Thoughts by The Atkins Group & ATD Partners.
In its simplest form, Blockchain is a public, open ledger stored across many parties. Once a record is confirmed, it can’t be erased or altered, and the record is simultaneously distributed to all parties.
Blockchain was created about 10 years ago as a way to manage cryptocurrencies i.e. bitcoin. It uses a series of records or “blocks” that are linked by encryption that’s placed across a distributed database stored on business and personal computers all over the globe.
The way it works is once a transaction is made, a message is then blasted to the network that reviews the legitimacy and then either approves or disapproves the transaction. Blockchain is also extremely secure in the sense that records cannot be altered without all other records being altered simultaneously, so the longer the chain runs, the more secure it becomes.
We’re already familiar with some principles of Blockchain. For example, Google Docs, which is a shared document among parties. Imagine a public excel document that’s shared by all parties involved in the transaction, once a record is implemented, it can’t be modified, allowing for all parties to approve the transaction in a fully transparent manner.
What makes this technology so impressive is that the blockchain itself can be programmable. Allowing it impact industries like digital media where many transactions occur in real time. This begs the question, "how can blockchain technology be applied to our industry?"
With the increased need of transparency and security in the digital world (e.g., Facebook's data breach), blockchain may have the answer to avoid future data breaches and to minimize advertising fraud. With digital media being one of the fastest growing industries in the world, blockchain technology could be seen as an important tool that delivers transparency across the many parties involved in real time transactions.
Currently, the level of transparency in the space is unreliable. Millions of digital transactions are carried out between publishers (and their tech stacks) and advertisers (and their tech stacks). We rely on 3rd party measurement tools to help us verify and protect against fraud.
Because the blockchain is a decentralized ledger that is transparent and auditable, it discourages the practices that can open the channels of fraud. Through blockchain technology, we could eliminate the need to rely on third parties to provide accurate, transparent reporting. As media planners, we do our best to ensure that the ads we place for our clients are not susceptible to fraud. Blockchain technology can be introduced to ensure accountability and transparency.
When we buy an impression in real time, the transaction will be documented in the blockchain which allow the ad to be verifiable at the impression level. Because the blockchain is programmable it allows the publisher and advertisers to maintain transparent record of impression ownership, how many times the ad was viewed as well as the nature of the sites and type of traffic the ad is getting. The possibilities could be endless in what we can be maintained in the public ledger. By implementing blockchain technology, it will reduce the rate of ad fraud, thus reassuring advertisers that their ad dollars are being spent in a valuable way.
We can already see some publishers, adtech, martech begin introducing and testing such technology. We are actively engaging with such providers to truly see how this technology can benefit our industry.
Blockchain is going to change everything. The quicker we come to grips with, embrace, and implement, the better off we will be. There still are A LOT of unknowns on how we’ll actually implement blockchain, but one thing that isn’t an unknown is the added layer of transparency that we will be able to give our clients. By using smart contracts (self-regulating agreements) and having the blockchain serve as a secured ledger that not only records each contract, but automatically triggers the next agreed upon transaction(s) to avoid any misunderstanding or fraudulent practices within the transactions.
It’s being reported that 42% of ad tech stakeholder's resources are going to technology that monitors and delivers media buys. Using smart contracts for transactions on a shared blockchain ledger will allow them to automate that pesky, redundant back office work and have those newly freed up funds put to use elsewhere.
One of the exciting marketplaces we’re currently looking at is NYIAX- which uses blockchain technology and was developed in partnership with Nasdaq. This technology focuses on providing long term inventory at guaranteed prices, allowing to extend real time buying to Future Inventory buying all within a trusted, transparent marketplace.
Blockchain is an exciting technology that is now impacting many different industries. We are excited of the possibilities within digital media. As new providers come online, it will be our effort to dissect each offering and truly identify those that provide value back to our clients.