After a prolonged period of hype, blockchain technology is finally being put to work in advertising. Recent examples from Asia give an indication of the benefits it can bring. But observers argue that blockchain might not always be the solution advertisers need, nor is it always fully understood by buyers—or sellers.
In this year’s first quarter, Unilever Japan applied blockchain technology to its advertising for the first time. “Unilever’s initial exploration in this space is to identify if blockchain has the potential to provide us one auditable source of truth of our campaign delivery that all parties and intermediaries can agree to in this transparent system,” the company said in a statement announcing the initiative.
The FMCG giant worked with ADK and Envision X, a UK adtech company, to implement the campaign. Envision describes it as an automated, “full end-to-end operation” linking brand, agency, demand- and supply-side platforms, technology vendor and publisher. Key to the exercise was Envision’s Exchain platform, which the company says is designed to close the gap between advertisers and publishers that results in a “hidden ‘adtech tax’”.
"Advertisers need a platform to allow them to fulfil a larger purpose. Blockchain is one of the components. But a blockchain-based trading platform is just a gimmick. They’re being sold things they don’t need because the question being asked is the wrong one."
—Hugo Pinto, Accenture Digital
Envision says its platform made it possible to see “every single dollar” spent, and revenue, in real-time, which meant “only the authorised fees were charged”. A spokesperson for Envision said the trial highlighted that under less transparent circumstances, a “significant portion of media spend” is misappropriated. “We have learnt that more visibility into the cost element is needed so we can optimise our spend more effectively,” the spokesperson said.
Reduction of manual effort was another advantage listed. Taku Nakano, a media planner at ADK, said that centralising commercial deals removed the need for physicial execution and verification, leading to greater productivity. In Japan, a market known for its opacity and labour-intensive processes, such technology would seem to have big implications.
Outside Japan, things are at a similarly experimental stage. In March, Havas Media worked with AdsDax, another UK tech-services provider, to apply blockchain technology to a campaign for Swiggy, an Indian food delivery service, during the cricket season. According to AdsDax, over 2.3 million mobile engagements were tracked on a public blockchain, which gave the advertiser enhanced visibility of progress against its goals.
All engagement data was subject to third-party verification before being stored on a ledger. The focus was on campaign optimisation rather than removing a dubious “tax”, but the outcome appears similar. AdsDax says making transparent data available instantaneously reduces waste by helping media buyers make better-informed spending decisions.
CIMB, a Malaysian bank, also recently tested a campaign with AdsDax, with similar goals to make its ad buying more efficient. A further venture for PepsiCo, led by Mindshare and involving Integral Ad Science, MediaMath, Zilliqa Research and Rubicon Project, led to a 28% rise in efficiency in terms of the cost of viewable impressions, according to Mindshare. Verification inherent to the process means advertisers only pay for viewable, brand-safe impressions, Mindshare said.
PepsiCo called the results encouraging and said it plans to run “a few more campaigns to verify more hypotheses and measure overall impact”.
While these examples suggest blockchain is starting to improve the world of advertising, marketers would be wise to continue to treat the vaunted technology with some scepticism.
Adam Hopkinson, the founder of London-based blockchain advisory firm LDTRT, describes himself as a blockchain evangelist who spends most of his time telling people they don’t need to use it.
Before setting up as a consultant, Hopkinson co-founded and left the blockchain-oriented Truth Media Agency. He sees blockchain as having the power to “transform the speed, cost and efficiency of the industry”, but says the technology has suffered due to the proliferation of “snake oil sellers”.
“There are very few people in adland qualified to discuss blockchain,” he says, noting that although universities such as Oxford, LSE and Cornell offer “excellent courses” in the subject, few people in the industry have taken them. “At least get a certificate before you claim to be an expert.”
Qualifications aside, Hopkinson argues that most businesses would benefit from a distributed ledger technology (DLT) solution rather than a full-blown blockchain strategy, which can provide transparency with less complexity and cost. One important drawback he sees is that “the speed of digital advertising and blockchain don’t currently operate at the same cadence”.
But given the buzz it’s generated, blockchain is an easier (and more lucrative) sell for agencies and adtech vendors. “What we’re wrapped up in is cryptography, and I don’t think you need that,” he says. “Do I need to encrypt every transaction, or do I just need to show they’re happening? There are very few examples where it’s essential.”
There are even lower-tech ways to raise transparency. Advertisers and publishers could trade directly using “good old-fashioned IOs and a decent media planner”. Or a client could simply pay intermediaries directly all at once, he suggests.
“The real issue comes from trying to sell you ‘my’ blockchain. If it’s not decentralised—without a single point of authority running the network—it misses the point and doesn’t deliver on its fundamental proposition, which is trust.”
—Adam Hopkinson, LDTRT
At the same time, blockchain has compelling potential for marketers well beyond making ad-buying more transparent. “Connecting accurate data sources and building an ecosystem is where it becomes really interesting,” he says. One example is Dreams, a bed retailer measuring sleep patterns, which yields behavioural data that can inform health and wellbeing. Or, hypothetically, travel data from cars could be harnessed to help governments plan road repairs. “Measuring the supply chain for media is not using it to its full potential.”
In an ideal world, Hopkinson sees a regulatory body bringing blockchain to market. As it is, sellers are focused on pushing their individual blockchain systems. “The real issue comes from trying to sell you ‘my’ blockchain,” he says. “If it’s not decentralised—without a single point of authority running the network—it misses the point and doesn’t deliver on its fundamental proposition, which is trust.”
Hugo Pinto, a startup mentor and former Accenture Digital managing director in London, agrees that people should look at blockchain as something to help “connect the dots” and put digital advertising in closer touch with the “real world”.
In an operational context, he does see blockchain putting pressure on all players involved in running an advertising campaign to be more efficient. He thinks the resulting quest for greater differentiation will lead the industry to re-evaluate its purpose. “Is it more and more targeted advertising or is it hyper-personal relationship management?” For him, there is little doubt that it’s the latter.
The technology can help open up IoT and algorithmic advertising opportunities in industries that have not traditionally used advertising to grow their business, he thinks. “These will also evolve with the emerging trends around the gig economy and purpose-first businesses,” he says. “When the margins of the industry are compressed, the transition to something like a universal personalisation engine that can obtain consent and data at scale and globally will become the biggest opportunity for brands.”
But ultimately, blockchain represents just part of the solution for advertisers, not the solution it is sometimes presented as. “Advertisers need a platform to allow them to fulfil a larger purpose,” he says. “Blockchain is one of the components. But a blockchain-based trading platform is just a gimmick. They’re being sold things they don’t need because the question being asked is the wrong one. It’s not a case of, which blockchain should I use; they need to ask, what am I going to do differently from what I do today, and is it worth using a technology like blockchain?”