The following is an excerpt from the new e-book, The CMO Primer For The Blockchain World: How This “Trust Machine” Impacts Branding, Customer Experience, Advertising and Much More by Jeremy Epstein, CEO of Never Stop Marketing.
It features forewords by the CMO of NASDAQ, Jeremy Skule and the CMO of Dun & Bradstreet, Rishi Dave. The e-book explores seven different marketing functions and how blockchains might impact them as well as highlighting a few emerging vendors in the blockchain marketing tech space.
To download the free e-book, please click here.
You can also hear Jeremy speak at the MarTech conference in Boston, October 2-4, where he’ll present a 45-minute, in-depth session on Blockchain and the CMO: The Next Era of Marketing.
EXCERPT: Advertising Becomes More Accountable
You know you are not getting enough value for your advertising dollar. For every $1 you invest in advertising, you only get $.44 of value. One Forrester analyst claims that publishers who remove middlemen can increase CPM from $1 to $5.
The Ad Maze report in the Wall St. Journal is only the most recent illustration of the number of middlemen (and resulting lack of transparency) between you and your intended audience. As if that is not bad enough, you also do not have enough visibility into how your advertising performs. To top it all off, bots inflicted $7.2 billion in fraud last year.
Awareness is critical and advertising is a necessary component to driving consideration. You also know that the current model does not optimize your effectiveness or your return on marketing investment. John Wanamaker’s quote still rings true:
Half the money I spend on advertising is wasted; the trouble is I don’t know which half.
Where Blockchain Technology Can Fit In
This next line will not help with the popularity of agencies, but that does not mean it is not accurate.
Any industry that is full of intermediaries, has a lot of value lost along the transaction path, and lacks transparency and trust is an industry that is ripe for blockchain-driven disruption.
It comes as no surprise that the first and most advanced wave of blockchain-based protocols and technologies are seeking to upend how digital advertising is purchased, delivered, measured, and valued.
Near-Term Impacts and Benefits
Expect to see initial traction from the first generation of solutions as early adopter CMOs and digital marketing leads begin to experiment in the next 12-18 months. You will hear of preliminary proof-of-concept implementations that reduce reporting time, improve reporting accuracy, reduce fraud, and reduce costs in the advertising supply chain. You may also see downward price pressure on traditional agencies responding to the competitive threat.
The field of contenders is starting to fill up. Expect to see more join as well. You will also see several different strategies. Some of the early entrants include:
- AdChain, built by MetaX, which offers a protocol for establishing trusted relationships for buying and selling advertising space via its own native token. The token will represent your right as a shareholder in the network. Together with the other shareholders, you will have an incentive to keep it clean from fraudulent or low-value publishers. In return, you will benefit by getting more ad value for your investment and verifiable campaign auditing through cryptographically secure impression tracking. In late June, AdChain raised $10 million in 6 hours in its initial coin offering.
- NYIAX (New York Interactive Advertising Exchange) claims the world’s first advertising contract exchange. They are using NASDAQ’s blockchain technology to combine a financial matching engine and trading concepts with advertising technology. The goal is a transparent marketplace for buying, selling, and re-trading of future premium advertising inventory as guaranteed contracts. They expect fees to lower as the number of intermediaries goes down to one.
- AdShares is a decentralized, peer-to-peer market for programmatic advertising. It gives advertisers and publishers ability to trade directly without the need for centralized ad exchanges.
- MadHive is a video advertising and data platform that allows brands and publishing partners to build audiences and target those audiences across multiple screens and platforms. MadHive’s back-end product uses blockchain technology to allow brands and publishers to leverage the inherent trust and verifiability of a decentralized, peer-to-peer sharing network. MadHive is a founding member of AdLedger, the advertising industry’s blockchain consortium.
As these solutions start to come to maturity, you will have greater trust that your advertising investments are being placed as you intended. Wanamaker’s quote may not go away entirely, though you may be able to reduce the percentage wasted slightly.
Long-Term Impacts and Benefits
In his book, The Attention Merchants, Tim Wu writes:
If we think of attention as a resource, or even a kind of currency, we must allow that it is always, necessarily, being “spent.” There is no saving it for later. The question is always, what shall I pay attention to?
As marketers, we sometimes take for granted that the attention of others comes without any cost to ourselves. Since others pay for attention, marketers have historically just done whatever they could to get it. Advertising has been based upon this paradigm since the first penny papers of New York and Belle Epoque posters of Paris.
In a blockchain-based world, this paradigm could change. Arguably, it is already changing as more than 600 million devices worldwide run some form of ad-blocking software. William Gibson writes:
The future is already here — it’s just not very evenly distributed.
In the future, though, if you want someone’s attention via advertising, you may end up having to pay the person for it directly. You certainly will not swipe a credit card every time someone sees your ad. However, you might pay them a small fraction of a cent. Micropayments for attention can only work at scale with a digitally native currency.
Brave offers the capability for site visitors to directly make micropayments to a publisher via cryptocurrency for their content. You may not be willing to pay $200 a year for a subscription to The Economist, but you will pay a fraction of a penny to read an article. At scale, some of the most popular sites will start moving away from advertising as we know it.
The next iteration will come in the form of something like the Basic Attention Token (BAT), a function built by the architect of the Brave browser. The token is the mechanism through which an advertiser pays for attention-based mental effort by an individual. With Brave and the BAT, you will pay end users for their attention, instead of the 73% of all ad dollars going to Facebook and Google.
Brave may be destined for failure and there are valid critiques from very smart people that are worthy of attention (even though you will not be paid for it just yet).
Still, it is radical and different and a possible hint at a world in which the CMO of the future is going to live.
Advertising will be the one of the first disciplines to be disrupted by blockchain technology. The good news is that you will have much greater trust in knowing that your advertising and outreach efforts are going exactly where you intended them to go. The bad news is that attention of others will come with a price tag.
Talk to some of the initial entrants to the blockchain-based advertising space. Even if they are not ready for prime time, they can help you understand the direction.
Download the Brave browser and play around with it.
And, most importantly, come hear Jeremy speak at the MarTech conference in Boston, October 2-4, where he’ll present a 45-minute, in-depth session on Blockchain and the CMO: The Next Era of Marketing.