“Don’t, don’t, don’t, don’t, don’t believe the hype,” Flava Flav admonished over the bombastic beats of Public Enemy’s seminal song, “Don’t Believe the Hype,” critiquing negative press about the group.
The chorus’ chant is something that pops in my head every now and again (notwithstanding Flava Flav recently being fired from the group) when I revisit one of the very first articles I wrote as Senior Editor of AdMonsters back in 2018—”From Hype to Reality: How Blockchain Is Already Bringing Transparency to Advertising.” I’ve been a day one stan of blockchain’s promise for advertising, but not without blowback from some of the technology’s staunchest critics.
As I reported back then, there were many blockchain for advertising projects in play, working to test and prove what blockchain could do to make the advertising ecosystem work better. Many of those projects have yet to realize any sort of disruptive impact on ad tech at the levels they were being championed back in 2018.
Gartner’s 2019 Hype Cycle for Blockchain Business shows that blockchain for advertising won’t realize its greatest impact for another five-10 years.
Is it possible that I fell for the old okey-doke back in 2018?
To get a grip on where blockchain for advertising is headed in 2020, I reached out to the people actually working on real, live projects that are making a difference. You’re probably thinking, “But it’s their job to keep gassing up the hype.” Let me I assure you, they kept it totally 💯.
From the conversations I had about what’s happening with blockchain for advertising in 2020, it became quite clear that the idea that blockchain is a panacea for all of advertising’s woes has definitely become the stuff of legend. Those theoretical ideas are more naturally being replaced with tried and true solutions that solve for efficiency, transparency and tackling fraud. Applications that solve for identity are becoming more real every day.
You’ll hear views from Richard Brush, president of NYIAX; Nikao Yang, COO of Lucidity; Marc Guildimann, Founder & CEO, Parsec; Christiana Cacciapuoti VP Partnerships, MadHive & Executive Director, AdLedger; Will Luttrell, Founder & CEO at Amino Payments; Vanina Ivanova, CMO, AdEx Network and Luke Mulks, Director, Business Development, Brave Software.
Richard Bush, president, NYIAX
NYIAX provides advertisers and publishers a platform to buy, sell, and re-trade premium advertising contracts in a forward/futures methodology.
In 2018 there was indeed a lot of promise for blockchain and its ability to clean up digital, transforming businesses. And the reality is that there’s still much promise. Once the initial excitement of blockchain subsided, the industry continued to focus on developing against solid business use cases and began to see traction.
What the sector discovered is that there is no such thing as a “blockchain solution.” There are solutions to business problems—transparency, supply chain, data integrity, etc.—that benefit from use off DLT (Distributed Ledger Technology), Cryptography and other associated blockchain technologies. But the idea that “Blockchain will save advertising” has been replaced by tactical excitation against supply chain transparency, Identity and automation use cases.
Nikao Yang, COO Lucidity
Lucidity is a digital advertising blockchain protocol bringing transparency and trust to digital advertising. They are the only ad verification company using blockchain technology for digital advertisers and publishers to mitigate fraud, transact with trust, and maximize ROI.
Blockchain was first hyped as a kind of “cure-all” solution for digital advertising’s problems. But that was never realistic. The things blockchain are quite good at, however—namely codifying rules and auditing transactions between multiple parties—has certainly found a place in digital advertising.
The IAB just last quarter released its own guide for assessing blockchain applications in adtech, in which it specifically references how “shared ledger technology” can be used to minimize waste and improve programmatic operational efficiencies. That’s where we can expect to see the greatest amount of progress in 2020.
Blockchain tech isn’t going to replace the verification, brand safety, and anti-fraud solutions we already have. Those work great. Rather, blockchain’s strength is tying those different signals together to ensure the ultimate consistency and reliability of data between them. The challenge then, for 2020, is cooperation. In order to work best, blockchain systems must communicate with other programmatic technologies. Will those technologies play along?
Marc Guldimann, Founder & CEO, Parsec
Advertising Futures and Options Exchange—AFOX—is Parsec’s distributed system for the issuance, trading, and settlement of upfront media contracts.
After executing several controlled tests with Parsec acting as a media seller, we’ve spun out AFOX into a separate company to focus on creating a marketplace for futures contracts.
I’m glad the whole “write log files to a permissioned ledger” to stop fraud nonsense has fizzled. The only authentic applications of blockchain in most markets involve creating digital assets—and even those don’t necessarily need the true decentralization offered by POW-based consensus algorithms. Our own project, AFOX, is built on r3 Corda, a permissioned ledger.
Identity is one area where cryptography, if not full blockchain, could see some interesting developments. For example, the stuff Comcast is working on seems to be more cryptographic proofs than digital assets.
Longer-term, there’s a potential use for blockchain where consumers sign requests for media (and the accompanying advertising), and potentially pay for it with currency or data, in such a way that it will act as “proof of attention/consumption” without threatening their privacy.
Christiana Cacciapuoti VP Partnerships, MadHive & Executive Director, AdLedger
MadHive is an end-to-end advanced advertising solution for digital video that leverages cryptography, blockchain, and AI.
A lot of the solutions that were in the market in 2017-2018 were trying to slap a blockchain on openRTB and really not use the technology as intended. Those solutions won’t be effective, because if we all wanted to write openRTB data to the same location, we could do it with a traditional database—no blockchain required.
