education
“Education is a huge part of driving adoption,” Christiana Cacciapuoti, Executive Director of AdLedger, told me. “There’s been so much talk about blockchain and yet so few people seem to actually understand it. Much of what’s out there in terms of explanation is written at a very high level or it deals with cryptocurrency. It’s written for people with a strong tech background. And so in talking to our members, one almost universal piece of feedback we got is that it felt like there was no place for them to get a 101-style grounding in how blockchain for media actually works.”
Given all that, it is quite notable that the four major ad groups—who can barely agree on what day of the week it is—have all come on board.
“They realize that this is game-changing,” Cacciapuoti notes. “It’s a chance to right all the old wrongs. Advertising got a huge boost when it became the monetization backbone on which the internet was built. But as it grew, many, many unexpected problems and barriers cropped up and that’s what we’re trying to fix.”
One of the many reasons blockchain technology is so attractive to ad agencies is that it allows them to eliminate the scores of middlemen who have cropped up over the years—companies who measure and validate and take an increasingly larger piece of every ad dollar. Since those are all processes that happen instantly and automatically with blockchain, it limits the number of parties involved. That in turn assures that publishers (and their ad agencies) aren’t forfeiting revenue unnecessarily, while vastly reducing the amount of complexity on each transaction.
Blockchain-based systems for media can greatly improve measurement as well, as every view and every transaction is tracked, automatically. Brands only pay for viewers who have seen their ads, while networks and publishers don’t need to worry that many of their viewers are not being counted.
Say Goodbye To Fraud
The reduction of fraud, which has plagued the digital ad industry, is possibly the number one reason that all the big agency groups are attracted to blockchain. Fraud can be electronic—programs that spoof legitimate web sites or automatically create inauthentic hits, driving up costs—or they can be actual humans, clicking away on ads they’re not actually seeing.
With blockchain-based systems in place, there is no more possibility of fraud. Everything is recorded and tracked and it’s easy to tell if IP addresses track back to legitimate users.
The elimination of fraud is of massive importance to the digital media industry in general, as big brands are moving millions of dollars away from digital as they realize that much of what they’re spending is being wasted as a result of massive ad fraud.
OTT Is The Proving Ground
For television, OTT or digitally-delivered television, will likely be the proving ground for blockchain. Because the ad market there is still nascent and because everything is digitally delivered, it’s an ideal testing ground for blockchain technology and it’s where the industry seems to be focusing its efforts.
One of the first efforts in that regard is from two Adledger members, Beachfront Media and MadHive. With MadHive’s technology in place, Beachfront will be able to use blockchain-based data in real time to enhance clients’ audience-based ad campaigns as they run, enabling programmatic buying.
“From the advertiser perspective, they want to be able to transact in OTT the way they’re transacting on digital,” Beachfront CEO Frank Sinton said. “Eventually what they really want to do is be able to transact programmatically. They want to have the granularity of audience buying and what blockchain really adds on top of that is data security.”
Blockchain still has a long way to go before it gains mass adoption. But given that it’s already gotten all four major ad groups on board–a small miracle in and of itself– adoption is likely to happen sooner than later.
NB: You can download the Adledger paper here.