Early on in my tenure reporting on the digital advertising space, I was fascinated by the concept of audience futures—enabling publishers to guarantee sales of audience segments that could be transacted programmatically. This seemed to be an evolution of both digital direct guaranteed sales and TV-buying, but unfortunately the market hasn’t been ready for it—namely, publishers cited forecasting challenges and advertisers bemoaned the inability to optimize to different audiences as campaigns went on.
Now I see that audiences futures weren’t really the end goal—advertising futures and options were, hence the acronym AFOX for Parsec Media’s recently launched blockchain division. AFOX Exchange is an entrant in the burgeoning smart contracts field, where advertisers and publishers can guarantee a variety of factors—from spend to impression counts to rates to quality standards and much more. In addition, to easing the reconciliation process via these contracts, AFOX offers future receivables financing for publishers and measurement and quality thresholds verified by Moat and other certified vendors.
I caught up with AFOX President John Humiston to understand why now is the moment for advertising futures, and why blockchain is essential to power smart contracts.
GAVIN DUNAWAY: How do you define advertising futures? What have been the big hurdles to making advertising futures a reality, and why do you believe now is their moment? What will spur adoption?
JOHN HUMISTON: “Advertising futures” are contracts that represent the obligation to advertise at some point in the future. As such, futures markets require trust in the quality and value of the media the contract represents, something digital has struggled with.
A trust gap appeared in digital when the metrics used to denominate digital media contracts were easily gamed through placement inflation and other shenanigans. The trust gap created major market inefficiencies as market participants attempted to protect themselves.
To resolve these inefficiencies, AFOX leverages Parsec’s expertise in attention metrics and enforces strict quality guidelines on contracts. Once the trust gap is resolved, we believe the financial benefits offered by securitized contracts will be the primary driver of growth on AFOX.
GD: What do you think is the biggest misconception out there about blockchain tech?
JH: That it should be used in any and all situations. Unless your goal is to create a digital asset and enable P2P transactions of the asset, you can often just use a centralized database managed by a party that everyone trusts.
That’s not to say that tokenization is the only benefit. Blockchains can provide a shared source of truth amongst a group of individuals whose interests are not consistently aligned. This is certainly applicable to much of the ad tech ecosystem.
AFOX uses a permissioned ledger to represent ownership of a contract on a network that is transparent and trustworthy to all of its participants. The tokenization of the contract allows digital ownership and P2P trading, while the immutability of the shared ledger prohibits bad actors from acting badly.
GD: Why is blockchain the optimal backbone for smart contract technology?
JH: The end goal of smart contracts is the certainty that a future event will occur, provided that something else happens. This certainty cannot exist if one participant of the contract has the ability to unilaterally alter it. In order to achieve true certainty, smart contracts need to be unchangeable, something blockchains are really good at.