The use cases that live up to the hype are going to be more creative and will involve marrying blockchain with cryptography. The common critique of blockchains not being able to support the massive QPS of the ad tech ecosystem are true (for now), but with the correct architecture, they don’t have to be. Putting every query on a blockchain is not the most effective way to architect a system involving blockchain. That would be like taking a traffic ticket to the Supreme Court.
I think blockchain gets all the attention, but cryptography is arguably more important. Blockchain is arguably just a subset of the field of cryptography, which is the study and practice of disguising information in such a way that only your intended receiver can decode it. I think this is the most immediate use case; leveraging cryptography so that companies that are participating in an advertising transaction know for sure—just like you know for sure that you’re shopping on Amazon and not an imposter—who they’re transacting with within the advertising ecosystem.
A great downstream benefit of this methodology is that a lot of fraud could be solved with a system like this, for example, domain spoofing. Domain spoofing is when one entity pretends to be another entity, usually a more recognizable one—like if Breitbart pretended they were The New York Times— in order to get the higher revenue associated with the other entity. If we had an immutable, cryptographically sealed identity for supply chain participants, that kind of fraud would be rooted out. We can lift and shift this validation methodology into other claims made within an ad request, for example, the device type, geo, screen size, etc. All of these are common fraud types that stem from misrepresentation.
Will Luttrell, Founder & CEO, Amino Payments
Amino is a payments company that combines technologies from blockchain, payments, and advertising to bring transparency to online advertising.
We’ve started to see progress in the market and expect others to follow the lead of industry trailblazers like Nestlé in 2020, especially as foundational and daily tools like MediaOcean integrate with blockchain-based solutions like Amino.
The core thesis of Amino Payments—that a transparent, cryptographically signed supply chain is the only valid solution to digital advertising’s most intractable challenges—is being proven and re-proven on a weekly basis. Educating buyers takes time, but as more ad fraud headlines and outrageous hidden fees come to light, the urgency for transparency continues to increase.
Vanina Ivanova, CMO, AdEx Network
Three years ago, decentralized and blockchain were buzzwords. People thought they would solve the world of advertising management and the supply chain. We don’t’ think it’s a silver bullet to make the world a suddenly utopian place. It has its benefits, but there are disadvantages as well. Companies like ours are not a competition to Google and Facebook, but an alternative. We will never be able to compete with them because the amount of data they have about their end-user is humongous. What we want to do is create a better internet environment.
Recently out of beta, we managed around 300 campaigns from about 100 advertisers to optimize the advertising process by enabling a direct connection between buyers and sellers without the need for third-party intermediaries or ad agencies. Our decentralized platform, which runs on the Ethereum blockchain, also operates to reduce the amount of fraud by providing transparency with real-time tracking and reporting capabilities. We are solving real-time visibility with more accountability and optimization of the ad supply chain. Every ad impression equates to payment. Publishers get paid per impression as it is written on the blockchain providing another layer of transparency.
Somewhat like what’s being described in Google’s Privacy Sandbox, the platform uses tracking cookies, with the cookie being stored locally with the user and never leaving the browser. Users won’t be vulnerable to data leaks or their data being snatched. AdEx matches users with contextually relevant ads according to their preferences and content they interact with on a publisher’s site. There is a disadvantage of a user deleting local storage and then seeing the same ad again and again, so there is limited ability for frequency capping.
Blockchain for advertising is a work in progress and we are all learning from each other, exchanging everything we know and collaborating to improve the tech so that it can be more useful for all of us.
Luke Mulks, Director, Business Development, Brave Software
The hype around blockchain in marketing began to fade at a time when we’re observing a global focus and movement toward privacy and technology that’s requiring marketers and advertisers to question how and where incentives and behavior have been aligned. Many challenges remain for marketers and advertisers that want to leverage the benefit of this new technology.
The advertising game has shifted toward privacy. Privacy regulation, the amount of personal data broadcast as a business requirement, and the right to be forgotten have brought new challenges to blockchain projects. Storing personal data on an immutable blockchain becomes fundamentally incompatible in regions where people have the right to be forgotten. Browsers are having to step up and put some guard rails in place, as marketing and advertising do not have much of an interest in working against their own bottom lines, which have been fueled by collecting as much data as possible from as many endpoints as possible. Regulatory uncertainty and compliance have also been an inhibiting factor to growth and innovation. It’s improving with time, as regulators become more educated, but is still new.
For players that are trying to put “old world” marketing onto new-world blockchain protocols, there doesn’t seem to be much hope or interest without more disruption to the status quo. As a newer player in the space with a focus on utilizing blockchain-based technology to build alternative models for business to monetize with privacy by default, Brave has been able to separate itself from the supply chain hype that most of the marketing and advertising industry was focused on. We’ve balanced a pragmatic approach to blockchain with a focus on mainstreaming privacy and blockchain-based rewards into the first global private ad platform.
Over the past three years, Brave has grown to over 11.7M monthly active users, introduced blockchain-based rewards and advertising in nearly 30 countries, with most countries being supported by Q2 2020. The results to date show promise that we’re creating a lasting alternative, as we’ve run over 821 campaigns with leading brands such as Intel, Amazon, and Pizza Hut. We’ve reported over 284M ad confirmations and have a 12% clickthrough-rate across our platform (compared to the 2% industry average). As blockchain technology matures, competition will increase, but the only winners will be the projects that keep their heads down and build on this technology in a way that can compete with convenience that the dominant competition has delivered to the mainstream.