Blockchain technology in itself is still in its infancy stage, despite the proliferation of blockchain startups. Startups range from developing decentralised apps to servicing vertical blockchain networks to setting up and managing blockchain data exchanges.
The technology's use in advertising is new and not widely adopted, and at this time, no company has launched a global solution for general availability. The solutions in the market are facing scaling challenges, as the technology requires all parties in the supply chain to participate.
The challenges of blockchain technology
Companies are hesitant because solutions are not fully fleshed out and too theoretical. There's also a lack of participation due to the expensive costs associated with implementation and maintenance.
For example, the data associated with blockchain must be stored indefinitely and will continue to grow exponentially. This cost is billed back to every member of the supply chain. Until there are industry case studies available able to show true added value, it is likely blockchain solutions will lack scale.
In addition to the costs to implement and maintain a blockchain, the data that is made available through this solution shares all information. The market is making strides in its efforts to achieve fraud free and brand safe inventory, but there is still a significant amount of spend going to long-tail and questionable publishers.
By implementing blockchain technology, there must be a plan in place by the advertisers, agencies, vendors, and publishers to execute on the influx of data that the solution will unveil. It is likely that the data the solution provides extends far beyond what is currently available in the marketplace and teams are not prepared to interpret and ingest. This could be another reason why there are still no industry-wide case studies available today.
In addition to the above considerations, there are questions to consider when deciding if blockchain technology is the right solution for an advertiser:
1. With high implementation and maintenance costs, is blockchain technology a true solution that can be adopted and scaled in the advertising industry?
2. How does blockchain technology impact a client’s strategy and overall business?
3. Do we need to hire teams of analysts to support and interpret the mass amounts of data?
4. How do we proactively approach blockchain technology strategy before committing to adoption and associated costs? Do we allow other companies to take the lead until there is industry adoption?
Clients’ and agencies’ finance departments need to be talking to each other in an agreed digital manner via API. This means that finance process and processing capability has to be boosted and moved into the cloud. At present, most finance systems are internal.
Blockchain technology has worked wonders in the logistics, shipping and legal industries.
These industries benefit the most from the technology within a community/ecosystem that can be easily managed through streamlining processes, operations, reducing costs, championing transparency and buffing up data security in supply chain management, IoT and finance.
In the logistics industry it works well, as the movement from point A to point B takes time, and there are processes to verify that 10,000 crates of goods have arrived via shipping or air where documentation has cleared, taxes have been paid and payment has been released.
In the legal industry, it works in the execution of wills, and applying the verification process to do away with fake wills.
In the shipping industry, blockchain replaces letters of credit.
According to Zenith’s Global Intelligence 2018 report, we believe the blockchain revolution in 2018 will go mainstream, due in part to a glut in venture capital and the salivation of investors thrilled by Bitcoin’s wild ride. People will look to brands to harness this technology and give them greater control, total transparency, and fair prices. This also pushes the power back to the consumers in terms of what data they give up and who can have their data.
New blockchain sectors will likely include cloud storage, security, property, brokerage, medicine, fashion, media, entertainment, and even law. Encryption keys will provide a secure method to track the progress of an order, view the history of a case number, verify the provenance of an item of a clothing or food item, or unencrypt digital media at a certain rate of quality.
We also expect to see applications appear within media and advertising, such as Basic Attention Token, which aims to improve user experience and help ensure publishers and advertisers are not losing out to middlemen, trackers and fraud. While blockchain technology shows tremendous potential to transform a number of areas of our industry, scale will remain an issue until adoption improves and speeds increase.
Benjamin Yeow (left), head of TAAG, Publicis Media Asia Pacific
Marc Langenfeld (right), Publicis Media Asia Pacific