Blockchain's guide for the marketer

Blockchain, an immutable and unbreakable registry of transactions, was invented 10 years ago to become the basis for Bitcoin cryptocurrency. Since then, the scope of application of this technology has expanded from finance to medical services and, more recently, digital advertising.

This happens with the filing of such large companies as IBM and Comcast, as well as small startups like MadHive and Rebel AI.

Why did this topic arise?

While state-recognized legal payment facilities (so-called “fiat” money) are kept in bank safes, Bitcoin uses the blockchain transaction registry to guarantee security, ensuring full transparency of the use of cryptocurrency. The blockchain stores the transaction history for every millionth part of an ever “mined” coin, as well as all the information about the number of bitcoins owned by any person (if electronic signatures are matched and that person is approx. Transl.). This information is open and accessible to everyone.

By using blockchain technology for promotional transactions, data owners can safely share their assets without exporting or transferring them to other interested parties. And site owners can strike unauthorized vendors and cybersquatters.
')
“The most powerful feature of Blockchain is the possibility of its use in networks where there is mistrust between the parties concerned,” says IBM's Media & Entertainment Group CTO, Peter Gougillmino.

Despite the interest of the blockchain’s technical advertising community, potential applications — and their level of maturity — differ dramatically.

What can give the blockchain for the advertising industry?

Weed out remove unwanted intermediaries from the supply chain: Blockchain can help ensure the supply chain of advertising without intermediaries who manipulate inventory. Or guarantee the delivery of traffic without ad blockers.

Here is a typical example of the use of the blockchain: an unscrupulous seller can deceive an advertiser by creating a number of clones of the official address of the site (and giving them out as genuine - approx. Transl. ). For example, CNN-trending.com or NBCcom.com. The blockchain can be used to protect against such actions by creating a registry of “real” URLs belonging to a specific site. The list of such URLs will be certified by a unique digital signature that cannot be forged. The list of domains on which advertising will be placed will be taken directly from the blockchain, bypassing any intermediaries.

Facilitating data sharing: For most companies, data is one of their most valuable assets. Not surprisingly, sharing data — even with trusted partners — can be fraught with serious risks. Some manufacturers are already promoting the blockchain, as a means of tracking the facts of data exchange so that their owners know exactly what data the partner got access to and when.

This problem is more concerned with TV-buying, and is associated with the presence of multiple parties to transactions and the need to streamline the interaction between them. To this end, in June 2017, IBM together Integral Ad Science, Premion and adtech start-up MadHive, formed the AdLedger consortium . The task of this consortium is to build a blockchain platform for data exchange, focused on leading TV advertisers.

Comcast also unveiled a blockchain- based alliance of broadcasters , including Altice USA, Cox, NBCUniversal and Disney. The main idea is that these sites will exchange data and record information about these transactions in the blockchain. Thus, the advertiser can trust more data in the segments for targeted advertising.

The process is based on smart contracts that can manage blockchain operations. So, if Comcast and Cox have a different amount of inventory for specific content or audience, or if the advertiser wants to blacklist certain sources of traffic, this is all taken into account at the level of a smart contract for each company. Access to this data from outside is also determined there.

Inventory reselling: NYIAX (Nayex), a startup initiated by Nasdaq, develops the idea of ​​selling inventory as blockchain-based futures contracts. According to the founders, this mechanism will make purchases more comfortable for advertisers. If successful, NYIAX can give sites more flexibility in preparing commercial offers. Advertisers could book inventory for a longer period of time, and sites to encourage pre-purchased volumes of discounts. And in this case, the blockchain will serve as a register of held armor and their value.

Blockchain is still in its infancy

First of all, those who are intrigued by technology should understand that the blockchain is still in its infancy. Many of the tools mentioned above are in alpha or beta versions, or even as an idea.

Comcast's blockchain platform is not expected to be launched until 2018. For the AdLedger project, a working group is still being formed that will work on the concept and API specifications for its platform. NYIAX continues to work on the concept with partners.

“We talked with hundreds of sites, with all major media groups and agencies, and this is a slow, methodical process. There should be a phased approach, ”said Lou Severin, NYIAX CEO,“ It will take some time before we get to the stage of requests for specific projects from agency clients. ”

But blockchain technology is quite interesting and media groups are now thinking how to apply it. IAB is “actively looking for opportunities” blockchain and is in talks with startups, says Alanna Gombert, CEO of IAB Tech Lab.

IBM's Gougillimino notes that blockchain startups today use different approaches, “but the consensus is on the ecosystem, the existing solutions will be more integrated in the future.”

