From Hype to Reality: How Blockchain Is Already Bringing Transparency to Advertising

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Lately, there’s been a lot of talk making blockchain out to be a panacea for all of advertising’s woes — from issues with ad fraud to brand safety to viewability to better customer targeting to revolutionizing the supply chain. Unfortunately, much of that talk has been a lot more hype than reality.

At least that’s what I thought up until recently. After attending Advertising Week NY and Programmatic I/O, I learned about some real-world experiments gaining significant traction — yet also being met with heated criticisms.

End-to-end Payments


Juniper Research predicts that ad fraud will cost advertisers $19 billion this year. Much of the onus for dealing with ad fraud has been placed on advertisers, because, well they have access to the data. But visibility into fraud typically doesn’t come until after the fact and of course the chargeback or rebate processes are not simple.

So should it be the intermediary’s (e.g., exchange) responsibility to provide greater transparency into where traffic is coming from? Maybe. Or maybe it should be up to both sides.

Here’s a place where blockchain can help, according to Seth Berk, Head of Brands & Agencies at Amino Payments, and Rachel Mervis, Programmatic Lead at Nestlé. They’ve been working together to solve the transparency issue for Nestlé. Other brands adopting blockchain in an effort to reduce spending waste include Anheuser-Busch, AT&T, Kellogg and Bayer.

At Programmatic I/O, they presented “How to Use Blockchain To Keep Your Supply Side Clean,” where Berk talked about Amino’s solutions for brands, agencies, ad tech providers, and publishers—providing more control, increased reach and auditability for brands; transparency, auditability, and smart contracts for agencies; accurate payments for ad tech providers; and direct buys and faster payments for publishers.

This is something that could entirely disrupt the industry, but how readily will it be adopted? Especially the bit about faster payments — that would completely shake things up. Marketer payment cycles to agencies stretch from 60 to 120 days, while agency payments to vendors can be short as 30 days. The theory goes that because blockchain add so much transparency into the supply chain and simplifies reconciliation, payments will flow quicker and more freely.

With a solution like Amino Payments, the idea is that both sides would have a clearer picture into exactly who they are doing business with, as well as having a clearer picture of exactly what’s happening on both sides of the equation. Mervis is excited about the dashboard Amino has provided Nestlé and how it’s bringing them more transparency. Nestlé can now pay all ad vendors directly, and at the same time.

Also at Programmatic, Gartner VP and Analyst Andrew Frank,  also applauded the benefits of blockchain, citing use cases from decentralized data management platforms to combating fake news videos and taking back some control from what he called the walled gardens of Facebook, Google, Apple and Amazon.

Another thing about blockchain is that it potentially cuts out middlemen. In advertising, this could mean many things. For one, it could mean advertisers buying ads directly from publishers as they did in the old days.

Some critics feel these solutions aren’t just giving advertisers and publishers more control, but they could bypass the agencies and ad tech companies altogether. For Amino, at least, the idea is that the middlemen and the brands and publishers can all build more trustworthy relationships.

But if both sides aren’t adopting blockchain solutions, is the transparency 100% there? It takes for all sides to make an agreement in advance for blockchain to really work in the supply chain. And without credentialed parties verifying activity, such solutions could essentially have little to no value.

Direct-to-Consumer

Some other blockchain use cases focus on providing customers with more control and enabling them to dictate their relationships with brands. That’s something I learned when I moderated the panel “Ad Tech Disrupted: Accountability and Transparency with Blockchain” at Advertising Week.

On the panel, there were two solutions that promise to deliver better targeting to advertisers and more privacy and control for customers. One panelist was Luke Mulks, Director of Business Development for Brave, a web browser that uses the Basic Attention Token (BAT) to account for attention and focus on privacy, security and having a free open web. They also have an advertising platform that pays users for their attention and everything is opt-in. Another panelist was Jared Christopherson, co-founder of TAPNetwork.io, a decentralized advertising platform that rewards consumers for their purchase data and enables brands to interact with consumers in a 1-on-1 relationship.

Both solutions offer brands actual audience attention and not just an imprint., which means spending ad dollars on real customers. Ads become less intrusive and more effective in this scenario because the consumer has already told the advertiser what she wants. Talk about cutting out the middleman.

On the surface these solutions are promising, as they reduce human error given the immutable nature of data on the blockchain and that transactions are agreed upon in advance and stored as smart contracts.

Moving From Experimentation to Transformation

Still, it’s early days to even begin thinking about blockchain disrupting the advertising industry or the supply chain. The use cases are endless, but the practicality isn’t fully there yet.

“We need to find the balance between the idealistic view of blockchain solving the overall web and focus on individualistic point solutions coming out of proof of concept to something more tangible,” Richard Bush President, NYIAX and Co-Chair IAB Blockchain Working Group told me at Advertising Week. “We have proven concepts come through IAB, but we’re still trying to find the buyer and the seller to engage and take it beyond proof of concept into something more tangible,”

Still, there are concerns in the industry that right now blockchain processes too slow and auditing is a hard business. Transaction speeds just aren’t up to snuff yet to allow for real-time bidding. Right now the tech for digital advertising processes millions of transactions every second, while blockchain can take minutes and even hours for payments to settle—while costing more than current options. And methods for bringing the new tech together with the old are somewhat complex. “The blockchain space is still so young–doing as many transactions on chain that a lot of white papers are promising is really tricky right now. You have this compromise of where can I settle things on chain and the pragmmatic way that you can actually apply business logic to in the real world. It’s kind of a balancing act while you’re trying to innovate and work with these old models and new models at the same time,” explained Luke Mulks from Brave.

And while on one hand buying customer’s attention sounds like a good thing, there’s the possibility that consumers receiving rewards for their attention aren’t really going to convert. Also, for all of the privacy promised with supposedly “un-hackable” blockchain, it should be noted that companies leveraging blockchain can be hacked as some recent intrusions into cryptocurrencies have illustrated. The points at which blockchain is connected with other technologies seem to be particularly vulnerable.

Make no mistake—while this is a promising tech segment, it’s got a lot of maturing to do.

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