As the old saying goes: making predictions is always difficult, especially about the future. However, here is a given: there will be a lot more discussion about blockchain over the coming year.
So many people have different views on how blockchain will affect the marketing and advertising industry that the potential applications of this nascent technology seem almost limitless. So instead of gazing too hard and long into our crystal balls, perhaps now is a good time to take stock and focus on some of the more realistic developments and what they mean for the industry.
Following an in-depth review with leading industry stakeholders1, about how media currencies might look in five years, we discussed how blockchain might work and how it would change the way we do business.
Previously published in MediaTel, we looked at the case for “The rise of the Super JICs” and a companion piece, “Chaos replaces order” in which tech drives a more anarchic, decentralized future scenario. Here we take a deeper look at how blockchain technology might be applied to the ad industry and how that might affect the future of media currencies.
In essence, blockchain is a new way to store information. It is a digital record of all transactions related to a product or service. These transactions are recorded and shared among a secure, decentralized network of stakeholders.
Certain attributes make blockchain technology particularly attractive to the advertising industry. It is immutable – “blocks” of transactions are continuously time-stamped and verified by the network; and once added no single party can alter it. It is shared – every party in the network can see everything, creating a transparent, “single version of the truth”. It is secure – it is encrypted so that only those agreed parties in the network can access it.
At this early stage of adoption, many have been quick to jump on the blockchain bandwagon, resulting in some quite far-fetched applications which the industry may never embrace. However, some interesting opportunities were discussed at our roundtable, which could be exploited sooner rather than later.
Two broad applications immediately spring to mind:
Given the current issues around the "murky” supply chain in digital, it would seem that blockchain protocols are ideally placed to help provide greater transparency and accountability.
The clearer governance that blockchain provides would no doubt go a long way to stamp out fraudulent activity such as kick-backs and arbitrage, since any re-selling of inventory would need to be agreed by the whole network. So the increased transparency would help negotiation of deals, and also help to regulate agreed contracts. Everyone in the chain would know what they have agreed to and what is delivered.
One question, however, is how disputes might be settled if there are disagreements. Digital ads are executed in fractions of a second, but blockchain is much slower - so it is difficult to see real-time verification any time soon. However, it could still be a very useful post-campaign validation tool, but timestamping needs to be accurate to the millisecond, in order to marry financial transaction with ad delivery.
This area also presents many additional interesting applications, if blockchain is opened up further to include consumers.
In the future, consumers could be given more control over the type of campaigns and content they want to be exposed to. Consumers could choose which blockchain networks they want to be a part of and hence what content and ads they receive.
This would place more power in the hands of the advertisers who can create deeper relationships with their customers. An added benefit to this could be a significant reduction of ad blocking – because instead of blocking ads from certain platforms, the consumer can choose which advertising they want to receive. Ultimately, brands could only interact with consumers as part of agreed networks in the blockchain.
Other areas of development in this area could be to verify activity and blacklist against fraudulent sites and non-human traffic. Blockchain would guarantee the validity of clicks between consumers and advertisers on verified sites.
However, there are two key issues here. Firstly, one of trust: will consumers believe their data is secure and that brands will only execute on what has been agreed? Secondly, for everything to join up, there needs to be widespread adoption — multiple suppliers along the chain need to sign on the blockchain to make this work.
We clearly have a long way to go before we get to this point - probably at least five years - but the incentives are there. If we can create a transparent supply chain, reduce ad fraud, reduce ad blocking and provide the protocols for greater accountability, then blockchain becomes a very attractive proposition.
However, it’s worth bearing in mind that blockchain is unlikely to replace the media measurement systems we currently have in place. Blockchain won’t create ratings, segments, impressions and reach. Rather, it will verify whether targets have been met and confirm payment. So while blockchain promises much change, the building blocks of media measurement will remain subject to their own evolution, as outlined in our previous two opinion pieces.
1How it all started: voices from across the industry. GfK and IAB Europe invited industry representatives to a round table discussion on how media measurement might look in five years’ time. Participants included: digital platforms Google, Facebook and Oath; global ad agencies Publicis and Dentsu; media owners from broadcast TV and digital; a programmatic audience platform; a national advertising association and the German JIC (Joint Industry Committee) for TV audience research, AGF. It is the first time we have been able to discuss these issues with such a broad group and, from the ensuing debate, three possible scenarios for the future became apparent:
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