Does blockchain have a place in media advertising?
The latest industry that can apparently benefit from blockchain is the often complex and fast-paced media advertising sector.
Earlier in the year, The Interactive Advertising Bureau (IAB), which has 650 members from media and technology, released a white paper on the potential of blockchain in advertising.
According to the IAB’s report, “Blockchain for Video Advertising: A Market Snapshot of Publisher & Buyer Use Cases,”, blockchain, which is a continuously growing list of records, linked and secured using cryptography, has a number of benefits for the sector due to its inherent ability to create trust, transparency and security between different actors.
The industry body says it expects “2018 will be the year that a wide range of blockchain applications will be rolled out across digital and cross-screen video advertising including linear television, with 2019 likely being the year that these technologies begin to see broader adoption – provided certain risks can be mitigated.”
It came to this conclusion after conducting interviews with member companies that are actively exploring and experimenting with blockchain.
For example, MetaX, a blockchain company based in Los Angeles that is on Ethereum, is looking to address issues of fraud and a lack of transparency that sometimes impacts digital advertising.
The company has created an application called Ads.txt Plus that aims to use blockchain to strengthen the IAB’s Ads.txt program, which was created to eliminate profit from counterfeit inventory in the open digital advertising ecosystem.
This works by publishers keeping file versions of the program on the blockchain making them publicly readable so that no one can obfuscate the names of authorized sellers.
Ken Brook, Chief Executive Officer, MetaX explains:
“For example, today if you go to pubA.com/ads.txt, you can see all of the names of authorized sellers. In the future, if you augment that with your digital wallet and then go to pubA.com/ads.txtplus, you will see just the wallet address. The publisher can obfuscate all the authorized sellers so that it’s not readable but it’s still verifiable.”
Whereas the blockchain file will be readable by the public but immutable and all information validated by third parties.
Another example is XCHNG by Kochava. Through its development subsidiary, Kochava Labs SEZC, the company is building a new blockchain framework that IAB says is ‘uniquely suited to high-speed transactions’ such as those that occur in digital advertising.
The main value of this technology is, according to the report, “the insertion order, which governs all media transactions, can become a smart, self- enacting contract.”
Charles Manning, Chief Executive Officer, Kochava, explains further: “It’s the blockchain implementation of IAB terms and our standard smart contract template that would become the standard that we collaborate on from a taxonomy standpoint. That is really meaningful and powerful…”
IAB expects to see ‘some significant beta tests from both traditional media and new entrants.’ However, for now, the idea that blockchain could increase security, transparency, and efficiency in the media advertising sector remains an open question.
For example, there are known problems with blockchain, such as it is difficult to scale up at present. Furthermore, as Jaisimha Muthegere, chief technology officer at Visto, points out in this blog, it can take time for the transactional element of blockchain to occur.
In regards to blockchain being used for digital transactions for media advertising in real time, he says: “Unfortunately, the truth is blockchain is simply too slow to work for the real-time aspects of our programmatic trading world.”
It will be interesting to see how blockchain unfolds in this sector, but it is likely that if first generation blockchain was perfect for the more simplistic needs of the financial sector, second-generation blockchain will be better suited to the more complicated requirements of the media advertising industry. Therefore, be patient but be sure to watch this space.