He added that “It is important to set the standards bar. Then they will be available for use by everyone if their companies are ready to undertake it and see the value of the blockchain. ”

The main obstacles ahead

Blockchain developers face hard obstacles when trying to create advertising solutions. The main thing from them: it is too slow to scale. Large ad platforms like AppNexus or DoubleClick Ad Exchange handle millions of ad impressions per second. Bitcoin, meanwhile, processes about five transactions per second.

"The distributed nature of the blockchain and the ability to make changes from any computer on the network around the world are both a benefit and a challenge," says Will Latrell, co-founder and former technical director of Integral Ad Science (developer of the blockchain platform Amino ).

The slowness of the blockchain makes it impossible to enter the RTB market, at least for now. This is partly why the pioneers of using this technology in advertising, such as Comcast or the AdLedger consortium, are more focused on data sharing and campaign planning.

Confirming the transaction in the blockchain takes 10-30 seconds, says Manny Poents, CEO of AdTech startup Rebel AI . "It will take time before the technology will be capable of speeds up to milliseconds used in online advertising."

NYIAX solves this problem by selling futures that guarantee shows at a certain price in the future.

“There is no speed there, and, frankly, there will never be,” said Severin. If blockchain transactions never fit into the RTB technology stack, the question of the possibility of using this technology remains open to those who occupy this market niche.

It will be possible to directly purchase inventory via the blockchain: an agency or brand partner will purchase directly from the site. This will be similar to traditional TV deals due to a large time delay, Gombert suggests. "But as technology improves, this limitation will go away."

Too much transparency?

Brands and media groups require transparency from Digital - but excessive transparency can be harmful.

“In addition to scale and speed, there is a problem of transparency, because it will complicate negotiations,” said Latrell.

Consider the example of Comcast blockchain initiatives. The participating players would like to save some data for some advertisers in the blockchain, but they are not eager for other media on this platform to see what data they place (and who exactly), as well as how much they cost. They also do not want their DSP, SSPs or partner information to be available to others.

More and more market participants can potentially use blockchain in everyday projects, according to Ken Brooke, CEO of blocktax-startup Metax. "But when you start adding sites, sellers and data that certainly affect the logic and process of advertising campaigns, the number of related technical difficulties only increases."

Pioneers in the blockchain for marketing

MadHive : One of the first advertising blockchains. MadHive was one of the first to introduce a partnership scheme for Over on Top projects (IPTV version). IBM is MadHive's first major partner in the AdLedger consortium. It is assumed that thanks to this merger, by the end of 2017, it will be possible to conduct a series of new type of transactions in which data are sold for other data, without purchasing the advertising inventory itself. “Research into new TV technologies is what a lot of money is being spent on now,” said company founder Adam Helfgott.

Rebel AI : AdchEch blockchain is a startup that develops the idea of ​​direct interaction between sites and agency buyers, or DSP. The use of the product will make it possible to refuse intermediaries, which according to the founder Manny Poents: “More similar to the time-tested relationships of buyers and sellers supplying an advertising product.” A startup positions itself as a safe channel for buying advertising, avoiding problems with fraud and the quality of traffic inherent in open programmatic platforms.

MetaX : MetaX is experimenting with a mix of blockchain and solutions outside of this technology for use in the advertising market. The company works with the non-commercial open source adChain platform, which is based on the Ethereum blockchain technology. Metax is trying to generate profits for the parent company by monetizing the applications created on adChain. For example, for data exchange or inventory attribution. The startup works closely with the Data & Marketing Association (DMA).

Comcast : It has an extensive portfolio of terrestrial and cable TV channels available throughout the United States. Comcast uses the blockchain for direct data exchange without interacting with an outdated network of intermediaries such as Acxiom and Experian. In addition, with this model, the media giant seeks to move away from start-up services in the field of targeted TV advertising, which add value, but take profit. Platform "Comcast, Blockchain Insights" will be released from beta no earlier than in a year and a half. However, even with such remote startup prospects, Comcast continuously trains partners and develops platform integration technologies.

NYIAX : Building on the patented Nasdaq blockchain technology, the NYIAX startup creates a product that allows traders to buy and sell future online postings. This will allow sites to pack guaranteed media resources even better than in the case of annual transactions with TV advertising. Although it is likely that when introducing this technology, NYIAX will still encounter resistance from sites that may not be ready to sell their product as separate units on the open market.

IBM : The IT giant is in a relatively strong position to create Bluemix, a set of cloud services that include blockchain engines, reminiscent of Gougillmino. While blockchain startups struggle to find margins where there are no client budgets yet, IBM can invest in R & D and use its advances in technologies related to other industries, such as health and finance.